How to show you know nothing of history without saying you know nothing of history
“They never had to fight for jobs.”
Nearly every claim made in this TikTok video is incorrect … and off by a huge amount.
I graduated from college in 1980 – at the same age as the poster of this incorrect TikTok video – and started my first full time employment (I had worked part time since age 10).
In 1980, average annual pay was under $12,000
Annualized average inflation rate was 13.5%
Today it’s about 6-7%.
Average mortgage rate was 11.5% (vs about 6% currently)
Year over Year home price inflation was the highest at 15+%
Another chart shows of median sales price shows a large spike in 2021 – prices are now dropping. This chart may be different due to being median prices of existing homes and the other, above, might be average prices, but we do not know. The values between the two charts deviate a lot – see 2008-2010, for example.
You can see the impact pandemic policies had on the housing market:
US Existing Home Sales Decline Re-Accelerates As Rates Rebound | ZeroHedge
Job Market and Unemployment
Unemployment was almost 11% in the early 1980s, together with two back-to-back difficult recessions. This was higher than the Great Recession of 2008-2010.
1980 was roughly the peak of huge baby boom cohort born 20 years earlier when the fertility rate was almost 4. The largest cohort of new job entrants in the last 40+ years was entering the work force simultaneously – leading to demand driven inflation and high unemployment. This is what the fertility rate curve looks like – those born about 1960 were about 20 years old and entering the labor market in 1980. To understand the impact in labor market terms, just change the X-axis labels to start at 1980 instead of 1960 …. you’ll get the idea.
From Business Insider:
Ever since the baby boom that followed World War II, companies have enjoyed a never-ending supply of workers to tap. Hate your job? Fine — we’ll just replace you with one of the hundred others who would be happy to fill your shoes. The abundance of workers made them cheap — and disposable.
Luxuries Come Before Essentials
In 2023, it is reported there will be 4 million college graduates but that it will be years before they are financially independent of their parents. (That article also peddles the myth that inflation is worse in 2023 than it was in the past.) Their source says more than 2 in 3 parents make financial sacrifices to benefit their adult children.
We did not have that option in 1980. Fortunately I was in a field and location where my skills were in some demand, although I did have to apply to a lot of jobs and do many interviews and then accept what I could get.
Today’s graduates:
While older generations are more likely to think that their kids should be completely financially independent by the time they turn 21, young adults say that’s is a good age to start paying some of their own expenses, such as card card bills and travel costs — although they believe covering health insurance, student loan bills or rent should come even later, according to a report by Bankrate.com.
Amused they think they should pay their own “travel costs” – a luxury item – while the essentials like health insurance, loans and rent should be paid for by someone else. (In the original survey, the differences between the categories are too small to be meaningful.)
The idea of traveling after college was non-existent for most of us – we had to be employed and self sufficient immediately. Essentials came first, and luxuries came last, if at all.
I also had to pay for college myself, having worked and saved since age 10, and bought my first car, myself, as a used older Toyota Corolla.
My generation had it better than our parents generation, just as today’s generation has it better than their parents’ generation. Based on history, someone born 20 years from today will have a better life than a 20 year old today – with few exceptions.
College Expenses
I had to pay 100% of my own college education tuition and fees; my parents helped with housing. I lived at home during my first two years at college and went to a local state college before transferring to a university. I worked from age 10 on wards and was required to save at least 50% of my earnings for future college expenses; I generally saved almost all of my earnings.
In present day dollars, my annual tuition and fees at the local college I attended would be about $14,000 at that campus; today’s tuition and fees at list price is $20,000. However, that is the list price – per the college web site, the average student pays $8,700 per year in tuition and fees after receiving discounts, grants and scholarships. That includes a mandatory $380 per year “Health Services fee” that provides access to the college’s own Student Health services and is independent of other health insurance you may have.
The annual tuition today at the university I transferred to is now $16,587 – but if you have health insurance through your parent’s policy, the costs are $2,000 less at about $14,600/year. In fact, the average price paid by students in 2022-2023 after grants and scholarships is about $13,000/year – less than what I paid decades ago.
That surprised me!
TikToker Cat
Tiktoker “Cat” is devoid of facts or logic. With so many errors, she would be last choice for a new hire on a job – and perhaps that is why she thinks competing for a job is difficult right now.
There are numerous factual and logical errors in the “analysis” done by a Tiktoker – yet some reporter and editor thought her nonsense was worthy of widespread media coverage. Talk about misinformation!
To summarize
In 1980:
- Inflation was much higher
- Unemployment was much higher
- Year over Year housing inflation was the highest on record at 15% (and continued high for several years)
- Mortgage interest rates were 2 to 3x greater than today.
- New job market entrants were in the largest young cohort in U.S. history, all competing for jobs with one another.
- Comparing the same colleges from then to now, college expenses are similar or even less now, after adjusting for inflation.
That this nonsense was turned into news reports illustrates how useless journalism is.
Afterword – Why are there many “news” reports making false claims that the “baby boom” had it easy, had no inflation, had easy access to jobs and housing was cheap?
One suggestion is early carpet bombing propaganda to prepare for the next public policy initiatives.
Several government policies like Social Security and Medicare were begun with the false claim they were “trust” funds, saving for our future. In reality, they have been a pay-as-you-go scam, where today’s workers’ Social Security and Medicare fees are transferred directly to those age 65 and up. There is no longer a genuine trust fund of savings. This worked as long as each subsequent generation was larger than the preceding generation. But the U.S. fertility rate fell to 2.1 or lower in 1972/73 – and that model no longer works.
As these funds run out of money, how will this be addressed?
One possibility is to increase taxes on the elderly – particularly those who did “the right thing” and saved and funded their own retirements. An easy way to target the older generation who saved, is to increase taxes on capital gains – as the older we get, the more likely we are to have saved a nest egg. (Simple logic explains that.)
Another proposal has been to raise the “retirement” age again. As a child, the retirement age was 65. But for me, it is 67. It is not really a retirement age but is the age at which one receives “full” Social Security benefits. There is a proposal to gradually raise this age to 69, 70 or even 72. Obviously, many will be opposed to this – France raised the retirement age from 62 to 64 and has seen near continuous riots for months after this was done.
Another is to raise the payroll taxes for Medicare and Social Security; in particular, the “maximum income” on which Social Security taxes will be taken may increase.
The news reports about how hard Gen Z’s life must be- falsely claiming worse than their parents – is pre-propaganda messaging to prepare the public for next steps addressing the demographic problems.
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