This is exactly what one would expect to happen as the wealth gap between young (disproportionately affected by stagnant wages and student-loan debt) and old (disproportionately benefiting from low taxes on property/investments) continues to grow. Some parents pass the proceeds onward, but only to their own children. Some parents can't or won't pass anything on to anyone. The end state is a rigid class system in which most people's wealth is determined by their parentage instead of their own efforts or accomplishments. The solution is to levy less tax on the young and poor, more on the old and rich.
BTW, I'm on neither side of this. I'm too young to be funding my daughter's college or early adulthood, but far too old to be on the other end of any such transfer. If anything, I'd be negatively affected by the suggestion above.
One is the glaring typo--1985 instead of 1965. Two is starting the scale at 30%. That makes the 35-50% jump look far bigger than it is.
The other two problems are cutting off in 2010 (basically during the aftermath of the 2008 recession), and starting in 1965. It looks like support decreased a lot from 1965 to the trough in 1980, then started trending back up. So what you might really be seeing is the consequences of the 1960-2000 period of unprecedented growth, with parental support returning to historical levels.
As an Asian person, I find it odd that people at CNBC would find this odd. Parents supporting young people starting out is an extremely old practice. These days it's paying for student loans, but back in the day it would mean giving household goods, land for farming, etc.
I don't know where you got 1965: clearly they just labeled 1990 as 1980. And truncated scales, clearly marked, are not a cardinal sin. They can be used to mislead but I see nothing wrong with the way they were used here. Cutting it off in 2010 is the bigger issue, I think.
Starting at 30% is not a cardinal sin: comparing things by proportion isn't the only valid purpose of a graph. That said, covering up an apparent peak with an overlay image is a cardinal sin, and you left it out.
> One is the glaring typo--1985 instead of 1965.
It's 1980 instead of 1990 not 1985 instead of 1965.
> The other two problems are cutting off in 2010 (basically during the aftermath of the 2008 recession), and starting in 1965.
It starts in 1985. Starting in 1965 would be an improvement.
Can confirm. Massive help getting through school. Huge "loans" starting my own business. A life lived without financial fear because, even when not being actively aided, knowing that rich folk "got my back" is priceless.
Honestly acknowledging this has made me much more humble in my success and much more liberal in my politics than I would be otherwise.
I graduate high school in '03, turned 18 a month later followed by boot camp two months later. After boot camp, it was 1.5 years of air traffic control training. This involved 8 - 10 days 5 - 6 days a week in the military, knowing if I failed I would be washed out of the career-field, potentially kicked out of the military with no benefits. On a positive note, I wasn't in a combat role so that did alleviate some stress.
After I completed training and was comfortable as a controller I started using my benefits to complete school; went through two master's degrees using my benefits. Separated from the military while living in southern Turkey, accepting a role in a small town in Idaho as a data scientist. Wife and I landed in the states and a month later we drove our two children to a town we've never even visited to start a job I've never done. Five years later, I work from home as a data scientist.
Acknowledging the hard work and risks it took without a fall-back has made me much more conservative in my politics than I would be otherwise.
That was not an easy journey. The resilience to see it all through is certainly admirable.
I can't see why that made you more conservative though.
Is it a sense of wanting to keep every ounce of legitimately hard earned wealth, that would be used to make life easier for others in the work force, when you never got any support ?
Or do you mean it in a sense, where you work your way through the system, feel that the system isn't that bad and that others can similarly work their way through it without needing any extra support ?
I hope it does not come off as confrontational. I am genuinely curious.
It takes a degree of self reflection to be aware of that. I know a couple of "self made men" who are anything but, but they aren't aware of their own advantages to realize that not everyone shares in them.
This is what people don't realize, real poverty is knowing no one has your back, the psycological effect it has on people is inimitable. Bill gates fails? He goes back to harvard, aided by his rich parents, same goes for Zuck, same goes for 90% of the new age entrepreneurs. My point isn't to be derisive of what they've done, they are brilliant entrepreneurs, but it's more a comment on the way the world is heading towards richly rewarding those who already have strong advantages.
Well said and applies to me as well. Thankfully myself, and the founding team of my company are all very aware that this is the case, and feel extremely blessed to have been born in such a fortunate position. I think in this case being self-aware is half the battle, the next half is to aid those without this luxury in concrete ways.
I wish the reality of our economy was talked about more. Without benefiting from the wealth of our parents, we'd be very poor indeed.
Most people I know are being supported in some way by their parents.
Maybe the United States should have a discussion about why most of us our getting poorer. If the American dream is to live better than your parents, then that dream is dead.
The current situation can be partly blamed on the quantitative easing undertaken by the Fed post 2008 housing crisis. By printing trillions of dollars out of thin air and using them to bail out AIG and other rich businesses the dollar in our pockets lost a portion of its value. The wiki section on QE talks about this effect in more detail: https://en.wikipedia.org/wiki/Quantitative_easing#Increased_...
It also went directly into corporate balance sheets instead of to the average person. People that own tons of stock won BIG.
People that own small-medium amounts of stock (think retirement accounts) did okay.
I think as a corollary we must invest heavily in public education (and I don't mean just throwing more money at it)
I went to shitty schools in shitty places but my parents always were tough on education and basically forced me to be "smart". You can't ever guarantee that someone's parents are going to care, but you can provide them an environment that cares and educates them effectively for 7 hours a day.
This is part of a good lecture by Dr. Jordan Peterson on IQ, AI, and how AI is and will continue to displace people who will have no means to work to support themselves: https://www.youtube.com/watch?v=X6yLIdBikmI
I think the reason why this discussion causes so much resentment is the failure to acknowledge that people don't only get rich thanks to their parents and the implied accusation that wealth is the result of privilege, not effort.
I think the American point or view is skewed by politics and the fact that the country didn't have catastrophic events in the last century or so.
My parents and grandparents have zero wealth because they have been born in a socialist country, and I have 100k in savings by age 30 which I consider a huge achievement. Surely you can see why I might be appalled by the suggestion that my money was earned unfairly and more socialism is the answer.
Why is this an issue? I'm in the GenX generation, and I know a lot of people that got help from their parents with college, cars, and even first homes.
Only in that those who aren't getting support are left behind, and feel like failures because they're not able to match the success of their peers, not knowing that they're working with significantly less resources. Also could lead to a lack of sympathy on the part of those who are getting extra help, thinking that those who can't keep up with them are either lazy or less capable, when in fact they are starting from a place of privilege.
Is it possible to resolve this? Parents are going to want to help their children over others; people without that help will feel resentful. Seems like a consequence of human nature, and changing the tax incentives won't ameliorate what is essentially an emotional problem. (The issue isn't parents helping their kids, the issue is the reaction to it)
The biggest issue is resentment, although I've personally gotten over it for the most part.
The key phrase of the article being "secret" - it took me until junior year of college to realize that the reason a lot of my classmates could eat out wherever they wanted and buy whatever clothes they wanted was due to their parents funding their lifestyle. In comparison, I struggled a lot in college financially (even on a full ride scholarship), as well as fitting in with my peers both academically and culturally.
When I had asked my friends how they were able to afford everything, they always told me that they had "money saved up", which I legitimately believed and never really questioned.
It really wasn't until I started working and my friends would reminisce about college that I realized that the "money saved up" was really their parents money. Then some of my friends started buying homes: they had "money saved up" and "invested wisely", they claimed, but this time I was wiser because we were working the same job at the same company, and I knew that they spent more money than me.
When I started my own company, some of my friends in the tech community said something along the lines of, "how much money are your parents gonna invest?" - which is the same kind of assumed privilege that left me feeling so bitter before. I've definitely grown out it since then and have taken steps to stop comparing myself to others as much, but it's human nature to do so and I think my story will ring true with a lot of people with similar backgrounds.
Ultimately, there's nothing inherently wrong with any of this, but I did spend a lot of time saying no to a lot of things (as a result of not having time and/or money) and feeling inadequate as a result. And before anyone says I should "make better friends" - I think our own personal narratives are always biased to sound more self-sufficient than we actually are, so no, I don't blame anyone either.
I had the opposite experience. My father got laid off the year before I was to enter college. Because of the way financial aid worked at the time, it looked back at three years of parental income. He was cashing out his retirement to keep paying the mortgage and buy groceries, but on paper we were too "rich" to qualify for any financial aid. I worked a full time job and enrolled at a community college at night. I paid my own way and worked hard. I never said no to anything and would travel to remote sites if they needed someone to go. I never took out a school loan.
I moved cities for an awesome job and moved in with my best friend from high school. He was on his second year in an engineering program at a major university. I was working full time and going to community college classes at night, while he worked part time and was living on financial aid and loans. I was incredibly jealous. He would go out drinking every night, always had cash to do whatever he wanted, had a nice car, took amazing vacations and I can't tell you how many times I would wake up and see a different girl who spent the night.
Later on, when I looked at my peers who were buying houses and nice cars, I had assumed they were doing better than me, had better jobs, or had help. Nope. They were up to their eyeballs in debt. Some lost jobs and lost everything. My best friend ended up moving away after a suicide attempt and never heard what happened to him.
Lastly, I decided to go back to school for a second degree in electrical engineering. Not because I needed, but because I wanted the challenge. I had to retake some lower level courses that didn't transfer. Overhearing young adults complain about not having time to do anything, school is so hard, and then talking about the party where they smoked pot all night is just cringe-worthy.
You shouldn't feel inadequate at all. I certainly don't.
It contributes to a lack of social mobility, which is correlated with some negative things. It's likely a cause of reduced happiness in populations, among other things.
It doesn't contribute to a lack of social mobility. It is a perceived result of a lack of social mobility. And if your parents are in an income bracket, you are probably going to be in that income bracket. The only thing a high number of people getting help from their parents indicates is they might end up worse off than their parents, in income. But you'd need to wait until they've reached their peak earning years to know for sure.
It's only a problem in that before this was an accepted and expected practice and now people in this situation are looked down upon for needing help. I say it all the time, Americans have not acknowledged that the rules have changed and the conditions that led to prosperity for the previous generation no longer exist in the same quality and quantity for today's young people.
> I say it all the time, Americans have not acknowledged that the rules have changed and the conditions that led to prosperity for the previous generation no longer exist in the same quality and quantity for today's young people.
Yep - and I wish this was more of the conversation ... I'm really playing a completely different game than my late father.
The ONLY reason I realize it vs my peers is because both of my parents died by/in my mid-20s and left me nothing going into adulthood. In contrast, I would anecdotally say >60% of my peers are still receiving parental help with everything from childcare, to down payments on houses, etc - even well into their 30's... regardless of income.
The article suggests that parental support is increasing. Furthermore it seems to be caused by rising rents and non-rising wages making it difficult for young people to support themselves like they largely did in the past.
It's an issue because when your parents were young they didn't need a handout to survive. Nowadays the young are unable to offer themselves the same lifestyle their parents had and that's partly because housing cost is through the roof(pun intended) and partly because our wage has not followed with inflation.
I think that's doubtful. My mom needed help from my grandparents after her divorce. It would have been really tough to survive as a mother of four living on just child support. The idea that the world was easier in the 70's/80's isn't true in any way.
I'm a 22 year old immigrant to Canada.
Moved there when I was 13.
Starting grade 10 I started working, I paid my phone bill, transportation and most other expenses (except of course food and room)
I have worked my way through university, bought a car, and will graduate with $20k in student loans that will vanish once I get my sign-on bonus in two months while making more that 2x of my whole household combined. It's very much possible to move up the social ladder in my eyes.
Am I a low life? What should I feel indebted about.
I'm grateful for their support of my life path, but most people don't have the privilege of living cozy lives.
Wait, I’m that age range too. Where on earth did you go 20 years ago that cost $100k?? That sounds like today’s price tag. I went to a state school that cost a couple of grand per semester in the late 90’s.
Yes, but if everyone you knew wasn’t rich that wouldn’t be the case. For the average person that all sounds ridiculous.
If there is more systemic downward pressure then average people wonder how are all these people surviving if they’re claiming to be self-sufficient, and this article aims to reveal that lie.
I lived at home while I was attending university. I didn't directly receive monetary support from my parents but not paying rent / not paying for food works out to a lot. I'm sure a large number of young people have always received some kind of support from their parents.
Let’s put to one side for a moment the legitimate problem of the millenial generation’s money problem... the central thesis here is that generations should be financially atomized and autonomous. No I don’t come from generational wealth but I’ve always viewed “my” money as the money of my parents and my children should they need it. There is an implicit social construction here of an autonomous nuclear family cut off from an extended family which I find curious and far from universal.
Are parents doing a long term disservice to their children by doing this? I don't know. What I do know is that after highschool, a self-sustained budget became a real thing, real fast. I reckoned that a lot of my friends and peers received this so called drip feed of e-transfers from their parents. My parents were middle-class; not poor by any means, but they believed in "tough love" and strengthening through struggle. It was indeed a rougher ride, but I'm thankful for the outcome. Perhaps there is something intrinsic about paying your own way. But I believe I might be starting to see the subtle differences emerge from the two groups now that I'm in my early thirties among my circle of friends
Readit News
BTW, I'm on neither side of this. I'm too young to be funding my daughter's college or early adulthood, but far too old to be on the other end of any such transfer. If anything, I'd be negatively affected by the suggestion above.
One is the glaring typo--1985 instead of 1965. Two is starting the scale at 30%. That makes the 35-50% jump look far bigger than it is.
The other two problems are cutting off in 2010 (basically during the aftermath of the 2008 recession), and starting in 1965. It looks like support decreased a lot from 1965 to the trough in 1980, then started trending back up. So what you might really be seeing is the consequences of the 1960-2000 period of unprecedented growth, with parental support returning to historical levels.
As an Asian person, I find it odd that people at CNBC would find this odd. Parents supporting young people starting out is an extremely old practice. These days it's paying for student loans, but back in the day it would mean giving household goods, land for farming, etc.
^^^ I know some people are trying to make that happen, but no, it's egregious misconduct and there is no excuse for it.
Starting at 30% is not a cardinal sin: comparing things by proportion isn't the only valid purpose of a graph. That said, covering up an apparent peak with an overlay image is a cardinal sin, and you left it out.
> One is the glaring typo--1985 instead of 1965.
It's 1980 instead of 1990 not 1985 instead of 1965.
> The other two problems are cutting off in 2010 (basically during the aftermath of the 2008 recession), and starting in 1965.
It starts in 1985. Starting in 1965 would be an improvement.
They've actually accidentally swapped the 1980 and 1985 labels. See fig. 3b on page 25 of https://www.psc.isr.umich.edu/pubs/pdf/rr13-801.pdf
Another issue is that I can’t tell what age groups are included. What on earth does “modal age 23-28 mean”
Honestly acknowledging this has made me much more humble in my success and much more liberal in my politics than I would be otherwise.
After I completed training and was comfortable as a controller I started using my benefits to complete school; went through two master's degrees using my benefits. Separated from the military while living in southern Turkey, accepting a role in a small town in Idaho as a data scientist. Wife and I landed in the states and a month later we drove our two children to a town we've never even visited to start a job I've never done. Five years later, I work from home as a data scientist.
Acknowledging the hard work and risks it took without a fall-back has made me much more conservative in my politics than I would be otherwise.
I can't see why that made you more conservative though.
Is it a sense of wanting to keep every ounce of legitimately hard earned wealth, that would be used to make life easier for others in the work force, when you never got any support ?
Or do you mean it in a sense, where you work your way through the system, feel that the system isn't that bad and that others can similarly work their way through it without needing any extra support ?
I hope it does not come off as confrontational. I am genuinely curious.
Most people I know are being supported in some way by their parents.
Maybe the United States should have a discussion about why most of us our getting poorer. If the American dream is to live better than your parents, then that dream is dead.
People who didn't own stock got nothing.
I went to shitty schools in shitty places but my parents always were tough on education and basically forced me to be "smart". You can't ever guarantee that someone's parents are going to care, but you can provide them an environment that cares and educates them effectively for 7 hours a day.
Here's a good one from Eric Weinstein. The whole interview is good (about AI), but at the end he discusses this kind of issue (time is bookmarked): https://www.youtube.com/watch?v=2wq9x2QcZN0&t=4260
This is part of a good lecture by Dr. Jordan Peterson on IQ, AI, and how AI is and will continue to displace people who will have no means to work to support themselves: https://www.youtube.com/watch?v=X6yLIdBikmI
I think the American point or view is skewed by politics and the fact that the country didn't have catastrophic events in the last century or so.
My parents and grandparents have zero wealth because they have been born in a socialist country, and I have 100k in savings by age 30 which I consider a huge achievement. Surely you can see why I might be appalled by the suggestion that my money was earned unfairly and more socialism is the answer.
Causes resentment and division, basically.
If it helps you feel a little more optimistic, many grew up in the recession around the 1980s which was far worse than 2008.
Like PG writes, you can make your life about finding a way to work really hard for a few years so we don't have to one day.
It will almost certainly be more work than others but you will improve more than others from that effort you put in.
Everyone's equal in their potential to have work ethic, developing has to be applied each according to the formulas of the circumstances of our life.
Surrounding yourself with hard workers (regardless of background) is the key I look for.
If there's no work ethic and effort, talent or privilege doesn't really get as far.
The key phrase of the article being "secret" - it took me until junior year of college to realize that the reason a lot of my classmates could eat out wherever they wanted and buy whatever clothes they wanted was due to their parents funding their lifestyle. In comparison, I struggled a lot in college financially (even on a full ride scholarship), as well as fitting in with my peers both academically and culturally.
When I had asked my friends how they were able to afford everything, they always told me that they had "money saved up", which I legitimately believed and never really questioned.
It really wasn't until I started working and my friends would reminisce about college that I realized that the "money saved up" was really their parents money. Then some of my friends started buying homes: they had "money saved up" and "invested wisely", they claimed, but this time I was wiser because we were working the same job at the same company, and I knew that they spent more money than me.
When I started my own company, some of my friends in the tech community said something along the lines of, "how much money are your parents gonna invest?" - which is the same kind of assumed privilege that left me feeling so bitter before. I've definitely grown out it since then and have taken steps to stop comparing myself to others as much, but it's human nature to do so and I think my story will ring true with a lot of people with similar backgrounds.
Ultimately, there's nothing inherently wrong with any of this, but I did spend a lot of time saying no to a lot of things (as a result of not having time and/or money) and feeling inadequate as a result. And before anyone says I should "make better friends" - I think our own personal narratives are always biased to sound more self-sufficient than we actually are, so no, I don't blame anyone either.
I moved cities for an awesome job and moved in with my best friend from high school. He was on his second year in an engineering program at a major university. I was working full time and going to community college classes at night, while he worked part time and was living on financial aid and loans. I was incredibly jealous. He would go out drinking every night, always had cash to do whatever he wanted, had a nice car, took amazing vacations and I can't tell you how many times I would wake up and see a different girl who spent the night.
Later on, when I looked at my peers who were buying houses and nice cars, I had assumed they were doing better than me, had better jobs, or had help. Nope. They were up to their eyeballs in debt. Some lost jobs and lost everything. My best friend ended up moving away after a suicide attempt and never heard what happened to him.
Lastly, I decided to go back to school for a second degree in electrical engineering. Not because I needed, but because I wanted the challenge. I had to retake some lower level courses that didn't transfer. Overhearing young adults complain about not having time to do anything, school is so hard, and then talking about the party where they smoked pot all night is just cringe-worthy.
You shouldn't feel inadequate at all. I certainly don't.
Yep - and I wish this was more of the conversation ... I'm really playing a completely different game than my late father.
The ONLY reason I realize it vs my peers is because both of my parents died by/in my mid-20s and left me nothing going into adulthood. In contrast, I would anecdotally say >60% of my peers are still receiving parental help with everything from childcare, to down payments on houses, etc - even well into their 30's... regardless of income.
Nothing is free. Unless you're a low life, you will always feel indebted to them and make up for it through other means.
Starting grade 10 I started working, I paid my phone bill, transportation and most other expenses (except of course food and room)
I have worked my way through university, bought a car, and will graduate with $20k in student loans that will vanish once I get my sign-on bonus in two months while making more that 2x of my whole household combined. It's very much possible to move up the social ladder in my eyes.
Am I a low life? What should I feel indebted about.
I'm grateful for their support of my life path, but most people don't have the privilege of living cozy lives.
If there is more systemic downward pressure then average people wonder how are all these people surviving if they’re claiming to be self-sufficient, and this article aims to reveal that lie.
Dead Comment
http://instructor.mstc.edu/instructor/swallerm/Struggle%20-%...
Are parents doing a long term disservice to their children by doing this? I don't know. What I do know is that after highschool, a self-sustained budget became a real thing, real fast. I reckoned that a lot of my friends and peers received this so called drip feed of e-transfers from their parents. My parents were middle-class; not poor by any means, but they believed in "tough love" and strengthening through struggle. It was indeed a rougher ride, but I'm thankful for the outcome. Perhaps there is something intrinsic about paying your own way. But I believe I might be starting to see the subtle differences emerge from the two groups now that I'm in my early thirties among my circle of friends