No One’s Feeling the Dow Boom, Least of All Millennials
Perhaps Biggie said it best back in 1997: “The more money we come across, the more problems we see.” Well, OK, his back up singers sang it, and he was most probably referring to the crack-slinging game in which he came up, but his sage street wisdom still applies to economic matters today. Especially if we’re talking about the Dow Jones Average’s record-setting boom from earlier this week. Double-especially if we’re looking at it from the millennial perspective.
As you’ve probably heard by now, the Dow hit an all-time high of more than 14,200 this past Tuesday, surpassing its previous record of 14,164 set back in pre-recession 2007. Given the way that this “milestone” has been treated in the media, the general public perception seems to be that we’re solidly entrenched in a bull market, with our worries due to the anemic recovery we’ve seen since 2008 quickly alleviating.
But don’t start with the champagne wishes and caviar dreams just yet—unless, of course, you were already rich before the market took a dump on Middle America five years ago. Unfortunately, for the vast majority of Americans, what Wall Street is celebrating as the best news in years can only translate to meh.
Indeed, though, there is “mo’ money,” as Big Poppa would say. Problem is, it’s just going to the rich: the top one percent of households in the U.S. have garnered more than 121 percent of all the economic gains that have happened since 2009—the lowest point of the recession—according to researcher Emmanuel Saez. Overall, that’s an 11.2 percent wealth increase for the rich, while the bottom 99 percent of households saw a 0.4 percent decrease. Average Americans are no doubt feeling that disparity.
Our national unemployment rate hangs at just under eight percent. The housing market, which only recently touted the beginnings of a recovery, is still screwed with a home price index 17 percent lower than in 2007. Thanks to January’s tax hikes, 80 percent of Americans are taking home less money than in 2012.
Oh, and since 2007, corporations have shown a 33 percent rise in profits. So much for supply side economics, huh? Looks like only bullshit trickles down.
We millennials know that all too well. As bad as it is for Middle America, there’s even mo’ problems for the 18- to 29-year-old set. As of January, unemployment for millennials sits at more than 13 percent—22.1 percent if they’re black. Since almost two million people in my generation have stopped looking for work, we’re actually closer to 16.2 percent unemployed. If the unemployment rate is the best measure for economic health, millennials have a much different story than the Dow.
Unemployment aside, we’re still seeing least of all any benefit from the Dow’s upswing, and that probably won’t change. Millennials are entering or have entered the most crippled workforce culture in American history, in which companies seek constantly to maximize profits while removing job opportunities. Full-time employment, the bread and butter of my parents’ generation, is basically a thing of the past. Pay rates are staggeringly low, and the huge application pool offers companies no need to incentivize with higher wages.
As a result, we generationally don’t have the capital to participate in the investment economy via stocks and bonds to play the game in the first place. Thanks to this most recent surge, the increase in stock prices makes entering the market even more prohibitive. Even if we had extra cash to invest, most of us likely wouldn’t, anyway. An average student loan debt of $27,000 kinda removes that whole “spare money” thing. So, really, millennials—like lower class Americans generally—are largely are unable to reap the market’s benefits if we expect to both eat tonight and pay our debts.
So, millionaires, forgives us for not sharing your traders’ excitement over the Dow’s spike. We just simply can’t afford any more problems right now.