by Kevin Coupe
Quartz has a fascinating story that speaks to a major problem that retailers almost certainly will be facing in the relatively near future:
“In an economic climate where the top 1% own half the world’s wealth, a new analysis by Credit Suisse suggests that millennials in several advanced economies are likely going to face the worst income inequality of any generation in recent memory. The report, which focuses on the US, Germany, France, and Spain, shows that millennials are generally saddled with more student debt, less inherited money, and stricter mortgages than previous generations. At the same time, a lucky few are set to become spectacularly wealthy, widening the already large gap between rich and poor.”
It is an intriguing - and alarming - analysis, pointing to a confluence of factors. Millennials are more likely to go to college, but college costs have more than doubled during the past 50 years, so they have greater debt. And perhaps of this higher debt load, millennials are less likely than their elders to be entrepreneurial; it is hard to take a flyer when you’ve got high debt payments each month.
While there still will be wealth, Quartz makes the point that it will be in the hands of fewer people, and that’s before the tax reform bill in the US that will repeal the estate tax and, some analysts feel, will be of greater help to the wealthy than the middle and upper-middle classes.
The larger, Eye-Opening point is this - if the vast majority of millennials have less money to spend, it means it will take longer before they do things like get married, buy homes, have children, and start spending the kind of money generally associated with such life decisions.
If you’re in the business of selling thing to people, and your revenue and profits depend on middle class and upper-middle class people opening their wallets, this isn’t good news. It bends the population and expenditure continuum in a way that may be very difficult to bend back.
Good story, and definitely an Eye-Opening one that should not be seen in a vacuum.
Quartz has a fascinating story that speaks to a major problem that retailers almost certainly will be facing in the relatively near future:
“In an economic climate where the top 1% own half the world’s wealth, a new analysis by Credit Suisse suggests that millennials in several advanced economies are likely going to face the worst income inequality of any generation in recent memory. The report, which focuses on the US, Germany, France, and Spain, shows that millennials are generally saddled with more student debt, less inherited money, and stricter mortgages than previous generations. At the same time, a lucky few are set to become spectacularly wealthy, widening the already large gap between rich and poor.”
It is an intriguing - and alarming - analysis, pointing to a confluence of factors. Millennials are more likely to go to college, but college costs have more than doubled during the past 50 years, so they have greater debt. And perhaps of this higher debt load, millennials are less likely than their elders to be entrepreneurial; it is hard to take a flyer when you’ve got high debt payments each month.
While there still will be wealth, Quartz makes the point that it will be in the hands of fewer people, and that’s before the tax reform bill in the US that will repeal the estate tax and, some analysts feel, will be of greater help to the wealthy than the middle and upper-middle classes.
The larger, Eye-Opening point is this - if the vast majority of millennials have less money to spend, it means it will take longer before they do things like get married, buy homes, have children, and start spending the kind of money generally associated with such life decisions.
If you’re in the business of selling thing to people, and your revenue and profits depend on middle class and upper-middle class people opening their wallets, this isn’t good news. It bends the population and expenditure continuum in a way that may be very difficult to bend back.
Good story, and definitely an Eye-Opening one that should not be seen in a vacuum.
- KC's View:
