Get Nebula using my link for 40% off an annual subscription, just $30 for a year or 2.50/month: go.nebula.tv/moneymacro I try not to nit pick and stick to main points on YT. But, if you want me to nit pick and critique more graphs go here: nebula.tv/videos/moneymacro-economist-nit-picks-scott-galloways-antiboomer-ted-talk
you keep talking about how mortgage repayments are cheaper but have you considered the fact that the house price to income ratio (at least in Australia) went from 3.5 in 1980s to 6+ today. Nevermind mortgage repayments, mortgages are harder to obtain in the first place. Gen Z are locked out of the market. www.rba.gov.au/publications/bulletin/2012/dec/pdf/bu-1212-2.pdf
yes mortgage repayments are easier today but house price to income ratio (at least in Australia where I live) has went from 3.5 in the 80s to 6+ today. Nevermind the interest repayments, mortgages are harder to obtain in the first place. Gen Z are locked out of the market.
I appreciate whether or not you agree or disagree, that there can be a civil discussion and something can be learned from each other. TED is a condensed timeframe and a hard choice for what nuance there is time to approach versus an academic lecture. I saw the TED talk as a opening salvo to a more granular conversation and it is good to see that it hit the mark.
I discussed Prof. Galloway's TED talk and Joeri's work recently with my dad. As two non-US persons and Prof. Galloway's alumni who have been working closely in related fields, we came up with two thoughts: 1) if we sincerely believe in a definitive fail, we should short it. 2) if the moral guilt from shorting is insurmountable and unbearable, we should utilize financial tools to design insurance products - not for personal gain but to protect the younger generation as they are really failing. A few starting points seem readily available from the TED talk. However, we stuck at searching for further actions beyond the TED talk - not for Prof. Galloway personally, but for finance and related industry as a whole - since it can be profitable for personal gain (from a callous point of view), or being useful to alleviate others' sufferings immediately. Meanwhile, either is more efficient than sending out the message alone. But, neither is happening - are the riches don't want to get richer, or the social service know-hows are not interested in this line of work? This is where we got confused. (Mom cooking breakfast): I bet your Nobel prize is on the way. Go wash your hands.
Elder millinial here. You're right that this issue is complex. I grew up in a poor family with a single mother with three children in a rural town. I made more money than my mother ever did within 5 years of graduating college, as my mother never made more than 25k a year, and didn't have a college education. My mother, however, was able to buy a house in a government subsidized neighborhood. I, unfortunately, needed to move to a more expensive city in order to make a decent income, and cannot afford a house within an hour travel time of where I work. So, on one hand, I'm doing better than my mother ever did, but on the other hand, I have had a hard time accumulating assets and building any kind of wealth.
That's quite disappointing. Stay positive. I think you hit the truth, past govts over stimulated artificial growth for the sake of keeping the economy going through oil shocks and other economic upheavals. Now we are paying for it as many govts are over leveraged and society life expectancy has increased delaying the distribution of family wealth being passed down, where you're fortunate. In saying that the GI and silent generation and those before did it real tough. There wasn't any inflationary expectations for 98% of society.
I feel the same. In Europe, the generation of my parents got married and build their own rather large houses, all was settled at 25. Today, most of people under 35 can't afford to buy a house, and if they do they will be paying it forever. Same applies, I earn a lot more than my mom, but also need to live in a very expensive city.
Not quite down to 25%, but couple years ago I got a new job with 85% increase in pay and, yeah, makes a world of difference towards being able to afford stuff + build wealth vs scraping by.
now imagine yourself as an Asian, the biggest section of the world's population, where your house cost is 30x your annual income. I have to love how westerners complain about their first world problems.
@@xiphoid2011 So I should be grateful to be a westerner, because a house only costs 20x my annual income? Not really. It doesn't matter by which margin I can't afford a house. In the end I still won't have a house.
Just to clarify, this video does not show that prof. G's message is false, or that the opposite is true. It merely critique's prof. G's evidence. My goal with these videos is to encourage better researched videos on RUclips and to show people what goes wrong in some videos and how they can be improved.
Isn't it possible his Ted talk is for a general audience and not for economists? Aren't you holding his video to the standards of academia when it was never intended for that? Plus, you said yourself how hard it is to measure comparative economic situations between generations. Even professional economists would struggle to come up with hard evidence that young people are doing worse than their parents. That doesn't mean it's not happening.
14:29 - here you show that public and/or _non-profit_ colleges / unis prices went down. But this is 'Murica, where only Ivy League matters. It's a damn shame you didn't show _those_ numbers. (I'm European and I don't care about Galloway either way, but I see that _you_ picked your numbers as well)
15:48 - another, I'm afraid, cherry picking. You fail to mention that in 1988 average square meter of a house was _much less_ (in PPP) than currently. As in (history goes) "back then, my son, I could buy a 100 sqm house for 3-4 years of salary" - compared to current 10+ years. Maaaan, I watch you regularly, but this is a _very first time_ I logged in to leave two comments. Shame on you.
@@TheFireGiver Galloway heavily emphasizes his professor status in general and during the TED talk. He also heavily relies on graphs and calculations, implying sophisticated research. I hold him to the standard of an NYU prof doing a TED talk. You don't have to misinterpreted and cherry pick graphs for a general public presentation.
i understand the intention, but i don't think this level of scrutiny is really appropriate for a 20 minute presentation. citations aren't even expected in that format. and if you're gonna treat it like a paper, why not build a constructive case, based on studies, to show how much better young people are doing, instead of nit-picking the few references given. watching this video in isolation, you still have no clue what is factually the case.
You mentioned it yourself. It's very difficult to accurately measure how young people are doing without looking at individual cases. If I don't pay rent because I live at home at 30 that doesn't mean I'm better off than my dad who moved out of the house at 18. He had to pay rent while I saved money. The experience of my life is worse than his though. Good luck measuring that sort of thing. Repeat that same thing over and over for every aspect of life.
Yeah and complain, complain, complain rather than, 1) have gratitude 2) take responsibility, work hard and consistently, fail then get up and try again, 3) stop blaming others for your failure. Look at yourself in the mirror and say; I'll do better l can do better. Yeah.
@@Joe44944 And while your at it pull yourself up by your bootstraps! In all seriousness, the youth at today are facing unique challenges compared to other generations and it is reasonable for them to complain about these issues. As mentioned in the video for those youth who are on lower incomes face stagnation if not reduction in living standards. This is not something anyone should be silent on.
If you’re 30 and living at home, you should be well on your way to owning a house. I built my first home not too long ago. It only took me a year of working after moving back in with my parents for me to have enough for a home loan. You can easily save most of your money when you’re living with parents. I did it at 23-24, much younger than 30, working a job that severely underpaid me. The reality is, you’re complaining without actively doing what has to be done. Saving money.
I found your critique excellent until your last points. When you criticize Prof G's point about young people having less happiness and well-being, your counterexamples are "comparing apples with oranges." Better statistics on pollution, lead poisoning, and high school graduation are NOT as direct measures of "happiness" or psychological "well-being" as self-harm, depression, and overdose deaths are. Now Prof G is wrong to try to attribute these things to "generational wealth transfer", especially since as you point out his evidence for that is not very good., and for the most part his data showing declines in psychological well-being deal with even younger people than those in their early 20s that his supposed income and wealth statistics are about. The increase in self-harm and depression probably has completely different causes (one possibility being the way children and teenagers, especially girls, use modern social media), but they are certainly more indicative of "happiness" than pollution or high school graduation.
I said the exact same thing in a comment I just posted lol, I wrote a whole ass essay basically saying that I think it's a misnomer to attribute broad and general health advances to child specific statistics like increased suicide rates, obesity rates, depression rates, increased loneliness, etc. To form a conclusion that overall child wellbeing has improved, it assumes that material increases=betterment, It feels really disingenuous and sugar coating, I'm sure he didn't mean that but that's how it came off to me.
Overdose deaths have skyrocketed in North America, but not primarily due to a reduction in psychological well-being or increase in addiction (though this may be *part* of it). Overdose deaths have skyrocketed since the early 2010s mainly due to changes in the illicit drug supply, especially the rise of highly potent fentanyl, which is present in the drug supply in inconsistent and ever-changing and impossible-to-measure amounts. This combination of potency and inconsistency has caused the overdose rates to skyrocket since the early 2010s, even though we don't have evidence of much increase in addiction or Substance Use Disorder prevalence since the early 2010s. The rise of fentanyl is something that could only have happened under conditions of drug prohibition. If heroin had been legalized and regulated 15 years ago, this disaster would probably never have happened.
I think that's the point he was making. For every study you can find that you can interpret as 'X is definitely true!' there's another study that you can interpret as 'X is definitely false!'. Whatever argument you want to make, you can almost certainly find a number on a chart somewhere that will back it up for you. That's why a more nuanced approach is so important.
@@Betweoxwitegan one essay couple days ago talked about this... that since early 90s prevalent "self help" "you build your success" psychological self monitoring is big , huge thing now that wasnt pre 90s and that is directly linked to wellbeing and happiness. Why you dont have house and pet or wife/husband? Coz you didnt try hard etc. Almost nobody thought like that in gen X or boomer generation. Ontop of that, regardless of if people admit it or not, those parents who struggled 90s and forward to raise current youth, also had effect of that which is often reflected to kids by family wellbeing and stresslevels.
@@effexon Yeah, hyper individuality ignores all of the societal and systemic barriers minorities and people in general face, it creates a culture of shame and a rationale for the hyper privileged, it seeks to maintain dominant hierarchy without any radical change and seeks to perpetuate inequality and injustice as "that's how things are" and "lazy people don't deserve my money" etc
My grandmother was an NHS (UK hospitals) cleaner and bought a 3 bed house in London on her salary. She paid off the mortgage in 10 years. It's now worth £600,000 and she is technically a millionaire because she owns 2 homes. What NHS Nurse let alone Cleaner today could own a 3 bed house in London?
Exactly, this is what we're seeing in North America too, even if the evidence for it is not tracked in a statistically valid way. A measure of income isn't sufficient. The overall costs of goods and services need to be accounted for too: transportation; groceries; clothing and household goods; medicine; taxes (on income as well as on goods, services, and homes, and hotels, and alcohol, and carbon...); utility bills; material and labour costs for home and vehicle repairs; PERMITS!; insurance; interest on loans; etc.). In theory that's all accounted for under the general concept of 'inflation adjustments' in these economic studies, but I didn't see those details being explicitly addressed in this video. Boomers used to be able to comfortably pay for a house, bills, and 2-4 children on an average annual income, and still have money left over for vacations and a couple of cars. Someone making 25 units per hour or 50k gross units per year isn't going to be able to afford the same level of comfort that Boomers had 40 years ago. I think that was the point prof. G was trying to make in a sensational Ted Talk (yes Ted Talks are usually edited / directed to be 'History Channel' sensationalist messages in order to bedazzle viewers with short attention spans). p.s. Your poor grandmother probably has trouble affording the annual taxes and regular maintenance for her home now, because everyone looks at it and goes 'wow, she must be rich, I'm gunna get me a piece of that pie'.
I understand your sentiment. Although, sorry to break it to you, a house that you reside in, isn't counted in the calculation of whether you're a millionaire or not. That status is a reflection of your investment wealth that is convertible into a liquid amount within a month. Wealthy people like millionaires dont live without a house. Hence why it's excluded.
@@mark-ish It counts. It serves as the collateral. Try and call an asset manager and they will happily tell you how you can use it as a finance and re-finance tool to leverage 2x out of it (conservatively speaking).
You keep on mentioning an increase in educational attainment as an increase in cohort QoL, but that's only relevant in as much as an increase in relative education levels within a cohort leads to better economic outcomes. Attaching a QoL increase to education itself is meaningless, one could easily argue it's a byproduct of higher requirements for navigating increasingly skill-segregated job markets.
Boomer here. All these studies seem to always ignore Scale of Capital. As others in the comments have pointed out, high interest on a small mortgage is way less than low interest on a large mortgage. Combine this with the fact a house is now around 10 times the average wage as apposed to 3 or 4 times 40 years ago it is not hard to see why younger generations are seeing it as a tough gig. Sure they're probably earning more but you need two people at work to cover the costs which was not my young experience.
Many are also working more than one job and maximum 40 hours a week to get those higher earnings. This is essentially a requirement since they had to do more school to qualify for higher earnings and are riddled with insane student debt.
The way I’ve gotten genuinely-curious people to realize that younger generations really are worse off is to ask them to convert everything into hours worked. For minimum wage and for medium income, calculate the number of hours of work needed in early 1980s to buy an education or a house or health care. Compare to the number of hours of work needed today in order to be able to buy an education, a house, or health care. Boomers got to work less.
The fact that the younger generation has to stay in school longer is already an issue. While Prof G's evidence might not be ironclad, the statistical direction of his observations is not really all that controversial.
The fact that younger generations can afford to stay in school for longer and then continue to live better lifes than any generation in human history is an issue to you?
@@Sundara229 True, but note: "can afford to stay in school for longer" is quite often because they "need to". Things are changing now, but for most Millennials there were not enough white collar jobs for non-graduates. And, to become competitive in the marketplace, a graduation wasn't even enough, you went for a Master's. Which means, starting to work later and later
@@paulbukowiecki1213 there are horror stories about underemployed grads not making their debt payments but mostly people are being able to pay their debts and in the long run they've been better off for it.
well, my grandfather had a lower class income, raised 2 kids and my gramma didn't work, but earned cash here and there with crafts, etc. They paid off their house in 10 years. No way to even think of doing that now where my daughter lives. The differences seem obvious but my life is not a scientific study!
Its a bit sad that we still dont add "measured by xyz" or "defined as xyz" after every statement. "wealth", defined how? "inflation", measured how? "worse off", measured how? "economists recomend", economists defined how... which economists? People just state things as if the definitions and measurement techniques are too annoying to say after every statement. Yet the statement is meaningless without them. Most people dont even understand what an inflation % even means, or any of these other things. We just run around pretending like we are saying something even though we arent adding definitions or measurement technique after every statement.
That doesn’t mean all he is saying is BS, he might be talking in the podcasts like he is talking to a pal who is looking for some advise, and not to a board of directors, if you wanna know more what he is talking about the responsibility falls on you, not him
@@TheHealthConscounist You miss the point. Stating anything, even to pals, is useless if you don't explain what you're saying. What's the point in talking if you're not communicating anything. It's like speaking in a language that nobody understands.
I am torn between bashing you and giving you support, what should I do? So, you really messed up, because inflation, income, wealth, have clear and precise meaning in Economics, did you know? As for the rest you are right, there are no such a thing as "Economist" or worse or better off, how better? Who knows?
I thought it was interesting that they chose percentage of all wealth without including any information about absolute wealth adjusted for inflation. I'd pretty much expect anyone heavily invested in the market (housing and stock) for the past 10 years to have a larger share given the very long bull market. Older workers have bigger portfolios and higher investment rates, as younger workers spend a larger portion of their income on consumption.
Thanks for the video! You mentioned that the younger generation is more educated on average, and the financial benfit of the higher education will more than offset the increased cost of living. But you haven't really shared evidence for this (please correct me if I'm wrong). I can't help but think the inverse is true. Older generation could afford housing, education, and provide for their family all with "low-skilled" job wages, all while people with PhD degree nowagays struggling to make ends meet, let alone buy a house (depends hugely on geography as well as the sector). I have no evidence for this, only anecdotal. But this is the experience I have to share, as well as the experience of people around me (I have a MSc degree from Oxford and I am still struggling to survive, let alone buy a property). I know plenty of old people in their 60s and 70s with only a highschool degree, getting into banking and they comfortably own multiple houses now. Edit: I would like to point out that I'm based in the UK, so things might be slightly different here than in the US, but I still do believe the overall point stands.
IMO bachelors are usually worth it, especially if you don't want to work a dirty but well paid job. Masters and PhD are not always worth it however. Really depends on the field much moreso than bachelors.
@@szurketaltos2693do you think the Bachelors is worth it? Or is it more attaining the level of competency in literacy, numeracy & other soft skills required to get a place in a Bachelor program themselves are good predictors of lifetime earnings? People who went directly to trades are earning very well earlier in their careers, but without aptitudes in soft skills that could enhance their craft & business acumen, their income will plateau earlier & their working lives will be shorter as the physical work takes its toll on their body & they are unable to transition into less manual work. (Not EVERYONE can be, or should be, a business owner)
I work at a research institute in the UK. Someone with a PhD in infectious diseases medicine makes £47k. A cleaner here makes £26k. Literal nuclear engineers on £50k and rocket scientists on £45k. You can see this incredible distortion in nearly every industry in the UK; it doesn't make sense to spend tens of thousands of pounds and years of missed work struggling towards a higher post when the higher post just gives you a few extra thousand £ per year. All of my friends who went into education beyond bachelors are poorer off as a result unless they already came from a wealthy background and so were able to study without taking on debt or worrying about living in expensive areas (and areas where research work or hospitals are... Are usually expensive city areas).
@@noaccount4 yes, meanwhile software and finance earn vastly more than their worth to society merits. But they are fields with high profit margins. That said, it also depends where you work. A research institute will usually not pay as much as a company like, say, Astra Zeneca for that infectious diseases expert or Thales for that rocket scientist.
This becomes a bit confused with the variables as well. The expensive house needs a bigger deposit which takes longer to save for, and because of that there is less time to extend the repayment over. You can throw in side arguments about having to live with parents to save for the mortgage as rent costs make it impossible to save quickly, which lowers life quality potentially, but it also means starting a family is done later. If a late starting family happens, then if the children are forced to again with their parents longer... the cycle continues. I'm not convinced of the wealth equality is even, at least in UK.
Exactly. I would much rather buy a $20,000 house with a 20% interest rate than a $500,000 house with a 1% interest rate. Anyone with a at least one functioning brain cell would.
Younger generations beeing better educated doesn't do much other than raising the bar and cost of education for everyone. You now simply need a higher education to get the same income you would before.
The answer is clear and mentioned many times in the video. Yes, young are doing better on average but no one is average anymore because of how messed up inequality has become.
There is a joke that goes, "My grandson is 5, I'm 55, so our average age is 30. In the end, neither of us does naughty things (wink-wink)." This illustrates why relying solely on averages can be misleading. When we look at income statistics, the average can paint a skewed picture. Top earners pulling in significantly more money can inflate the average, masking the fact that many others are struggling financially. It's crucial to consider the distribution of wealth to get a clearer and more accurate understanding of economic well-being.
All the video proves is how impossible it is to precisely measure these things between different groups of people. The past generation could have paid for education, rent, and their mortgage on their own singular income. While today younger people may be wealthier on average, but you don't see in that data that their parents paid their entire education, help pay for their rent and groceries, and helped out with a downpayment. Given the above the only real way to assess this type of information is to individually go to 55 year olds, then 25 year olds, ask about their life story to the age of 25 and the opportunities given to them. Then feel out all the trends from that.
@@swaggeryyeah, when I was in college I could pay rent & living expenses for a year working just 3 months a year. That was in Seattle in the University District. That’s absolutely impossible now. Kids these days are completely screwed.
On the surface you are right. The study is biased. You prove that correctly. But in any way you "academically" prove that he is wrong. One point is - as you said "young people are joining workforce later". It's not because they are lazy or don't want to have some cash. It's because to earn a little bit better than average person from older generation they must invest much, much more effort into it. And now how high prices + high college tuition accumulate at time when you can't earn and need to pay them... therefore you are in very hard situation: or you have rich parents which pay for it (and then control your life) or you have to take huge amount of debt which will need to be paid back with dividends. Not mentioning that in today world you can't live with lot of stuff that older generations didn't need to buy/pay for, like computers/mobiles, internet.
I think this video is trying to prove a point that I don't agree with, namely it is missing that the boomers were able to take advantage of the low interest rate of the last decade much better than the younger generations. They already owned a house that those younger could never afford and by leveraging that many could take big loans to buy a second, third or fortieth home and corner the housing market even further. I also earn more than my parents, but I have come to the realization that not only will I never be able to live in a house as big as the one I grew up in, when we inherit mom's house, I will have to sell my half to some rich boomer who cornered the housing market, cause I can't afford to buy my sister's half.
You can measure “doing better” by a few metrics. 1. Earnings relative to cost of living. 2. Independence, ability to have kids and live on your own. 3. Happiness with career 4. Physical and mental Health 5. Financial mobility 6. Rate of poverty and homelessness 7. Suffering from all sources
Part of the reason that most of Europe outperforms the US in related metrics (such how big a predictor of one’s income is the income of their father) is the cheaper education in many countries
I wish earnings relative to cost of living were addressed more. Convert stuff into hours of work needed in order to purchase an education or a house or health care. Makes it clear how good older generations had it
The UK is the country where things have really tilted against the young. It has similar long-term trends to the Americans, but the added bonus of 14 years of governments voted in by and for the elderly. Since 2010, household income for working-age households has fallen, while household income for pensioners has risen - pensions are structurally guaranteed in the UK to exceed wage growth and inflation and are not means-tested, while benefits for the working-age disabled have been slashed and the most significant benefits are now means-tested. Taxes and education costs are massively up from 2010, the right for Brits to work anywhere in the EU is stripped as well, the consequences of the elderly-backed brexit fall on the young who voted against. Add the rising house prices and the costs of rent and mortgages, and that's another large transfer away from the young and towards the old. But that's from 14 years of government policy, not a long historical trend. Think it's an interesting case study in terms of trust in the system too though, people sometimes talk about increasing anti-democratic views in young Brits... Until the election this year, the young were on the losing side of every national vote in the 13 years from at least 2011, and paid the price.
Idk I get that the charts can show different things, but the housing market alone is a huge slap in the face. A lot more of us live in precariously unmaintained rentals and our retirement is being drained into a landlord’s pocket
thats entirely the fault of you and you neighbors who have consistently voted against making it easier to build housing in local elections across the country. The lack of supply is essentially the single reason why housing is so expensive
It's called "lying with statistics". These professors are all out of touch and hide in their offices surrounded by data trying to tell people on the ground "it's not that bad"
@@jorgeavelar98 Which politicians have promised to build more housing, as their primary campaign issue? Specifically to do that, not merely belonging to the party that you think is more likely to increase housing.
@ArawnOfAnnwn none. They know ppl are actively voting against local politicians that in favor of more housing. Ordinary ppl don't want more housing to be built so the "character" of their neighborhood doesn't change without realizing that that is causing the housing crisis
Median vs. mean. Can radically shift the narrative here. Also how was it indexed? In the price of housing, child rearing, education and price of food? I mean, you don't really talk about any distribution or cohort here. Just the entire generation as a whole.
Yes, he gives a brief mention to increased income inequality, but not how that affects this analysis. Basically, like you said medians are far more meaningful here than means. There is a fortunate 20% who have big Banks of Mom and Dad letting them go to expensive schools and graduate debt free and with time to do unpaid internships. Then BMD pays for their wedding and gives them six figures (see this month's The Globe & Mail article on this) for home down payment. This 20% is far wealthier than generations before them. Meanwhile, kids without this personal bank have far less purchasing power, regardless of incomes being higher, because housing costs and school costs, which they pay far into adulthood because of student loans, went higher than the rate of inflation. He also neglects to mention the 50% of people who start college and drop out. They are "more educated" than previous generations, but without the income boost but definitely with debt. (A large chunk of people getting debt forgiveness never finished school, and are not high income as detractors falsely describe them.)
That's a very weird criticism considering the context. He's explaining how someone else's content is full of rhetoric. Joeri is not even trying to argue one way or another, don't you see that?
@@DivinesLegacy Millennials ended up in a very good situation, especially the mid-older millennials. They've done nothing but complain for like 10 years but are in a much better position than just about any generation before them.
Granma was a single parent of three, worked as a farmer since 5 years old, then as a cleaner. By 45 had bought 2 apartments and payed 5 years of university tuition to my uncle. I have 5 university degrees, deliver lectures at the world top 1% universities and wont be able to achieve the same by 45. We have the same lifestyle, never eating out and one holiday per year (at parents home) I appreciate your efforts in presenting a valid view, nonetheless my heart stays with Professor G. I understand I am biased tough.
I earn more than both my parents but I still can't afford a home anywhere in Canada or USA. I'm not an outlier as the vast majority of the people I know are in the same boat. We may make more money but it sure as hell is worth a lot less than it used to.
Thank you so much, M&M, for doing this critique. I have been watching his podcast for a few weeks, and something in the tone and the quality was bothering me. You have nailed it with this video 😊
Having watched Prof G's Ted Talk, one comparison missing would be a graph which takes into account the normalization of population size between the different cohorts. Additionally, a global comparison of total population size would have been helpful as either supporting or counter evidence.
It would be good to seem an absolute wealth comparison and not just a relative wealth comparison. The past ten years have been very good to people with assets (businesses, 401ks and houses). Old people have more assets. High growth would yield a disproportionate gain for the most heavily invested cohort. Is it really just a "other people doing better" story? Can't tell.
I earn well (top10%). Much better than my parents did, adjusted for inflation. I'm 42 yo. I'm almost bankrupt, over half my wages go towards rent, the other child support and groceries. I have no way of ever owning realestate for the rest of my life. My parents bought prime realestate in Iceland and Canada on teacher's salaries. Yes prof G is correct!
Imagine being divorced and having to pay child support and thinking that that changes the average statistics. If you made bad decisions in life that’s on you
Yeah, I'm not necessarily in agreement with Scott G's claims but he is absolutely right on the issues of mental health and happiness in the younger generation. There is a trend to social isolation, anxiety is very high, young people have fewer friends (there is a loneliness epidemic), the drop in marriage and relationships (according to latest census the fastest growing cohort is single older unmarried people. The congressional hearings on social media with the former Facebook exec, Frances Haugen and even the US Surgeon General. I would say that while Scott G may pick supportive data to back his points, I don't think you counter this argument particularly well - I mean so what if less kids have asthma (that's not really mental health). Just look at all the youtube videos of kids posting they are 18 or 20 and have zero friends. Look at the "Hikkikomori" the antisocial people in Japan who never leave their homes. Its not just Japan those folks are everywhere.
The wealth transfer has a lot to do with the policies that continue to fund elder care over education and child care. We are paying to take care of them while their parents also paid to take care of them (Tax rates were higher leading to government subsidized education, infrastructure jobs, and cheap quality housing) Being more educated hasn't yielded the necessary increases in quality of life. Companies aren't even hiring entry-level candidates.
Key criticism: 30% of all middle class are graduating university. The other 1/3 were trades and self employed. But anyone at any job could buy and car in a month or a house in 5 years. Now the proof that is inaccurate is national debt, corporate debt, personal debt, and the absence of wealth due to the aforementioned. The obvious data are the real data of wealth and demographics. Inflation and equities múltiples are astronomically higher than real values 40+ years ago. It's common knowledge that there's been a "disproportionate" wealth transfer. You're choosing to misinterpret his opinion - again, not his study, his opinion. Most of your content is a lot more thoughtful than this.
Galloway is a marketing expert of course he knows how to craft an attractive narrative for his audience (mostly millennials) so they buy his self help book and listen to his podcasts
Scott Galloway only has an MBA. He doesn't have a PhD, nor has he published original research in any peer-reviewed journals. He's not a scholar in any real sense.
Adjusted for inflation house prices have doubled between 1995 and 2005. There is a wealth extraction process going between boomers and younger generations through the housing market. It's so bad, that governments don't even include house prices when they calculate inflation, which is a stellar way of cooking the books. Sources to the claim are available upon request(RUclips won't let me post them).
yes but the reason was the low interest rates and all the speculation leading to 2008 crisis, not the housing per se. Without that crisis, home ownership would be much more widely spread in younger generations.That wealth extraction process you speak of is mostly due to unregulated markets and the criminal and mostly unpunished banking manipulations it pushed forward... all unrelated to inflation.
The question of whether or not people are earning as much as their parents at a particular age is probably the wrong question. We should expect them to be earning substantially more because the economy is substantially larger now. The profits have gone to a very small number of people, largely. The question of why may be pertinent to the question of how valid the grievances are. And that's the other thing, whether or not people are richer than their parents is besides the point in general, the question is to what extent older generations made choices that are bad for younger generations in order to enrich themselves and get what they want.
So you fully focused on if u have a valid grievance with the previous generations 😂 I'm sure you'll find one. And I'm sure you will have many excuses why other people are are fault for all kinds of things in your life.
@@SkyGlitchGalaxy That is indeed what I'm focused on when the subject is a video called "How the US Is Destroying Young People’s Future". What are you focused on here? Why do you want to change the subject?
The "missing" part of productivity increase goes to purchasing capital. It doesn't go into the pockets of the wealthy. Also, much of the increase in productivity isn't even PER PERSON increase, and the more unproductive people, the more per person rates are blunted.
Older generations definitely made decisions that are bad for their posterity. Preview: When your generation is the older generation, you will have made decisions that are bad for your posterity. If you are very wise you will have made different mistakes, maybe even new ones! If you are lucky, you'll have built the internet, CRISPR, golden rice or cut the cost to orbit by 90%. I'm seriously rooting for you guys to do just that. Tactical Recommendation: Don't go after the Boomers. Wait until they die off and then, when the Millennials are the largest generation, you'll be able to start "getting yours" back from the comparatively small X'er voting block. Stick it to the old people hard then. This will not make you happier, or better off, and will maximize misery, but you'll have better luck with this target selection. Of course, the X'ers kinda see this one comming, so... Practical Recommendation: No one does these things on purpose. They make decisions they think will be the best for themselves and their loved ones. Focus on the closest circle of concern that you most immediately need to change and find a way to produce something that keeps the wheels rolling. If you happen to have the talents needed to cure Alzheimer's, develop better batteries/conductors, or do that mushroom plastics thing...get on that. Be warned, that plan you put in place to solve student loans, or the super fungi fields to eliminate plastics...it's going to explode and the generation that comes after will be having this same conversation about how you ruined everything.
Just for an anecdotal data point, one of my first after HS school jobs which turned into semi-skilled (electronics) paid $2.1 which the inflation calc says is $11.60 now, that was coal mine industry.
The cost of education in your chart ends at the pandemic, when there was a crash in attendance. There's a rising trend of unemployment. It's also really useful to look at medians, since the rise in inequality also applies to younger generations.
Before watching the video, I will say that I am 22 and yes I feel that we are generally worse off than our parents are. Most of the other people around my age that I talk to also seem to share this sentiment.
In that case, my preview is that nothing in this video goes against that gut feeling. Research that I highlight shows people live with their parents longer each generation. There is some hopeful evidence though that stuff gets better a bit later in life (at least for most Millenials that seems to have been the case so far).
A friend here in town lives in a 4 room apartment for 200 euros. They have the price locked in from years 8 ago. A single room apartment today hardly goes by less than 400 here, in walking distance from his apartment.
Feeling, and reality are not the same thing though. I get why you 'feel' that way, but objectively you've got it better in all but a few ways. Mental health and social skills are lacking, but you have more material wealth, stability, safety nets, lower crime, etc. You earn the same but do not have to start at the bottom, and even have the luxury of refusing the "crappy jobs" that previous generations all had to start with. If you are unemployed it is a choice because there are plenty of jobs available, it's your ego that won't let you flip burgers, or clean stuff, until you find better. You posses more material wealth than any generation before you. Your electronics are cheap and plentiful. A TV used to be a family possession that had to last for decades. Now you feel embarrassed if your phone is more than a couple years old. What you lack most is perspective. You are the most privileged and wealthiest generation that has ever existed. You face higher housing costs, and a severe lack of family support, but otherwise have all the advantage.
Thank you for for providing a more critical look at professor Galloway's famous talk track. I, myself, had seen it and was captivated by his passion. Though as you point out it isn't 100% accurate, I think it is partly valid because it is the way that people feel. Perception is reality for most people
Excellent video. As someone in the scientific field, I really appreciate you bringing much needed facts to the all-so-biased and politicized news. I just want to add that, yes US generational improvement has slowed, but that's to be expected as economies mature. A key fact to remember that rapid increase in living standards before 1970s were due to the built upon a crushing decrease in living standard during The Great Depression. Economic cycles are real and necessary for an economy to stay healthy.
While the average and median wealth does not appear to go down with each generation, it does sound like there is a big increase in inequality with each generation. Why?
Expectation inflation. In the 1960s there were no microwaves, personal computers, smart phones etc. A vacation was to a national park or nearby beach. Shoe repair shops were common. Everyone was "poor" by today's standards. As expectations go up, so does the sense of injustice
Because more freedom does not make more equality of outcome. And there was far more equality pre-industrial revolution. Bit I'd take may life over anyone living pre-industrial revolution.
I mean, isn't the answer obvious? Because of policy decisions that increased inequality. Weakening of unions, tax cuts for the wealthy and service cuts for the poor, etc.
Women working is a big part of it. Having 2 income households where both are high earners is largely responsible for the differences in income equality.
Low interest rate with high house cost is a VERY BAD TREND - it actually makes houses less affordable as you have to have a larger bulk sum to get into the market and shows that more houses aren't being built
The reason he didn't look at prices in 2010 is because no current young people bought houses in 2010. Yes, if you look at the 40-50 yo gen X "it's not that bad".
Again, that's only looking at one factor. People who were young in 2010 did not feel lucky, let me assure you. It was a horrible time to be a young person . Sure if you had a good job you could get a house like my brother did, but lots of people simply didn't have jobs in that period. Meanwhile both gen z and millenials bought a ton of houses in 2019-2020. The affordability of houses comes and goes and overall ownership is slightly down from prior generations but its a marginal shift, not some epochal thing.
As a millennial, the reason none of us bought homes in 2010 is most of us were desperate for work and had only just gotten ourselves started on a stalled career path post GFC, were running our savings (if any) down, and lenders were incredibly cautious about who they lent to so despite nominal payments being low, deposit requirements were high, and many of us were in no position to capitalize on the temporary drop in house prices.
but as he has show by graph, housing affordability today is still better than the 80s (when boomers were buying houses) and still better than 2006 (when gen-X'ers) were buying house. The only one who got lucky were the millennials who bought houses dirt cheap and at 3% interest during the 2010s. Even then, today's gen Z's are still better off than Boomers and Gen-X. Further, US housing is dirt cheap compared to most countries in the world. I'm an asian immigrant, houses in Asian is 30X median income. US housing to income ratio one of the lowest in the world.
@@xiphoid2011 most millennials weren't buying homes in 2010, they had only just started their careers, what savings do you think they were paying their deposits with? What lenders were offering highly leveraged mortgages post-crash to people with no credit history? There was a huge housing price crash in the early 90's and interest rates dropped as well. Boomers & Gen X were in a much better position to capitalise on this at the time (as well as 2010) because on aggregate they had equity and assets to leverage to take advantage of these conditions.
The problem with earning study is that they are inflation adjusted when the official inflation rates haven’t been changed and always changing. Especially nowadays they just constantly swap out items in the previous inflation basket with other items or brand of “equivalent” item if the inflation of original item is too high, which makes official inflation rate way lower than what’s happening in real life. So using official inflation adjustment to study earnings will always be skewed
Education equalling better pay results is false for gen Z - employers expect bachelor degrees now so even the low paied basic jobs require that education
I was born in 1979 and since I was 19 I made more than my parents during the same years. Even taking out my stock options in DSCM and AMZN I still made 30K more than them from 2000 and beyond. I don't have a degree, but my mother does. I do have a couple certifications.
I recall starting to watch Scott Galloway's Ted talk but stopped at the moment he brought this the graph you started with where he compared the the growth of wealth of the 70 plus demographic versus 25 and under demographic. If you look at 2020 and 1990 census, you'll find that 70+ have increased by 40%. Compounded by the fact that those 70+ in 1990 grew up during the depression and probably got drafted in ww2 which impacted their earning powers. It easily explains the 50% growth in wealth share of 70+ in 1990 vs 2020. At that point, i knew Scott Galloway was full of it and didn't bother watching the rest
I’m doing very well financially. I’ve made more in the last 3 years than my mom did in 15+ years of hard work. In fact I was able to help her pay off her mortgage 10 years early with little to no change to my lifestyle. However, although a lot of hard work went into my success both from myself and my mother, there was a lot of luck and a dash of affirmative action that made that happen. While the system works for me I’m not blind to the fact that I am a very unique exception to the rule. Overall the system is much worse for everyone, and that to me is the rub. I’m in a place of privilege and will use that to demand as much material change as possible for those that didn’t make it despite their hard work.
I just want to point this out too though. The average American makes 37k a year. This includes people with degrees. I hear people in the medical field complain all the time that I make more than them as a Journeyman Plumber than they do after 50-60k in college debt. I also have 60k in college debt lol but that's another story. I also make 80-100k a year as a plumber..... The average car costs 10k a year to maintain and operate. That is about 1/3 of the average Americans income just to have a car in a country with pretty much non existent public transportation. The Average American CAN NOT actually afford to own a car to get to work and still save for retirement. Let alone do that and afford health insurance.....and afford to pay off that massive student debt, AND afford to own a home at an average cost of $400k a house. Then look at the cost, 10k, just to pop out a baby in a hospital. This country is drunk off greed and its killing us.
The info about average american can't afford care is false. I'm born in the very end of the 70s, so I'm gen X. The most popular cars's price (Toyota Corolla/Camry, Honda Civic/Accord) between when I graduate from undergrad (2000) and now, only went up 60% while the median wages have increased 80%. Cars today is more affordable than 20 years ago. What's driving the increase in "car" cost is that people are increasingly driving way more expensive and unnecessary SUVs. The American spending habit was bad in the 1990s, now it's even worse. Americans really need to learn from us Asian Americans on personal finance and savings.
@abarbar06 The average car in the US costs 48k. Let's say you buy it and it's good for 10 years, that makes almost 5k per year. Insurance, fuel, repairs, that's probably close to that figure if you drive a lot. Voilà, 10k per year. Not if you buy a cheaper, used car and drive less, but we're talking averages, right?
Additional context here: * "Prof G" is a professor of Marketing at NYU's Stern School of Business. He's very highly regarded in his specialty, which he shows here; but that specialty is not macroeconomic research. * College admission rates are different from 40 years ago because of the Common Application, which made applying to colleges far more convenient (and I think cheaper too). When my classmates and I were applying to college back in the early 2000's, we had to manually fill out separate application forms for each school I applied to, and most people applied to 5-8 schools max. Nowadays, rising seniors are applying to 15-20 schools apiece, so colleges are receiving a lot more applications from which they're admitting roughly the same number of students as they did before (or more, as you indicated).
I came of age in 2008, it was really bad back then. Would still be behind my parents if my job wasn’t at the leading edge of the cyber security community. Given the fact my father is an immigrant from Iran, he was very poor. My mother is also from a poor town in the Cherokee Nation. Wouldn’t have had the opportunities I had without being a pesky script kiddie causing all sorts of trouble as a teen. My heart goes out to other millennials and Gen Z because the struggle is real for most young Americans, and most of the boomer class just doesn’t care.
Very nice vid. I read a lit of Scott's pieces, it is very good that he points out these( and other) issues, also suggests solutions, yet being challanged makes it much more interesting and allows quicker better grow :))) al the best :)))
Unfortunately, you're still making the mistake of focusing on interest rates when discussing house prices. The context matters. The falling interest rates you cite, particularly during the Great Recession and its recovery, reflected lower real and nominal GDP growth. Economic growth expectation changes cause interest rate changes, not the reverse.
Everyone constantly jerking off over the current state of "The Interest Rate" drives me bonkers. Low and high interest rates aren't good and bad, they're totally context dependent like you said. But I've never heard anyone talk about it as if it's not a security going up and down.
I think what you may be missing out on is that he was a marketing professor and not an economics professor. As far as marketing goes he’s doing incredible, and choosing statistics to best market his ideas (and book) and not necessarily to give the moderate economists view. I think this is alright as the core message is a good thing and I think largely correct. Just like you’ve discussed the increasing difficulty for Americans to move into middle class, I think his focus is on working low to middle income young people which do have a much harder time - and not the entire generation overall despite being presented that way. This makes sense as with increasing wealth inequality if a young person is wealthy and their grandparents were wealthy, the wealthy young person is probably doing significantly better than their wealthy grandparent at the same age. Just my thoughts
The last part of the argument -- supposedly based on "scientific" evidence, which of course is as selective as Galloway's arguments -- is especially weak.
17:18 home affordability in the 1980's wasnt nearly as bad when you compare the housing spend vs income. the reason a 2019 vs 2023 mortgage payment comparison is valid is because wages were comparable.
@moneymacro while it is great that you are demonstrating weaknesses in Prof Gs analysis. I think your arguments were weak, when you tried to state the oposite. I’ve live in at least 3 states and many others temporarily and i’ve observed property prices skyrocket. Interest rates low or high do not really make a difference when a house that used to be $200k in 2006 is now above a million, and this same trend persists in most developed states.
It is no consolation that you earn less because you spend more time in school - a school that you also pay for by going into massive debt. Also, in many countries it seems nowadays that as you age your earnings tend to flatten. It is as if 'experience' is no longer a value for the private sector. This is really worrying because all these narrative that we are not worse off are based on the assumption that as we age we will earn better. I don't think it will hold water in practice, though.
I get youre playing devils advocate, but some of your critisisms sound more like apologetics. Like the 45 to 55 paying more in taxes. Like, as an absolute value? Or as a percentage? It sounds like a disingenuous taking point millionaires like to use. "I paid 100,000 in taxes this year" though it was just 10% of their capital gains. Profits you only get if you own assets. Also 45-55 aren't boomers. Its gen X early millenials. "Look how great you have it, so many kids get to go to college now" Because if you don't take on this debt you can't default on, you won't be able to support yourself. Boomers weren't needing to compete with the world, so the need for going into debt to go to college for 4 years wasn't required to make enough money to start a family. Youre critical of the other guy for bias, but youre also not engaging in good faith. God, everything about your arguements are just skewed. You pulled up the chart of mortage/house prices, then said "look. It's a wiggly chart. You can see the mortage/house price dipps after 2009. YES. After a MARKET FAILURE that cause the foreclosure and bankrupcty of family homes. This isn't proving what you think it is. Under normal conditions, bevause people use housing as investment vehicles now, houses even with interest rates included are more expensive in relation to median income. You can just look at homeownership rates to confirm this. Long story short. Capital is more valuable than labour. Its taxed better than labour, it can yield gains with no effort. The generation with more capital is the one that's better off. That's the boomers.
Additionally, the long term expected returns of investment markets have been depressed through valuation expansion during a multi decades long interest rate decline. Low interest rates signal low productive capacity for capital earned and invested today. So the savings and growth potential of young workers today is not even close to what it was during the 1980s. Not saying it's anybody's fault or claiming victimhood, but working to earn capital in today's low interest rate environment where stock and real estate markets' valuations are expanded to record highs means that there just isn't that same growth potential. The value of time is potentially far less valuable today compared to 1980s. Real interest rates have been zero or negative for over a decade until just recently.
@@aaron159r2 Good, bad, or just bad luck - I'm not here to say. It's weird, cause it just seems so obvious that the economic conditions of the boomer generation were just better. It feels like I'm being told not to believe my lying eyes. It's of course difficult to compare, as every generation has their own distinct problems, but the list of advantages that specifically the boomer generation had is hard to count. Pre - NAFTA/ globalized workforce, America's labour force didn't need to compete with literal Indonesian children for production and manufacturing jobs. Thank you, Boomers, for the music
Duh when you're older you have more capital that's how it's always worked. What do you expect? 20 year olds to have as much money saved up as people who've worked for 40 years? Amd look at home ownership rates? Aren't millenials and gen z basically tracking the older generations when it comes to owning homes? (accounting for age of course).
I think the point of Scott Galloway's video is to break through to the people who will never be reached by nuance & subtlety. Deliberately magnify the message, exaggerate as much as available metrics allow, because otherwise they will never believe that there is a problem nor will it occur to them to seriously consider that young people aren't bellyaching about nothing. Because in media, there is a whole lot of badly used 'evidence' pushing strongly in the other direction - that everything's fine, young people are just lazy, nobody wants to work anymore, and we should keep taxes as low as possible. Etc, even as home ownership rates plummet, birth rates plummet, age of starting a family gets later & later & family sizes shrink or just reach the end of the line generation. Not that everybody can or should have kids regardless - but when you don't have and can't afford housing security, or to live near your support network of family, then it's a choice many people simply don't have the option to make.
Averages don't mean hardly anything when you look into the numbers and see that it's because an increasingly small number of people are becoming disproportionately rich and the rest of the people are becoming disproportionately more and more poor.
I think it would be more helpful to focus on indicators like output, productivity, and economic growth compared to compensation. Here are some illuminating studies: - RAND Corporation's "Trends in Income From 1975 to 2018" - labor share (% of GDP and business revenue spent on labor, historically vs. today; the labor share is substantially lower today than it was in 1950) - Economic Policy Institute's "Hourly wages of entry-level workers by education, 1973-2011" (published in State of Working America 2012-2013) I don't think anyone should ever agree that worker compensation, whether in relative or absolute terms, should DECREASE when worker productivity/output has skyrocketed. Nor should we ignore the fact that housing, rent, & healthcare costs (particularly in the US) have also skyrocketed. This is particularly important since these take by far the largest portion of our income than anything else, and our so-called inflation indicators don't take this into consideration.
Are you sure that more people getting an education is a positive trend? It sucks up a lot of money that you could've invested in the market and the quality of those degrees is constantly going down
As a 22 year old that is probably never going to make more than my parents , even without accounting ton inflation. It is extremely easy to resonnate with his message. It might not be accurate for everyone but it is definetly true for some. What should we do? How do we show we are needed in the world ?
Yuri your videos, correcting other popular RUclipsrs and Podcasters are something special. You’re like a T cell keeping the system immune from false claims. It’s like a modern version of debating via videos. ❤
Science is political, so I don’t fault him for walking the line of a narrative. At the end of the day we need to pull on people’s heart strings like a politician might in order to make change, since people don’t necessarily act on pure fact. When shitty positions do this narrative science for a political goal it sucks, now when the narrative is desired let’s let it slide.
I think the argument that interest rate decreases offset housing price increases is a weak argument to make. It’s assuming the frame that the only thing that matters is the monthly payment, but having a paid off house is a huge boost to a retirement. If people are waiting longer and longer to buy a house, then we can’t just say a self amortizing 30 year mortgage will take care of paying off the house in time for retirement. This is even more true when you factor in the fact that many people borrow against their homes in the form of HELOCs and refinances. Having a cheaper home, regardless of what the interest rates are, makes paying off that home easier. Higher rates make it an easier decision to make as well.
As somebody commented below - the fact that younger generations now feel the need to stay in school for many years longer than the older generations did - that is quite a while to not be in the work force earning money, and advancing your career. That also doesn't account for a lot of them who spend years avoiding college and trying to make their way up - only to submit once they release the disadvantage and go back to school ( I was one of those). I think that has a major affect on lifetime earnings during those years and career advancement (earnings in later years)
Real wages=down, asset inflation=up, median house price to median income ratio=up, economic inequality=up, unionship=down, tuition costs=up, median individual debt level=up, etc, etc. I think you can say that in real terms people nowadays are worse off economically than those in the post war era, it's not a completely binary calculation or conclusion but I think it's a fair ideology. Although I agree with you largely on the point that the speakers choice of statistics and lack of indepth analysis, I don't entirely think your counter arguments are solid, for example you say that the childhood wellbeing statistics of increased depression, drug addiction, suicide, obesity and loneliness are negated by the fact that people in general have a higher quality of life by citing decreased water, air and chemical pollution, this is not child specific and is not indicitive of child specific wellbeing and seems like an attempt to avoid the topic of discussion and appears to be disingenous and misleading. You cannot argue that child wellbeing is better today because water in general is cleaner when child specific depression, suicide, obesity, etc has skyrocketed in recent times, that is an inavlid argument in my view. I think you have done this with other counter arguments aswell and it honestly seems like your belittling the data. This is not hate, just individual criticism based on my personal view, if you disagree then that's absolutely fine, I'd love a response, I am a subscriber in fact.
@@darthbumblebee7310 For instance, between 1947 and 1973, the average hourly wage for production and nonsupervisory workers in the U.S. increased by about 80% in real terms. Workers experienced significant improvements in purchasing power, allowing for increased consumption and a rising standard of living. From 2000 to 2020, real wage growth for many workers has been modest. For instance, the median real wage for U.S. workers grew by only about 2-3% over this period. While there have been periods of real wage increases, such as post-2015, the overall growth has been slow (BLS Real Earnings) For some time now wages have been stagnant relative to productivity, cost of living, education level and corporate profit. I don't like the notion that we have it better than we used to, sure we might have better material standards, etc but relative to fundamental statistics and the share of the pie we've been shafted for decades. I cannot be arsed to provide a specific source for all of these claims, I've done that so much today 😂 however some places to look would be the EPI, BLS, FRED & OECD
@@darthbumblebee7310can you afford to have a house and support a family on one salary? The economy has stagnated in real terms since boomer generation. Wages increased but prices increased much more
@@HyuLilium I thought I already replied to you, perhaps I never did or it was someone else on a different comment but I used the ("Real Wages" CIA.gov) There are other stats and bodies like "THE Productivity Pay Gap" (EPI) etc which further proves my point.
The biggest misconception is that real estate is “required” to be doing better than the previous generation. This is a mistake because real estate prices fluctuate and are more often not an asset if you are living in it, it’s a debt. If people would stop buying expensive vehicles and wasting money consumption a ton of shit they don’t need they can quickly build wealth through investing or buying true assets that make them money. A multi family home where you live in one part and rent out the other IS an asset. Setting up an IRA or contributing to a pension plan or 401K is absolutely the way to grow wealth. If this was mandatory for young people they would see that saving 10-15% of their income into investments is possible. Some sacrifice is required early on but you adjust your lifestyle or grow your income accordingly.
@@ivermektin6874 That's mostly because of left leaning cities refusing to build more and instead relying on band-aid measures like rent control that punish unit-owners and further disincentivizes building more units.
What I believed was the consensus is that the lower income people do effectively make less, the middle income people make the same, and obviously the rich get richer. I don't remember the document I saw this in, but it compares different percentile incomes in the past and present accounting for inflation. The thing is that inflation affects high price items more like cars, and houses inflate faster than average inflation. So the middle and lower percentile income earners still have to work for longer to afford a house than before, especially lower income. Guess what, the average is heavily skewed by the amount of money rich people have, meaning that the average is more than the median, therefore most people are beneath or at middle class. So effectively, most of the common population (sorry but why should I worry about the rich when they're always better off) is worse off monetarily than before comparing percentile to percentile.
I mean sure you can say per person the income is higher, but that doesn’t account for if that money is being held by a small group within that age group. I think it’d help to have a histogram showing wealth ranges and how many are in each and see if it’s skewed. My hunch, it is.
Thanks for covering this topic. I am a millennial, never went to university but earn decent money, and bought my house before everything went crazy during COVID. A lot of my other friends have struggled that didn’t get in at the same time I did, and when they are average house prices as high as they are it’s really easy to look at that and assume that you don’t have it as good or easy as your parents. There is way more nuance to this than just house prices. Everything across the board costs way more than it used to. Our standard of living is higher, but being able to live cheaply is getting harder and harder to do. The cost of living crisis we are facing today was created in the 80’s under thatcher and Reagan, and because everyone feels squeezed by everything all the time now, it’s hard to follow the data and look at macro trends instead of just listening to your gut feelings when you have to pay $100 for three bags of groceries. Regardless, thanks again for discussing this.
You have got to be absolutely delusional to think this new generation is not systematically screwed. I work in a lab & see these new graduates coming in with $40k in student loans meanwhile these biotech companies only want to pay $18/hr and rent is $2k/mo….. Then cars cost way more & food. Half these ppl I work with who work FULL TIME with a bachelor’s degree live with their parents. Not even STEM is a ticket out of poverty these days.
How does the study about 36-40 year olds mean anything about kids today? That's not the latest generation, pretty late in life, it's about the same ages as in the first study just a different point in life. And if you actually want to control for the effect of education, I think you need to actually separate those groups. A lot of income from college students just goes to the cost of school and it's misleading to compare incomes without that factored in.
Thank you so much for providing a nuanced discussion on this matter. It was very eye-opening for me to learn that Prof. G was not a researching academic and only a lecturer at NYU. While I appreciate his empathy for younger generations, I hope that it does not sound overly elitist to say that I am skeptical of his research conclusions for his lack of peer reviewed research.
I usually like your fact checks but this one is pretty poor. Around the 7:30 mark you speak of the FED and NBER studies for average and median holding more value than the Chetty study. That proposition is ridiculous in the American context where 67% of wealth is concentrated in the top 10% of families. Only 2.5 % of wealth is held by the bottom 50%. The Chetty study would be a better respresentation of the median than the average would be, and the median would be the only relevant statistic in the Prof G talk when he is trying to explain the rage in society. In the NBER study, forget 25 and 30 year olds, 35-44 year old median earners now have 50% in 2016 what they did in 1989. 75-84 year olds have 200% P.150 (Measuring Distribution and Mobility of Income and Wealth Volume Authors/Editors: Raj Chetty, John N. Friedman, Janet C. Gornick, Barry Johnson, and Arthur Kennickell. It looks like Chetty is an author on the NBER study. There are good points but other issues with some of your later statements. I imagine Prof G was just picking graphs that were easy to explain. Because people are idiots and cannot understand nuanced figures.
That is simply not how science works. Galloway presents the thesis and he needs to back it up with data. Just pointing to one study, or even three, is not enough for sweeping statements. He can certainly claim that certains studies seem to show a certain correlation or trend but to present it as fact on these studies is just not good enough.
@@dutchymcdutch2553 there are a lot of things we are doing and using that we don't have full scientific proof for. In many cases studies that exist have small samples and all conclude with "more research is needed". Based on that argument nothing should be presented until it's fully proven and peer reviewed, cited by thousands of papers that came to the same conclusion.
@@dutchymcdutch2553 also research is publish or perish, not much that can be trusted anymore. A lot of studies are done that are convenient to others simply because that's where the money is.
@@HyuLilium I appreciate that but if you're a professor and use your credentials to spout "facts" you're held to a higher standard than a simple journalist or youtube/reddit commenter.
Das war das interessanteste was ich seit langem zu dem Thema gehört habe. Und Herr Druyen ist ein sehr angenehmer und bescheidener Redner. Keiner dieser aufgeblasenen "ich bin reich" Angebern. Danke.
17:20 I think this is a flawed analysis. Interest is of course a large part of mortgage costs but it is unpredictable. You can’t rely on interests staying low. That’s why housing prices are a dominant factor in that equation.
Fixed mortgages in the US are a miracle. They genuinely allow you to hedge against inflation. If you're greedy and opt for a variable one, that's on you.
I'm always happy to get my biases exposed, I was very ready to believe this without question. Thank you for your criticism, it helps me hold my own opinions to account.
Regarding the Chetty study, the fact that people need to stay at their parents' house later in life and need to go to more (expensive) school is very telling. Yes it's a single study, but the reason you casually disregard Chetty is exactly why it's important! Not making any money or having appreciating assets in your 20's, then getting saddled with debt before you even start your career is the core problem!
Wait I didn't try yo casually disregard Chetty. This is why I emphasized the other studies do not invalidate Chetty. This is why I myself explicitly mentioned that the other studies found people live with their parents longer and show a new graph showing homeownership is lower for younger generations.
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Get Nebula using my link for 40% off an annual subscription, just $30 for a year or 2.50/month: go.nebula.tv/moneymacro
I try not to nit pick and stick to main points on YT. But, if you want me to nit pick and critique more graphs go here: nebula.tv/videos/moneymacro-economist-nit-picks-scott-galloways-antiboomer-ted-talk
Wouldnt using MODAL income data be a better metric?
you keep talking about how mortgage repayments are cheaper but have you considered the fact that the house price to income ratio (at least in Australia) went from 3.5 in 1980s to 6+ today. Nevermind mortgage repayments, mortgages are harder to obtain in the first place. Gen Z are locked out of the market. www.rba.gov.au/publications/bulletin/2012/dec/pdf/bu-1212-2.pdf
plus with the need to get a college degree since it seems every job now requires one, debt from tuition may further increase this barrier
yes mortgage repayments are easier today but house price to income ratio (at least in Australia where I live) has went from 3.5 in the 80s to 6+ today. Nevermind the interest repayments, mortgages are harder to obtain in the first place. Gen Z are locked out of the market.
Isn't most of your YT nitpicking?
Thanks for the good work, and thoughtful review. I learned from it.
I appreciate whether or not you agree or disagree, that there can be a civil discussion and something can be learned from each other. TED is a condensed timeframe and a hard choice for what nuance there is time to approach versus an academic lecture. I saw the TED talk as a opening salvo to a more granular conversation and it is good to see that it hit the mark.
I discussed Prof. Galloway's TED talk and Joeri's work recently with my dad. As two non-US persons and Prof. Galloway's alumni who have been working closely in related fields, we came up with two thoughts:
1) if we sincerely believe in a definitive fail, we should short it.
2) if the moral guilt from shorting is insurmountable and unbearable, we should utilize financial tools to design insurance products - not for personal gain but to protect the younger generation as they are really failing. A few starting points seem readily available from the TED talk.
However, we stuck at searching for further actions beyond the TED talk - not for Prof. Galloway personally, but for finance and related industry as a whole - since it can be profitable for personal gain (from a callous point of view), or being useful to alleviate others' sufferings immediately. Meanwhile, either is more efficient than sending out the message alone.
But, neither is happening - are the riches don't want to get richer, or the social service know-hows are not interested in this line of work? This is where we got confused.
(Mom cooking breakfast): I bet your Nobel prize is on the way. Go wash your hands.
I was disappointed that you didn't provide the data for your calculations (4:10).
Elder millinial here. You're right that this issue is complex. I grew up in a poor family with a single mother with three children in a rural town. I made more money than my mother ever did within 5 years of graduating college, as my mother never made more than 25k a year, and didn't have a college education. My mother, however, was able to buy a house in a government subsidized neighborhood. I, unfortunately, needed to move to a more expensive city in order to make a decent income, and cannot afford a house within an hour travel time of where I work. So, on one hand, I'm doing better than my mother ever did, but on the other hand, I have had a hard time accumulating assets and building any kind of wealth.
That's quite disappointing. Stay positive.
I think you hit the truth, past govts over stimulated artificial growth for the sake of keeping the economy going through oil shocks and other economic upheavals. Now we are paying for it as many govts are over leveraged and society life expectancy has increased delaying the distribution of family wealth being passed down, where you're fortunate. In saying that the GI and silent generation and those before did it real tough. There wasn't any inflationary expectations for 98% of society.
I feel the same. In Europe, the generation of my parents got married and build their own rather large houses, all was settled at 25.
Today, most of people under 35 can't afford to buy a house, and if they do they will be paying it forever. Same applies, I earn a lot more than my mom, but also need to live in a very expensive city.
What age is “elder millinial” mean? 40?
And this is the point that matters, isn't it? Data points don't matter...
@@jameskamotho7513 Curious
My wage recently doubled. I cant describe how only spending 25% of wage on rent changes everything. Its insane.
Good for you! If you can avoid the hedonic treadmill, it's the kind of thing that will radically change your life in a sustainable way. Congrats!
Not quite down to 25%, but couple years ago I got a new job with 85% increase in pay and, yeah, makes a world of difference towards being able to afford stuff + build wealth vs scraping by.
now imagine yourself as an Asian, the biggest section of the world's population, where your house cost is 30x your annual income. I have to love how westerners complain about their first world problems.
Mazel tov!!
@@xiphoid2011 So I should be grateful to be a westerner, because a house only costs 20x my annual income? Not really. It doesn't matter by which margin I can't afford a house. In the end I still won't have a house.
Why would you compare earnings instead of buying power? Why would you ignore the time value of money when examining early life earnings?
The earnings are inflation corrected, meaning we are talking about buying power here.
Just to clarify, this video does not show that prof. G's message is false, or that the opposite is true. It merely critique's prof. G's evidence. My goal with these videos is to encourage better researched videos on RUclips and to show people what goes wrong in some videos and how they can be improved.
Isn't it possible his Ted talk is for a general audience and not for economists? Aren't you holding his video to the standards of academia when it was never intended for that? Plus, you said yourself how hard it is to measure comparative economic situations between generations. Even professional economists would struggle to come up with hard evidence that young people are doing worse than their parents. That doesn't mean it's not happening.
14:29 - here you show that public and/or _non-profit_ colleges / unis prices went down. But this is 'Murica, where only Ivy League matters. It's a damn shame you didn't show _those_ numbers.
(I'm European and I don't care about Galloway either way, but I see that _you_ picked your numbers as well)
15:48 - another, I'm afraid, cherry picking. You fail to mention that in 1988 average square meter of a house was _much less_ (in PPP) than currently. As in (history goes) "back then, my son, I could buy a 100 sqm house for 3-4 years of salary" - compared to current 10+ years.
Maaaan, I watch you regularly, but this is a _very first time_ I logged in to leave two comments. Shame on you.
@@TheFireGiver Galloway heavily emphasizes his professor status in general and during the TED talk. He also heavily relies on graphs and calculations, implying sophisticated research. I hold him to the standard of an NYU prof doing a TED talk.
You don't have to misinterpreted and cherry pick graphs for a general public presentation.
i understand the intention, but i don't think this level of scrutiny is really appropriate for a 20 minute presentation. citations aren't even expected in that format. and if you're gonna treat it like a paper, why not build a constructive case, based on studies, to show how much better young people are doing, instead of nit-picking the few references given. watching this video in isolation, you still have no clue what is factually the case.
You mentioned it yourself. It's very difficult to accurately measure how young people are doing without looking at individual cases. If I don't pay rent because I live at home at 30 that doesn't mean I'm better off than my dad who moved out of the house at 18. He had to pay rent while I saved money. The experience of my life is worse than his though. Good luck measuring that sort of thing. Repeat that same thing over and over for every aspect of life.
Yeah and complain, complain, complain rather than, 1) have gratitude 2) take responsibility, work hard and consistently, fail then get up and try again, 3) stop blaming others for your failure. Look at yourself in the mirror and say; I'll do better l can do better. Yeah.
@@Joe44944 And while your at it pull yourself up by your bootstraps!
In all seriousness, the youth at today are facing unique challenges compared to other generations and it is reasonable for them to complain about these issues. As mentioned in the video for those youth who are on lower incomes face stagnation if not reduction in living standards. This is not something anyone should be silent on.
@@Joe44944 because telling people to stop complaining fixes anything, right?
If you’re 30 and living at home, you should be well on your way to owning a house. I built my first home not too long ago. It only took me a year of working after moving back in with my parents for me to have enough for a home loan. You can easily save most of your money when you’re living with parents. I did it at 23-24, much younger than 30, working a job that severely underpaid me.
The reality is, you’re complaining without actively doing what has to be done. Saving money.
@@erich1394don't be a victim bro.
I found your critique excellent until your last points. When you criticize Prof G's point about young people having less happiness and well-being, your counterexamples are "comparing apples with oranges." Better statistics on pollution, lead poisoning, and high school graduation are NOT as direct measures of "happiness" or psychological "well-being" as self-harm, depression, and overdose deaths are. Now Prof G is wrong to try to attribute these things to "generational wealth transfer", especially since as you point out his evidence for that is not very good., and for the most part his data showing declines in psychological well-being deal with even younger people than those in their early 20s that his supposed income and wealth statistics are about. The increase in self-harm and depression probably has completely different causes (one possibility being the way children and teenagers, especially girls, use modern social media), but they are certainly more indicative of "happiness" than pollution or high school graduation.
I said the exact same thing in a comment I just posted lol, I wrote a whole ass essay basically saying that I think it's a misnomer to attribute broad and general health advances to child specific statistics like increased suicide rates, obesity rates, depression rates, increased loneliness, etc. To form a conclusion that overall child wellbeing has improved, it assumes that material increases=betterment, It feels really disingenuous and sugar coating, I'm sure he didn't mean that but that's how it came off to me.
Overdose deaths have skyrocketed in North America, but not primarily due to a reduction in psychological well-being or increase in addiction (though this may be *part* of it). Overdose deaths have skyrocketed since the early 2010s mainly due to changes in the illicit drug supply, especially the rise of highly potent fentanyl, which is present in the drug supply in inconsistent and ever-changing and impossible-to-measure amounts. This combination of potency and inconsistency has caused the overdose rates to skyrocket since the early 2010s, even though we don't have evidence of much increase in addiction or Substance Use Disorder prevalence since the early 2010s.
The rise of fentanyl is something that could only have happened under conditions of drug prohibition. If heroin had been legalized and regulated 15 years ago, this disaster would probably never have happened.
I think that's the point he was making. For every study you can find that you can interpret as 'X is definitely true!' there's another study that you can interpret as 'X is definitely false!'. Whatever argument you want to make, you can almost certainly find a number on a chart somewhere that will back it up for you. That's why a more nuanced approach is so important.
@@Betweoxwitegan one essay couple days ago talked about this... that since early 90s prevalent "self help" "you build your success" psychological self monitoring is big , huge thing now that wasnt pre 90s and that is directly linked to wellbeing and happiness. Why you dont have house and pet or wife/husband? Coz you didnt try hard etc. Almost nobody thought like that in gen X or boomer generation. Ontop of that, regardless of if people admit it or not, those parents who struggled 90s and forward to raise current youth, also had effect of that which is often reflected to kids by family wellbeing and stresslevels.
@@effexon Yeah, hyper individuality ignores all of the societal and systemic barriers minorities and people in general face, it creates a culture of shame and a rationale for the hyper privileged, it seeks to maintain dominant hierarchy without any radical change and seeks to perpetuate inequality and injustice as "that's how things are" and "lazy people don't deserve my money" etc
My grandmother was an NHS (UK hospitals) cleaner and bought a 3 bed house in London on her salary. She paid off the mortgage in 10 years. It's now worth £600,000 and she is technically a millionaire because she owns 2 homes.
What NHS Nurse let alone Cleaner today could own a 3 bed house in London?
Exactly, this is what we're seeing in North America too, even if the evidence for it is not tracked in a statistically valid way. A measure of income isn't sufficient. The overall costs of goods and services need to be accounted for too: transportation; groceries; clothing and household goods; medicine; taxes (on income as well as on goods, services, and homes, and hotels, and alcohol, and carbon...); utility bills; material and labour costs for home and vehicle repairs; PERMITS!; insurance; interest on loans; etc.). In theory that's all accounted for under the general concept of 'inflation adjustments' in these economic studies, but I didn't see those details being explicitly addressed in this video. Boomers used to be able to comfortably pay for a house, bills, and 2-4 children on an average annual income, and still have money left over for vacations and a couple of cars. Someone making 25 units per hour or 50k gross units per year isn't going to be able to afford the same level of comfort that Boomers had 40 years ago. I think that was the point prof. G was trying to make in a sensational Ted Talk (yes Ted Talks are usually edited / directed to be 'History Channel' sensationalist messages in order to bedazzle viewers with short attention spans). p.s. Your poor grandmother probably has trouble affording the annual taxes and regular maintenance for her home now, because everyone looks at it and goes 'wow, she must be rich, I'm gunna get me a piece of that pie'.
I understand your sentiment. Although, sorry to break it to you, a house that you reside in, isn't counted in the calculation of whether you're a millionaire or not. That status is a reflection of your investment wealth that is convertible into a liquid amount within a month. Wealthy people like millionaires dont live without a house. Hence why it's excluded.
@@mark-ish Says who? Your primary residence is most people's primary source of wealth storage these days.
@mark-ish I studied politics at undergrad and read published reports from economists. I have never seen this. Can you tell me where you saw this?
@@mark-ish It counts. It serves as the collateral. Try and call an asset manager and they will happily tell you how you can use it as a finance and re-finance tool to leverage 2x out of it (conservatively speaking).
You keep on mentioning an increase in educational attainment as an increase in cohort QoL, but that's only relevant in as much as an increase in relative education levels within a cohort leads to better economic outcomes. Attaching a QoL increase to education itself is meaningless, one could easily argue it's a byproduct of higher requirements for navigating increasingly skill-segregated job markets.
Boomer here. All these studies seem to always ignore Scale of Capital. As others in the comments have pointed out, high interest on a small mortgage is way less than low interest on a large mortgage. Combine this with the fact a house is now around 10 times the average wage as apposed to 3 or 4 times 40 years ago it is not hard to see why younger generations are seeing it as a tough gig. Sure they're probably earning more but you need two people at work to cover the costs which was not my young experience.
Many are also working more than one job and maximum 40 hours a week to get those higher earnings. This is essentially a requirement since they had to do more school to qualify for higher earnings and are riddled with insane student debt.
@@3419651vast majority of Americans have one job. Stat I've seen is like 96%.
The way I’ve gotten genuinely-curious people to realize that younger generations really are worse off is to ask them to convert everything into hours worked.
For minimum wage and for medium income, calculate the number of hours of work needed in early 1980s to buy an education or a house or health care. Compare to the number of hours of work needed today in order to be able to buy an education, a house, or health care. Boomers got to work less.
B
Gosh, we found the one boomer in the world that doesn't pretend not to understand how interest rates work!! Well done
The fact that the younger generation has to stay in school longer is already an issue.
While Prof G's evidence might not be ironclad, the statistical direction of his observations is not really all that controversial.
The fact that younger generations can afford to stay in school for longer and then continue to live better lifes than any generation in human history is an issue to you?
@@Sundara229 True, but note: "can afford to stay in school for longer" is quite often because they "need to". Things are changing now, but for most Millennials there were not enough white collar jobs for non-graduates. And, to become competitive in the marketplace, a graduation wasn't even enough, you went for a Master's. Which means, starting to work later and later
@@Sundara229 They can't afford it. They are getting deeper and deeper into debt just to have half decent job prospects.
@@Sundara229afford now to be in debt later no issue here huh?
@@paulbukowiecki1213 there are horror stories about underemployed grads not making their debt payments but mostly people are being able to pay their debts and in the long run they've been better off for it.
well, my grandfather had a lower class income, raised 2 kids and my gramma didn't work, but earned cash here and there with crafts, etc. They paid off their house in 10 years. No way to even think of doing that now where my daughter lives. The differences seem obvious but my life is not a scientific study!
Its a bit sad that we still dont add "measured by xyz" or "defined as xyz" after every statement.
"wealth", defined how?
"inflation", measured how?
"worse off", measured how?
"economists recomend", economists defined how... which economists?
People just state things as if the definitions and measurement techniques are too annoying to say after every statement. Yet the statement is meaningless without them.
Most people dont even understand what an inflation % even means, or any of these other things. We just run around pretending like we are saying something even though we arent adding definitions or measurement technique after every statement.
That doesn’t mean all he is saying is BS, he might be talking in the podcasts like he is talking to a pal who is looking for some advise, and not to a board of directors, if you wanna know more what he is talking about the responsibility falls on you, not him
@@TheHealthConscounist You miss the point. Stating anything, even to pals, is useless if you don't explain what you're saying. What's the point in talking if you're not communicating anything. It's like speaking in a language that nobody understands.
True and based
I am torn between bashing you and giving you support, what should I do?
So, you really messed up, because inflation, income, wealth, have clear and precise meaning in Economics, did you know?
As for the rest you are right, there are no such a thing as "Economist" or worse or better off, how better? Who knows?
I thought it was interesting that they chose percentage of all wealth without including any information about absolute wealth adjusted for inflation. I'd pretty much expect anyone heavily invested in the market (housing and stock) for the past 10 years to have a larger share given the very long bull market. Older workers have bigger portfolios and higher investment rates, as younger workers spend a larger portion of their income on consumption.
Pretty brave tackling Prof G., Mr. Money & Macro! I wish you good luck in the storm ahead!
In those fields you mentioned yes..But he lacks academic credentials in the human behavioral sciences and has no credibility in that field...
Thanks for the video!
You mentioned that the younger generation is more educated on average, and the financial benfit of the higher education will more than offset the increased cost of living. But you haven't really shared evidence for this (please correct me if I'm wrong). I can't help but think the inverse is true.
Older generation could afford housing, education, and provide for their family all with "low-skilled" job wages, all while people with PhD degree nowagays struggling to make ends meet, let alone buy a house (depends hugely on geography as well as the sector). I have no evidence for this, only anecdotal. But this is the experience I have to share, as well as the experience of people around me (I have a MSc degree from Oxford and I am still struggling to survive, let alone buy a property). I know plenty of old people in their 60s and 70s with only a highschool degree, getting into banking and they comfortably own multiple houses now.
Edit: I would like to point out that I'm based in the UK, so things might be slightly different here than in the US, but I still do believe the overall point stands.
IMO bachelors are usually worth it, especially if you don't want to work a dirty but well paid job. Masters and PhD are not always worth it however. Really depends on the field much moreso than bachelors.
@@szurketaltos2693do you think the Bachelors is worth it? Or is it more attaining the level of competency in literacy, numeracy & other soft skills required to get a place in a Bachelor program themselves are good predictors of lifetime earnings?
People who went directly to trades are earning very well earlier in their careers, but without aptitudes in soft skills that could enhance their craft & business acumen, their income will plateau earlier & their working lives will be shorter as the physical work takes its toll on their body & they are unable to transition into less manual work. (Not EVERYONE can be, or should be, a business owner)
The financial benefit of higher education is almost entirely tied to field of study.
I work at a research institute in the UK. Someone with a PhD in infectious diseases medicine makes £47k. A cleaner here makes £26k. Literal nuclear engineers on £50k and rocket scientists on £45k. You can see this incredible distortion in nearly every industry in the UK; it doesn't make sense to spend tens of thousands of pounds and years of missed work struggling towards a higher post when the higher post just gives you a few extra thousand £ per year. All of my friends who went into education beyond bachelors are poorer off as a result unless they already came from a wealthy background and so were able to study without taking on debt or worrying about living in expensive areas (and areas where research work or hospitals are... Are usually expensive city areas).
@@noaccount4 yes, meanwhile software and finance earn vastly more than their worth to society merits. But they are fields with high profit margins. That said, it also depends where you work. A research institute will usually not pay as much as a company like, say, Astra Zeneca for that infectious diseases expert or Thales for that rocket scientist.
An expensive house with a low interest rate is not the same as a cheap house with a high interest rate.
This becomes a bit confused with the variables as well. The expensive house needs a bigger deposit which takes longer to save for, and because of that there is less time to extend the repayment over. You can throw in side arguments about having to live with parents to save for the mortgage as rent costs make it impossible to save quickly, which lowers life quality potentially, but it also means starting a family is done later. If a late starting family happens, then if the children are forced to again with their parents longer... the cycle continues.
I'm not convinced of the wealth equality is even, at least in UK.
Exactly one has high downside risk one has high upside risk.
They are not the same kind of asset.
Exactly. I would much rather buy a $20,000 house with a 20% interest rate than a $500,000 house with a 1% interest rate. Anyone with a at least one functioning brain cell would.
What do you mean by "cheap"? "Cheap" against the amount of wages that went to service the mortgage.
@@dmike3507 your post is based on irrational & emotional logic. and your half functioning brain cells stops before you end your sentence 😂
Younger generations beeing better educated doesn't do much other than raising the bar and cost of education for everyone.
You now simply need a higher education to get the same income you would before.
The answer is clear and mentioned many times in the video. Yes, young are doing better on average but no one is average anymore because of how messed up inequality has become.
There is a joke that goes, "My grandson is 5, I'm 55, so our average age is 30. In the end, neither of us does naughty things (wink-wink)." This illustrates why relying solely on averages can be misleading. When we look at income statistics, the average can paint a skewed picture. Top earners pulling in significantly more money can inflate the average, masking the fact that many others are struggling financially. It's crucial to consider the distribution of wealth to get a clearer and more accurate understanding of economic well-being.
That said, in the US inequality is currently decreasing from very high to just high. We'll see how that trend lasts.
All the video proves is how impossible it is to precisely measure these things between different groups of people. The past generation could have paid for education, rent, and their mortgage on their own singular income. While today younger people may be wealthier on average, but you don't see in that data that their parents paid their entire education, help pay for their rent and groceries, and helped out with a downpayment.
Given the above the only real way to assess this type of information is to individually go to 55 year olds, then 25 year olds, ask about their life story to the age of 25 and the opportunities given to them. Then feel out all the trends from that.
@@swaggeryyeah, when I was in college I could pay rent & living expenses for a year working just 3 months a year. That was in Seattle in the University District. That’s absolutely impossible now. Kids these days are completely screwed.
On the surface you are right. The study is biased. You prove that correctly. But in any way you "academically" prove that he is wrong. One point is - as you said "young people are joining workforce later". It's not because they are lazy or don't want to have some cash. It's because to earn a little bit better than average person from older generation they must invest much, much more effort into it. And now how high prices + high college tuition accumulate at time when you can't earn and need to pay them... therefore you are in very hard situation: or you have rich parents which pay for it (and then control your life) or you have to take huge amount of debt which will need to be paid back with dividends. Not mentioning that in today world you can't live with lot of stuff that older generations didn't need to buy/pay for, like computers/mobiles, internet.
Well said.
I think this video is trying to prove a point that I don't agree with, namely it is missing that the boomers were able to take advantage of the low interest rate of the last decade much better than the younger generations.
They already owned a house that those younger could never afford and by leveraging that many could take big loans to buy a second, third or fortieth home and corner the housing market even further. I also earn more than my parents, but I have come to the realization that not only will I never be able to live in a house as big as the one I grew up in, when we inherit mom's house, I will have to sell my half to some rich boomer who cornered the housing market, cause I can't afford to buy my sister's half.
You can measure “doing better” by a few metrics.
1. Earnings relative to cost of living.
2. Independence, ability to have kids and live on your own.
3. Happiness with career
4. Physical and mental Health
5. Financial mobility
6. Rate of poverty and homelessness
7. Suffering from all sources
Financial mobility is particularly poorly in the land of opportunity
Part of the reason that most of Europe outperforms the US in related metrics (such how big a predictor of one’s income is the income of their father) is the cheaper education in many countries
I wish earnings relative to cost of living were addressed more. Convert stuff into hours of work needed in order to purchase an education or a house or health care. Makes it clear how good older generations had it
The UK is the country where things have really tilted against the young. It has similar long-term trends to the Americans, but the added bonus of 14 years of governments voted in by and for the elderly. Since 2010, household income for working-age households has fallen, while household income for pensioners has risen - pensions are structurally guaranteed in the UK to exceed wage growth and inflation and are not means-tested, while benefits for the working-age disabled have been slashed and the most significant benefits are now means-tested. Taxes and education costs are massively up from 2010, the right for Brits to work anywhere in the EU is stripped as well, the consequences of the elderly-backed brexit fall on the young who voted against. Add the rising house prices and the costs of rent and mortgages, and that's another large transfer away from the young and towards the old.
But that's from 14 years of government policy, not a long historical trend. Think it's an interesting case study in terms of trust in the system too though, people sometimes talk about increasing anti-democratic views in young Brits... Until the election this year, the young were on the losing side of every national vote in the 13 years from at least 2011, and paid the price.
Idk I get that the charts can show different things, but the housing market alone is a huge slap in the face. A lot more of us live in precariously unmaintained rentals and our retirement is being drained into a landlord’s pocket
thats entirely the fault of you and you neighbors who have consistently voted against making it easier to build housing in local elections across the country. The lack of supply is essentially the single reason why housing is so expensive
@@jorgeavelar98 The generation with the problem don't vote and are not part of HOA's. You are blaming the wrong people...
It's called "lying with statistics". These professors are all out of touch and hide in their offices surrounded by data trying to tell people on the ground "it's not that bad"
@@jorgeavelar98 Which politicians have promised to build more housing, as their primary campaign issue? Specifically to do that, not merely belonging to the party that you think is more likely to increase housing.
@ArawnOfAnnwn none. They know ppl are actively voting against local politicians that in favor of more housing. Ordinary ppl don't want more housing to be built so the "character" of their neighborhood doesn't change without realizing that that is causing the housing crisis
Median vs. mean. Can radically shift the narrative here. Also how was it indexed? In the price of housing, child rearing, education and price of food? I mean, you don't really talk about any distribution or cohort here. Just the entire generation as a whole.
Yes, he gives a brief mention to increased income inequality, but not how that affects this analysis. Basically, like you said medians are far more meaningful here than means. There is a fortunate 20% who have big Banks of Mom and Dad letting them go to expensive schools and graduate debt free and with time to do unpaid internships. Then BMD pays for their wedding and gives them six figures (see this month's The Globe & Mail article on this) for home down payment. This 20% is far wealthier than generations before them.
Meanwhile, kids without this personal bank have far less purchasing power, regardless of incomes being higher, because housing costs and school costs, which they pay far into adulthood because of student loans, went higher than the rate of inflation.
He also neglects to mention the 50% of people who start college and drop out. They are "more educated" than previous generations, but without the income boost but definitely with debt. (A large chunk of people getting debt forgiveness never finished school, and are not high income as detractors falsely describe them.)
I find it hilarious how all the millennials in the comments want to be doing worse so badly
That's a very weird criticism considering the context. He's explaining how someone else's content is full of rhetoric. Joeri is not even trying to argue one way or another, don't you see that?
@@DivinesLegacy Millennials ended up in a very good situation, especially the mid-older millennials. They've done nothing but complain for like 10 years but are in a much better position than just about any generation before them.
@@DivinesLegacyI find it hilarious that the young people have much more depression. Just don't have it... (This is you)
Love your level-headed take on the topics you cover. We need more people pursuing and adopting nuanced views and good faith discussions.
Granma was a single parent of three, worked as a farmer since 5 years old, then as a cleaner. By 45 had bought 2 apartments and payed 5 years of university tuition to my uncle.
I have 5 university degrees, deliver lectures at the world top 1% universities and wont be able to achieve the same by 45. We have the same lifestyle, never eating out and one holiday per year (at parents home)
I appreciate your efforts in presenting a valid view, nonetheless my heart stays with Professor G.
I understand I am biased tough.
I earn more than both my parents but I still can't afford a home anywhere in Canada or USA. I'm not an outlier as the vast majority of the people I know are in the same boat. We may make more money but it sure as hell is worth a lot less than it used to.
Thank you so much, M&M, for doing this critique. I have been watching his podcast for a few weeks, and something in the tone and the quality was bothering me. You have nailed it with this video 😊
Having watched Prof G's Ted Talk, one comparison missing would be a graph which takes into account the normalization of population size between the different cohorts. Additionally, a global comparison of total population size would have been helpful as either supporting or counter evidence.
It would be good to seem an absolute wealth comparison and not just a relative wealth comparison. The past ten years have been very good to people with assets (businesses, 401ks and houses). Old people have more assets. High growth would yield a disproportionate gain for the most heavily invested cohort. Is it really just a "other people doing better" story? Can't tell.
I earn well (top10%). Much better than my parents did, adjusted for inflation. I'm 42 yo. I'm almost bankrupt, over half my wages go towards rent, the other child support and groceries. I have no way of ever owning realestate for the rest of my life. My parents bought prime realestate in Iceland and Canada on teacher's salaries. Yes prof G is correct!
"you have to work harder, be grateful and stop complaining!" says the gaslighters.
😢
Imagine being divorced and having to pay child support and thinking that that changes the average statistics. If you made bad decisions in life that’s on you
@@olety Imagine dodging mentioning that rent eats up half his wages and groceries probably another 20-30%... but HEY, strawman the boomer is here
'half my wages go towards rent, the other child support' - that latter was entirely avoidable. Shouldn't have married.
Yeah, I'm not necessarily in agreement with Scott G's claims but he is absolutely right on the issues of mental health and happiness in the younger generation. There is a trend to social isolation, anxiety is very high, young people have fewer friends (there is a loneliness epidemic), the drop in marriage and relationships (according to latest census the fastest growing cohort is single older unmarried people.
The congressional hearings on social media with the former Facebook exec, Frances Haugen and even the US Surgeon General. I would say that while Scott G may pick supportive data to back his points, I don't think you counter this argument particularly well - I mean so what if less kids have asthma (that's not really mental health).
Just look at all the youtube videos of kids posting they are 18 or 20 and have zero friends. Look at the "Hikkikomori" the antisocial people in Japan who never leave their homes. Its not just Japan those folks are everywhere.
Oh please Galloway has no academic credentials in the human behavioral sciences and lacks the humility to acknowledge it..
@@contracthit9839 Well the US Surgeon General says the same thing.
Give me a one-handed Economist. All my economists say 'on ONE hand...', then 'but on the other...
Harry Truman
😂
To be fair, the TED talk is exactly the kind of academic rigour that I'd expect from a marketing professor giving a TED talk. XD
The wealth transfer has a lot to do with the policies that continue to fund elder care over education and child care. We are paying to take care of them while their parents also paid to take care of them (Tax rates were higher leading to government subsidized education, infrastructure jobs, and cheap quality housing)
Being more educated hasn't yielded the necessary increases in quality of life. Companies aren't even hiring entry-level candidates.
Key criticism: 30% of all middle class are graduating university. The other 1/3 were trades and self employed. But anyone at any job could buy and car in a month or a house in 5 years. Now the proof that is inaccurate is national debt, corporate debt, personal debt, and the absence of wealth due to the aforementioned.
The obvious data are the real data of wealth and demographics. Inflation and equities múltiples are astronomically higher than real values 40+ years ago. It's common knowledge that there's been a "disproportionate" wealth transfer. You're choosing to misinterpret his opinion - again, not his study, his opinion. Most of your content is a lot more thoughtful than this.
Galloway is a marketing expert of course he knows how to craft an attractive narrative for his audience (mostly millennials) so they buy his self help book and listen to his podcasts
TED Talk is always a sign of quality scholarship 😅
Yeah, TED talks are more about entertainment and sharing unique experiences, not for real science.
Evidently Galloway shares that sentiment as well.
Scott Galloway only has an MBA. He doesn't have a PhD, nor has he published original research in any peer-reviewed journals.
He's not a scholar in any real sense.
Adjusted for inflation house prices have doubled between 1995 and 2005. There is a wealth extraction process going between boomers and younger generations through the housing market. It's so bad, that governments don't even include house prices when they calculate inflation, which is a stellar way of cooking the books. Sources to the claim are available upon request(RUclips won't let me post them).
yes but the reason was the low interest rates and all the speculation leading to 2008 crisis, not the housing per se. Without that crisis, home ownership would be much more widely spread in younger generations.That wealth extraction process you speak of is mostly due to unregulated markets and the criminal and mostly unpunished banking manipulations it pushed forward... all unrelated to inflation.
The question of whether or not people are earning as much as their parents at a particular age is probably the wrong question. We should expect them to be earning substantially more because the economy is substantially larger now. The profits have gone to a very small number of people, largely. The question of why may be pertinent to the question of how valid the grievances are. And that's the other thing, whether or not people are richer than their parents is besides the point in general, the question is to what extent older generations made choices that are bad for younger generations in order to enrich themselves and get what they want.
So you fully focused on if u have a valid grievance with the previous generations 😂
I'm sure you'll find one. And I'm sure you will have many excuses why other people are are fault for all kinds of things in your life.
Ah yes, 21 year olds in college should be making more than their parents at 21 with cheaper college or 3+ years of work experience.
@@SkyGlitchGalaxy That is indeed what I'm focused on when the subject is a video called "How the US Is Destroying Young People’s Future". What are you focused on here? Why do you want to change the subject?
The "missing" part of productivity increase goes to purchasing capital. It doesn't go into the pockets of the wealthy. Also, much of the increase in productivity isn't even PER PERSON increase, and the more unproductive people, the more per person rates are blunted.
Older generations definitely made decisions that are bad for their posterity.
Preview: When your generation is the older generation, you will have made decisions that are bad for your posterity. If you are very wise you will have made different mistakes, maybe even new ones! If you are lucky, you'll have built the internet, CRISPR, golden rice or cut the cost to orbit by 90%. I'm seriously rooting for you guys to do just that.
Tactical Recommendation: Don't go after the Boomers. Wait until they die off and then, when the Millennials are the largest generation, you'll be able to start "getting yours" back from the comparatively small X'er voting block. Stick it to the old people hard then. This will not make you happier, or better off, and will maximize misery, but you'll have better luck with this target selection. Of course, the X'ers kinda see this one comming, so...
Practical Recommendation: No one does these things on purpose. They make decisions they think will be the best for themselves and their loved ones. Focus on the closest circle of concern that you most immediately need to change and find a way to produce something that keeps the wheels rolling. If you happen to have the talents needed to cure Alzheimer's, develop better batteries/conductors, or do that mushroom plastics thing...get on that. Be warned, that plan you put in place to solve student loans, or the super fungi fields to eliminate plastics...it's going to explode and the generation that comes after will be having this same conversation about how you ruined everything.
Just for an anecdotal data point, one of my first after HS school jobs which turned into semi-skilled (electronics) paid $2.1 which the inflation calc says is $11.60 now, that was coal mine industry.
The problem with rising prices of homes is not the mortgage installment but the required downpayment to get the mortgage.
Not necessarily, you can save up enough money for a 20% down payment but still not qualify for a mortgage bc of your income
The cost of education in your chart ends at the pandemic, when there was a crash in attendance. There's a rising trend of unemployment. It's also really useful to look at medians, since the rise in inequality also applies to younger generations.
Before watching the video, I will say that I am 22 and yes I feel that we are generally worse off than our parents are. Most of the other people around my age that I talk to also seem to share this sentiment.
In that case, my preview is that nothing in this video goes against that gut feeling. Research that I highlight shows people live with their parents longer each generation. There is some hopeful evidence though that stuff gets better a bit later in life (at least for most Millenials that seems to have been the case so far).
muh fweelings.
A friend here in town lives in a 4 room apartment for 200 euros. They have the price locked in from years 8 ago. A single room apartment today hardly goes by less than 400 here, in walking distance from his apartment.
Feeling, and reality are not the same thing though.
I get why you 'feel' that way, but objectively you've got it better in all but a few ways. Mental health and social skills are lacking, but you have more material wealth, stability, safety nets, lower crime, etc. You earn the same but do not have to start at the bottom, and even have the luxury of refusing the "crappy jobs" that previous generations all had to start with. If you are unemployed it is a choice because there are plenty of jobs available, it's your ego that won't let you flip burgers, or clean stuff, until you find better. You posses more material wealth than any generation before you. Your electronics are cheap and plentiful. A TV used to be a family possession that had to last for decades. Now you feel embarrassed if your phone is more than a couple years old.
What you lack most is perspective. You are the most privileged and wealthiest generation that has ever existed.
You face higher housing costs, and a severe lack of family support, but otherwise have all the advantage.
@@rodrigovaccari7547 where are you getting apartments for 400 euros o-o
Thank you for for providing a more critical look at professor Galloway's famous talk track. I, myself, had seen it and was captivated by his passion. Though as you point out it isn't 100% accurate, I think it is partly valid because it is the way that people feel. Perception is reality for most people
Excellent video. As someone in the scientific field, I really appreciate you bringing much needed facts to the all-so-biased and politicized news. I just want to add that, yes US generational improvement has slowed, but that's to be expected as economies mature. A key fact to remember that rapid increase in living standards before 1970s were due to the built upon a crushing decrease in living standard during The Great Depression. Economic cycles are real and necessary for an economy to stay healthy.
Looking forward to watching this. I've watched scott for like 8 years. It's been nuts to see his growth.
While the average and median wealth does not appear to go down with each generation, it does sound like there is a big increase in inequality with each generation. Why?
Expectation inflation. In the 1960s there were no microwaves, personal computers, smart phones etc. A vacation was to a national park or nearby beach. Shoe repair shops were common. Everyone was "poor" by today's standards. As expectations go up, so does the sense of injustice
Because more freedom does not make more equality of outcome.
And there was far more equality pre-industrial revolution. Bit I'd take may life over anyone living pre-industrial revolution.
I mean, isn't the answer obvious? Because of policy decisions that increased inequality. Weakening of unions, tax cuts for the wealthy and service cuts for the poor, etc.
@@SkyGlitchGalaxy the definition of freedom is pretty nebulous here. Corporations dominating political influence is a freedom for few
Women working is a big part of it. Having 2 income households where both are high earners is largely responsible for the differences in income equality.
Low interest rate with high house cost is a VERY BAD TREND - it actually makes houses less affordable as you have to have a larger bulk sum to get into the market and shows that more houses aren't being built
The reason he didn't look at prices in 2010 is because no current young people bought houses in 2010. Yes, if you look at the 40-50 yo gen X "it's not that bad".
Again, that's only looking at one factor. People who were young in 2010 did not feel lucky, let me assure you. It was a horrible time to be a young person . Sure if you had a good job you could get a house like my brother did, but lots of people simply didn't have jobs in that period.
Meanwhile both gen z and millenials bought a ton of houses in 2019-2020. The affordability of houses comes and goes and overall ownership is slightly down from prior generations but its a marginal shift, not some epochal thing.
As a millennial, the reason none of us bought homes in 2010 is most of us were desperate for work and had only just gotten ourselves started on a stalled career path post GFC, were running our savings (if any) down, and lenders were incredibly cautious about who they lent to so despite nominal payments being low, deposit requirements were high, and many of us were in no position to capitalize on the temporary drop in house prices.
but as he has show by graph, housing affordability today is still better than the 80s (when boomers were buying houses) and still better than 2006 (when gen-X'ers) were buying house. The only one who got lucky were the millennials who bought houses dirt cheap and at 3% interest during the 2010s. Even then, today's gen Z's are still better off than Boomers and Gen-X. Further, US housing is dirt cheap compared to most countries in the world. I'm an asian immigrant, houses in Asian is 30X median income. US housing to income ratio one of the lowest in the world.
@@xiphoid2011 most millennials weren't buying homes in 2010, they had only just started their careers, what savings do you think they were paying their deposits with? What lenders were offering highly leveraged mortgages post-crash to people with no credit history? There was a huge housing price crash in the early 90's and interest rates dropped as well. Boomers & Gen X were in a much better position to capitalise on this at the time (as well as 2010) because on aggregate they had equity and assets to leverage to take advantage of these conditions.
@@xiphoid2011 though US house to income ratio is nothing compared to eg. Canada, UK, Australia, and definitely not compared to Hong Kong
The problem with earning study is that they are inflation adjusted when the official inflation rates haven’t been changed and always changing. Especially nowadays they just constantly swap out items in the previous inflation basket with other items or brand of “equivalent” item if the inflation of original item is too high, which makes official inflation rate way lower than what’s happening in real life. So using official inflation adjustment to study earnings will always be skewed
Education equalling better pay results is false for gen Z - employers expect bachelor degrees now so even the low paied basic jobs require that education
I was born in 1979 and since I was 19 I made more than my parents during the same years. Even taking out my stock options in DSCM and AMZN I still made 30K more than them from 2000 and beyond. I don't have a degree, but my mother does. I do have a couple certifications.
I recall starting to watch Scott Galloway's Ted talk but stopped at the moment he brought this the graph you started with where he compared the the growth of wealth of the 70 plus demographic versus 25 and under demographic.
If you look at 2020 and 1990 census, you'll find that 70+ have increased by 40%. Compounded by the fact that those 70+ in 1990 grew up during the depression and probably got drafted in ww2 which impacted their earning powers. It easily explains the 50% growth in wealth share of 70+ in 1990 vs 2020.
At that point, i knew Scott Galloway was full of it and didn't bother watching the rest
I’m doing very well financially. I’ve made more in the last 3 years than my mom did in 15+ years of hard work. In fact I was able to help her pay off her mortgage 10 years early with little to no change to my lifestyle. However, although a lot of hard work went into my success both from myself and my mother, there was a lot of luck and a dash of affirmative action that made that happen. While the system works for me I’m not blind to the fact that I am a very unique exception to the rule. Overall the system is much worse for everyone, and that to me is the rub. I’m in a place of privilege and will use that to demand as much material change as possible for those that didn’t make it despite their hard work.
I just want to point this out too though. The average American makes 37k a year. This includes people with degrees. I hear people in the medical field complain all the time that I make more than them as a Journeyman Plumber than they do after 50-60k in college debt. I also have 60k in college debt lol but that's another story. I also make 80-100k a year as a plumber..... The average car costs 10k a year to maintain and operate. That is about 1/3 of the average Americans income just to have a car in a country with pretty much non existent public transportation. The Average American CAN NOT actually afford to own a car to get to work and still save for retirement. Let alone do that and afford health insurance.....and afford to pay off that massive student debt, AND afford to own a home at an average cost of $400k a house. Then look at the cost, 10k, just to pop out a baby in a hospital. This country is drunk off greed and its killing us.
The info about average american can't afford care is false. I'm born in the very end of the 70s, so I'm gen X. The most popular cars's price (Toyota Corolla/Camry, Honda Civic/Accord) between when I graduate from undergrad (2000) and now, only went up 60% while the median wages have increased 80%. Cars today is more affordable than 20 years ago. What's driving the increase in "car" cost is that people are increasingly driving way more expensive and unnecessary SUVs. The American spending habit was bad in the 1990s, now it's even worse. Americans really need to learn from us Asian Americans on personal finance and savings.
$10k/year to maintain a car? That sounds like some bullshit.
The average American salary is 60K. Where u get 37K from????
@abarbar06
The average car in the US costs 48k. Let's say you buy it and it's good for 10 years, that makes almost 5k per year. Insurance, fuel, repairs, that's probably close to that figure if you drive a lot. Voilà, 10k per year. Not if you buy a cheaper, used car and drive less, but we're talking averages, right?
@SkyGlitchGalaxy I think it's a bit under 60k, but gross income. 37k is probably after tax, but not sure if it's correct.
Additional context here:
* "Prof G" is a professor of Marketing at NYU's Stern School of Business. He's very highly regarded in his specialty, which he shows here; but that specialty is not macroeconomic research.
* College admission rates are different from 40 years ago because of the Common Application, which made applying to colleges far more convenient (and I think cheaper too). When my classmates and I were applying to college back in the early 2000's, we had to manually fill out separate application forms for each school I applied to, and most people applied to 5-8 schools max. Nowadays, rising seniors are applying to 15-20 schools apiece, so colleges are receiving a lot more applications from which they're admitting roughly the same number of students as they did before (or more, as you indicated).
I came of age in 2008, it was really bad back then. Would still be behind my parents if my job wasn’t at the leading edge of the cyber security community. Given the fact my father is an immigrant from Iran, he was very poor. My mother is also from a poor town in the Cherokee Nation. Wouldn’t have had the opportunities I had without being a pesky script kiddie causing all sorts of trouble as a teen. My heart goes out to other millennials and Gen Z because the struggle is real for most young Americans, and most of the boomer class just doesn’t care.
Very nice vid. I read a lit of Scott's pieces, it is very good that he points out these( and other) issues, also suggests solutions, yet being challanged makes it much more interesting and allows quicker better grow :))) al the best :)))
Unfortunately, you're still making the mistake of focusing on interest rates when discussing house prices. The context matters. The falling interest rates you cite, particularly during the Great Recession and its recovery, reflected lower real and nominal GDP growth. Economic growth expectation changes cause interest rate changes, not the reverse.
Everyone constantly jerking off over the current state of "The Interest Rate" drives me bonkers. Low and high interest rates aren't good and bad, they're totally context dependent like you said. But I've never heard anyone talk about it as if it's not a security going up and down.
Economists do not understand expectations. That is why they are economist and not traders in wall street.
I think what you may be missing out on is that he was a marketing professor and not an economics professor. As far as marketing goes he’s doing incredible, and choosing statistics to best market his ideas (and book) and not necessarily to give the moderate economists view. I think this is alright as the core message is a good thing and I think largely correct. Just like you’ve discussed the increasing difficulty for Americans to move into middle class, I think his focus is on working low to middle income young people which do have a much harder time - and not the entire generation overall despite being presented that way. This makes sense as with increasing wealth inequality if a young person is wealthy and their grandparents were wealthy, the wealthy young person is probably doing significantly better than their wealthy grandparent at the same age. Just my thoughts
11:34 this seems like an easy thing to control. Just show per capita numbers or show wealth of median person in age bracket adjusted for total wealth
... in real (inflation-adjusted) numbers. Totally correct.
The last part of the argument -- supposedly based on "scientific" evidence, which of course is as selective as Galloway's arguments -- is especially weak.
In the NBER paper you cite the youngest cohort is born 1976-85 which means no millennials are even in the study
Millennials are considered those born from 1980-1995, so they are, just a little.
@@NickRavenagreed but considering these discussions focus on millennials vs GenX/Boomers it’s misleading
@@felixbishton3955 It would be nice if you included the time stamp but IIRC, did he just look at the early mid 80’s part and not the 70’s?
@@felixbishton3955don’t forget Gen z
@@SmartChannel01 boomers have.
17:18 home affordability in the 1980's wasnt nearly as bad when you compare the housing spend vs income. the reason a 2019 vs 2023 mortgage payment comparison is valid is because wages were comparable.
@moneymacro while it is great that you are demonstrating weaknesses in Prof Gs analysis. I think your arguments were weak, when you tried to state the oposite. I’ve live in at least 3 states and many others temporarily and i’ve observed property prices skyrocket. Interest rates low or high do not really make a difference when a house that used to be $200k in 2006 is now above a million, and this same trend persists in most developed states.
It is no consolation that you earn less because you spend more time in school - a school that you also pay for by going into massive debt. Also, in many countries it seems nowadays that as you age your earnings tend to flatten. It is as if 'experience' is no longer a value for the private sector. This is really worrying because all these narrative that we are not worse off are based on the assumption that as we age we will earn better. I don't think it will hold water in practice, though.
I get youre playing devils advocate, but some of your critisisms sound more like apologetics. Like the 45 to 55 paying more in taxes. Like, as an absolute value? Or as a percentage? It sounds like a disingenuous taking point millionaires like to use. "I paid 100,000 in taxes this year" though it was just 10% of their capital gains. Profits you only get if you own assets.
Also 45-55 aren't boomers. Its gen X early millenials.
"Look how great you have it, so many kids get to go to college now"
Because if you don't take on this debt you can't default on, you won't be able to support yourself.
Boomers weren't needing to compete with the world, so the need for going into debt to go to college for 4 years wasn't required to make enough money to start a family.
Youre critical of the other guy for bias, but youre also not engaging in good faith.
God, everything about your arguements are just skewed.
You pulled up the chart of mortage/house prices, then said "look. It's a wiggly chart. You can see the mortage/house price dipps after 2009. YES. After a MARKET FAILURE that cause the foreclosure and bankrupcty of family homes. This isn't proving what you think it is. Under normal conditions, bevause people use housing as investment vehicles now, houses even with interest rates included are more expensive in relation to median income. You can just look at homeownership rates to confirm this.
Long story short. Capital is more valuable than labour. Its taxed better than labour, it can yield gains with no effort. The generation with more capital is the one that's better off. That's the boomers.
Additionally, the long term expected returns of investment markets have been depressed through valuation expansion during a multi decades long interest rate decline. Low interest rates signal low productive capacity for capital earned and invested today. So the savings and growth potential of young workers today is not even close to what it was during the 1980s. Not saying it's anybody's fault or claiming victimhood, but working to earn capital in today's low interest rate environment where stock and real estate markets' valuations are expanded to record highs means that there just isn't that same growth potential. The value of time is potentially far less valuable today compared to 1980s. Real interest rates have been zero or negative for over a decade until just recently.
@@aaron159r2 Good, bad, or just bad luck - I'm not here to say.
It's weird, cause it just seems so obvious that the economic conditions of the boomer generation were just better. It feels like I'm being told not to believe my lying eyes.
It's of course difficult to compare, as every generation has their own distinct problems, but the list of advantages that specifically the boomer generation had is hard to count.
Pre - NAFTA/ globalized workforce, America's labour force didn't need to compete with literal Indonesian children for production and manufacturing jobs.
Thank you, Boomers, for the music
@@eirickbuckley9998 "it just seems so obvious"
Then present the actual evidence Scott Galloway failed to present.
+1 you said everything I wanted to!
Duh when you're older you have more capital that's how it's always worked. What do you expect? 20 year olds to have as much money saved up as people who've worked for 40 years?
Amd look at home ownership rates? Aren't millenials and gen z basically tracking the older generations when it comes to owning homes? (accounting for age of course).
I think the point of Scott Galloway's video is to break through to the people who will never be reached by nuance & subtlety. Deliberately magnify the message, exaggerate as much as available metrics allow, because otherwise they will never believe that there is a problem nor will it occur to them to seriously consider that young people aren't bellyaching about nothing.
Because in media, there is a whole lot of badly used 'evidence' pushing strongly in the other direction - that everything's fine, young people are just lazy, nobody wants to work anymore, and we should keep taxes as low as possible. Etc, even as home ownership rates plummet, birth rates plummet, age of starting a family gets later & later & family sizes shrink or just reach the end of the line generation.
Not that everybody can or should have kids regardless - but when you don't have and can't afford housing security, or to live near your support network of family, then it's a choice many people simply don't have the option to make.
We got euro prof dunking on america prof before GTA VI
Averages don't mean hardly anything when you look into the numbers and see that it's because an increasingly small number of people are becoming disproportionately rich and the rest of the people are becoming disproportionately more and more poor.
I think it would be more helpful to focus on indicators like output, productivity, and economic growth compared to compensation. Here are some illuminating studies:
- RAND Corporation's "Trends in Income From 1975 to 2018"
- labor share (% of GDP and business revenue spent on labor, historically vs. today; the labor share is substantially lower today than it was in 1950)
- Economic Policy Institute's "Hourly wages of entry-level workers by education, 1973-2011" (published in State of Working America 2012-2013)
I don't think anyone should ever agree that worker compensation, whether in relative or absolute terms, should DECREASE when worker productivity/output has skyrocketed.
Nor should we ignore the fact that housing, rent, & healthcare costs (particularly in the US) have also skyrocketed. This is particularly important since these take by far the largest portion of our income than anything else, and our so-called inflation indicators don't take this into consideration.
Wow, I am genuinely impressed by this Video. Thank you foir this detailed analysis of a presentation that you fundamentally agree on.
Are you sure that more people getting an education is a positive trend? It sucks up a lot of money that you could've invested in the market and the quality of those degrees is constantly going down
As a 22 year old that is probably never going to make more than my parents , even without accounting ton inflation. It is extremely easy to resonnate with his message. It might not be accurate for everyone but it is definetly true for some. What should we do? How do we show we are needed in the world ?
You're one of my favorite Econ channels. I was skeptical of Prof Gs content as well and its good to have you here to fact check.
He just donated 12 mill to UCLA Extension and UC Berkeley Extension, so probably not doing it JUST for clicks.
Yuri your videos, correcting other popular RUclipsrs and Podcasters are something special. You’re like a T cell keeping the system immune from false claims. It’s like a modern version of debating via videos. ❤
Science is political, so I don’t fault him for walking the line of a narrative. At the end of the day we need to pull on people’s heart strings like a politician might in order to make change, since people don’t necessarily act on pure fact. When shitty positions do this narrative science for a political goal it sucks, now when the narrative is desired let’s let it slide.
🍿🍿
Oh shit it's hoog!
I think the argument that interest rate decreases offset housing price increases is a weak argument to make.
It’s assuming the frame that the only thing that matters is the monthly payment, but having a paid off house is a huge boost to a retirement. If people are waiting longer and longer to buy a house, then we can’t just say a self amortizing 30 year mortgage will take care of paying off the house in time for retirement. This is even more true when you factor in the fact that many people borrow against their homes in the form of HELOCs and refinances.
Having a cheaper home, regardless of what the interest rates are, makes paying off that home easier. Higher rates make it an easier decision to make as well.
I don't know if it's true in America but it's definitely true in Italy 😭😭
As somebody commented below - the fact that younger generations now feel the need to stay in school for many years longer than the older generations did - that is quite a while to not be in the work force earning money, and advancing your career. That also doesn't account for a lot of them who spend years avoiding college and trying to make their way up - only to submit once they release the disadvantage and go back to school ( I was one of those). I think that has a major affect on lifetime earnings during those years and career advancement (earnings in later years)
Real wages=down, asset inflation=up, median house price to median income ratio=up, economic inequality=up, unionship=down, tuition costs=up, median individual debt level=up, etc, etc. I think you can say that in real terms people nowadays are worse off economically than those in the post war era, it's not a completely binary calculation or conclusion but I think it's a fair ideology.
Although I agree with you largely on the point that the speakers choice of statistics and lack of indepth analysis, I don't entirely think your counter arguments are solid, for example you say that the childhood wellbeing statistics of increased depression, drug addiction, suicide, obesity and loneliness are negated by the fact that people in general have a higher quality of life by citing decreased water, air and chemical pollution, this is not child specific and is not indicitive of child specific wellbeing and seems like an attempt to avoid the topic of discussion and appears to be disingenous and misleading. You cannot argue that child wellbeing is better today because water in general is cleaner when child specific depression, suicide, obesity, etc has skyrocketed in recent times, that is an inavlid argument in my view.
I think you have done this with other counter arguments aswell and it honestly seems like your belittling the data.
This is not hate, just individual criticism based on my personal view, if you disagree then that's absolutely fine, I'd love a response, I am a subscriber in fact.
Which source are you using that says that real wages are down compared to prior generations?
@@darthbumblebee7310 For instance, between 1947 and 1973, the average hourly wage for production and nonsupervisory workers in the U.S. increased by about 80% in real terms. Workers experienced significant improvements in purchasing power, allowing for increased consumption and a rising standard of living.
From 2000 to 2020, real wage growth for many workers has been modest. For instance, the median real wage for U.S. workers grew by only about 2-3% over this period. While there have been periods of real wage increases, such as post-2015, the overall growth has been slow (BLS Real Earnings)
For some time now wages have been stagnant relative to productivity, cost of living, education level and corporate profit. I don't like the notion that we have it better than we used to, sure we might have better material standards, etc but relative to fundamental statistics and the share of the pie we've been shafted for decades. I cannot be arsed to provide a specific source for all of these claims, I've done that so much today 😂 however some places to look would be the EPI, BLS, FRED & OECD
@@darthbumblebee7310can you afford to have a house and support a family on one salary? The economy has stagnated in real terms since boomer generation. Wages increased but prices increased much more
Couldn't have said it as well. Good post
@@HyuLilium I thought I already replied to you, perhaps I never did or it was someone else on a different comment but I used the ("Real Wages" CIA.gov)
There are other stats and bodies like "THE Productivity Pay Gap" (EPI) etc which further proves my point.
The biggest misconception is that real estate is “required” to be doing better than the previous generation. This is a mistake because real estate prices fluctuate and are more often not an asset if you are living in it, it’s a debt. If people would stop buying expensive vehicles and wasting money consumption a ton of shit they don’t need they can quickly build wealth through investing or buying true assets that make them money. A multi family home where you live in one part and rent out the other IS an asset. Setting up an IRA or contributing to a pension plan or 401K is absolutely the way to grow wealth. If this was mandatory for young people they would see that saving 10-15% of their income into investments is possible. Some sacrifice is required early on but you adjust your lifestyle or grow your income accordingly.
We are earning more money. Sadly since the boomers were in their 20s the value of that money has dropped 80%
Those income comparison charts are already adjusted for inflation
@@Retotion Inflation doesn't account for housing which is heavily inflated in the UK.
@@ivermektin6874 That's mostly because of left leaning cities refusing to build more and instead relying on band-aid measures like rent control that punish unit-owners and further disincentivizes building more units.
What I believed was the consensus is that the lower income people do effectively make less, the middle income people make the same, and obviously the rich get richer. I don't remember the document I saw this in, but it compares different percentile incomes in the past and present accounting for inflation. The thing is that inflation affects high price items more like cars, and houses inflate faster than average inflation. So the middle and lower percentile income earners still have to work for longer to afford a house than before, especially lower income. Guess what, the average is heavily skewed by the amount of money rich people have, meaning that the average is more than the median, therefore most people are beneath or at middle class. So effectively, most of the common population (sorry but why should I worry about the rich when they're always better off) is worse off monetarily than before comparing percentile to percentile.
I mean sure you can say per person the income is higher, but that doesn’t account for if that money is being held by a small group within that age group. I think it’d help to have a histogram showing wealth ranges and how many are in each and see if it’s skewed. My hunch, it is.
Very good analysis. Its great to go through these narratives
Telling a "prof" that he's a "politician": priceless! (Trust +1)
Great video, thank you. Useful and a value-add.
Thanks for covering this topic. I am a millennial, never went to university but earn decent money, and bought my house before everything went crazy during COVID. A lot of my other friends have struggled that didn’t get in at the same time I did, and when they are average house prices as high as they are it’s really easy to look at that and assume that you don’t have it as good or easy as your parents.
There is way more nuance to this than just house prices. Everything across the board costs way more than it used to. Our standard of living is higher, but being able to live cheaply is getting harder and harder to do. The cost of living crisis we are facing today was created in the 80’s under thatcher and Reagan, and because everyone feels squeezed by everything all the time now, it’s hard to follow the data and look at macro trends instead of just listening to your gut feelings when you have to pay $100 for three bags of groceries. Regardless, thanks again for discussing this.
You have got to be absolutely delusional to think this new generation is not systematically screwed. I work in a lab & see these new graduates coming in with $40k in student loans meanwhile these biotech companies only want to pay $18/hr and rent is $2k/mo….. Then cars cost way more & food. Half these ppl I work with who work FULL TIME with a bachelor’s degree live with their parents. Not even STEM is a ticket out of poverty these days.
Mmmmm
How does the study about 36-40 year olds mean anything about kids today? That's not the latest generation, pretty late in life, it's about the same ages as in the first study just a different point in life. And if you actually want to control for the effect of education, I think you need to actually separate those groups. A lot of income from college students just goes to the cost of school and it's misleading to compare incomes without that factored in.
Thank you so much for providing a nuanced discussion on this matter. It was very eye-opening for me to learn that Prof. G was not a researching academic and only a lecturer at NYU. While I appreciate his empathy for younger generations, I hope that it does not sound overly elitist to say that I am skeptical of his research conclusions for his lack of peer reviewed research.
I usually like your fact checks but this one is pretty poor. Around the 7:30 mark you speak of the FED and NBER studies for average and median holding more value than the Chetty study. That proposition is ridiculous in the American context where 67% of wealth is concentrated in the top 10% of families. Only 2.5 % of wealth is held by the bottom 50%. The Chetty study would be a better respresentation of the median than the average would be, and the median would be the only relevant statistic in the Prof G talk when he is trying to explain the rage in society. In the NBER study, forget 25 and 30 year olds, 35-44 year old median earners now have 50% in 2016 what they did in 1989. 75-84 year olds have 200% P.150 (Measuring Distribution and Mobility of Income and Wealth
Volume Authors/Editors: Raj Chetty, John N. Friedman, Janet C. Gornick, Barry Johnson, and Arthur Kennickell. It looks like Chetty is an author on the NBER study. There are good points but other issues with some of your later statements. I imagine Prof G was just picking graphs that were easy to explain. Because people are idiots and cannot understand nuanced figures.
He should rethink his position and redo the video on Scott's claims. Or is he just for the controversy views?
That is simply not how science works. Galloway presents the thesis and he needs to back it up with data. Just pointing to one study, or even three, is not enough for sweeping statements. He can certainly claim that certains studies seem to show a certain correlation or trend but to present it as fact on these studies is just not good enough.
@@dutchymcdutch2553 there are a lot of things we are doing and using that we don't have full scientific proof for. In many cases studies that exist have small samples and all conclude with "more research is needed". Based on that argument nothing should be presented until it's fully proven and peer reviewed, cited by thousands of papers that came to the same conclusion.
@@dutchymcdutch2553 also research is publish or perish, not much that can be trusted anymore. A lot of studies are done that are convenient to others simply because that's where the money is.
@@HyuLilium I appreciate that but if you're a professor and use your credentials to spout "facts" you're held to a higher standard than a simple journalist or youtube/reddit commenter.
Das war das interessanteste was ich seit langem zu dem Thema gehört habe. Und Herr Druyen ist ein sehr angenehmer und bescheidener Redner. Keiner dieser aufgeblasenen "ich bin reich" Angebern. Danke.
17:20 I think this is a flawed analysis. Interest is of course a large part of mortgage costs but it is unpredictable. You can’t rely on interests staying low. That’s why housing prices are a dominant factor in that equation.
Huh? Americans have fixed mortgages.
@@toomanymarys7355 It depends because sometimes they only offer fixed mortgage for 5 to 10 years and then you re check with them the percentage
Fixed mortgages in the US are a miracle. They genuinely allow you to hedge against inflation. If you're greedy and opt for a variable one, that's on you.
I'm always happy to get my biases exposed, I was very ready to believe this without question.
Thank you for your criticism, it helps me hold my own opinions to account.
Regarding the Chetty study, the fact that people need to stay at their parents' house later in life and need to go to more (expensive) school is very telling. Yes it's a single study, but the reason you casually disregard Chetty is exactly why it's important! Not making any money or having appreciating assets in your 20's, then getting saddled with debt before you even start your career is the core problem!
Wait I didn't try yo casually disregard Chetty. This is why I emphasized the other studies do not invalidate Chetty. This is why I myself explicitly mentioned that the other studies found people live with their parents longer and show a new graph showing homeownership is lower for younger generations.