Millennials are not only expected to make less than their parents, but also never have a chance to retire
Thanks to an economy that has seen wage stagnation for more than a decade, and a debt load unheard of by individuals before the age of 25 thanks to their student loan obligations, a new study within the financial industry asserts that not only will millennials be the first generation not to exceed the previous one economically, but also that they should expect to never be able to retire.
Perhaps then it should come as a surprise that the Millennial generation is rebelling against nearly all societal norms since it appears that they are experiencing the full effects of what many term as the¬†4th Turning.
The Fourth Turning is a¬†Crisis. Old Artists die, Prophets enter elderhood, Nomads enter midlife, Heroes enter young adulthood‚ÄĒand a new generation of child Artists is born. This is an era in which America‚Äôs institutional life is torn down and rebuilt from the ground up‚ÄĒalways in response to a perceived threat to the nation‚Äôs very survival. Civic authority revives, cultural expression finds a community purpose, and people begin to locate themselves as members of a larger group. In every instance, Fourth Turnings have eventually become new ‚Äúfounding moments‚ÄĚ in America‚Äôs history, refreshing and redefining the national identity.¬†America‚Äôs most recent Fourth Turning¬†began with the stock market crash of 1929 and climaxed with World War II. The generation that came of age during this Fourth Turning was the Hero archetype¬†G.I. Generation¬†(born 1901 to 1924), whose collective spirit and can-do optimism epitomized the mood of the era. Today‚Äôs Hero archetype youth, the¬†Millennial Generation¬†(born 1982 to 2004) show many traits similar to those of the G.I. youth, including rising civic engagement, improving behavior, and collective confidence.
In Parsons‚Äô terms, a Fourth Turning is an era in which the availability of social order is low, but the demand for such order is high. Examples of earlier Fourth Turnings include the¬†Civil War¬†in the 1860s and the¬†American Revolution¬†in the 1770s‚ÄĒboth periods of momentous crisis, when the identity of the nation hung in the balance.
The policies that have helped to¬†make America’s wealthy even more money have also made millions of¬†Americans too poor to¬†retire. The problem of¬†insufficient retirement funds isn’t only a problem affecting the elderly. As Credit Suisse Global Wealth Report¬†puts it, “millennials are not only likely to¬†experience greater challenges in¬†building their wealth over¬†time, but¬†also greater wealth inequality than¬†previous generations.”¬†¬† In essence, it all boils down¬†to a trifecta of¬†factors making normal retirement a pipe-dream for¬†both the old and the young alike: ultra-easy monetary policy of¬†the Federal Reserve, stagnating wages and the advent of¬†widespread automation.
Appallingly, there are some people in¬†the financial industry who view this situation as¬†a boon for¬†the stock market. According to¬†Federated Investors portfolio manager Steve Chiavarone, “millennials are entering the workforce, but¬†their wages are going to¬†be under¬†pressure their whole career.” He also¬†told CNBC¬†that, “they won’t make enough money to¬†pay down¬†their debt, fund their life and fund retirement where there is no pension. –¬†Sputnik News
Prior to the Great Depression, there were few guarantees in the workplace and it was unheard for the government, or even with most companies, to provide retirement programs for their workers.¬† But unfortunately for the system at large thanks to more than 70 years of ever increasing obligations to a population by the taxpayers, states, along with the central government, have reached a point where they can no longer afford to write checks their promises can’t cash.
For the Millennial generation, their sea change is not being limited to the West as the economic effects of rebelling from the norm are being felt as far away as Japan where a large portion of this generation has abstained from marriage, child rearing, and long-term career achievement.¬† And in the end it may not be just the Millennials who find themselves unable to retire, because their inability and unwillingness to fund the previous generations own retirement may force even that group to have to work until their deaths, and bring us full circle back to a time where retirement was a dream of the past.
Kenneth Schortgen Jr¬†is¬†a writer for¬†The Daily Economist,¬†Secretsofthefed.com,¬†Roguemoney.net, and¬†Viral Liberty, and hosts¬†the popular¬†youtube podcast¬†on Mondays, Wednesdays and Fridays.¬†Ken can also¬†be heard Wednesday afternoons giving an weekly economic report on the¬†Angel Clark radio show.