Millennial households in poverty -- Re-launched Discussion

[StatGuy2000]

Hi everyone. As you may know, I had previously started a discussion regarding poverty rates among Millennial households in the US (see the link here for those who may not be familiar).

https://www.physicsforums.com/threads/more-millennial-households-in-the-us-are-in-poverty.936087/

After reviewing the thread and having talked about this with others, I've come to realize that the discussion that I initiated (certainly my entries in the thread) were not up to the standards that I personally would subscribe to. So with the kind help of @russ_watters , I've decided to re-launch the discussion here.

Intro
I thought I'd point out some disturbing news related to the Millennial generation (those born in 1980 and afterwards) in the US:

Fact(S) to be Discussed [1]

http://www.pewsocialtrends.org/2011/11/07/chapter-2-income-poverty-employment/

Over time, more of those in the younger generations (under 35) are in poverty even as the older generations (over 65) have been improving. 30 years ago, the poverty rate for these groups was about equal at 17% whereas today the poverty rate among millennials is 22% and the poverty rate for baby boomers is about 11%. There is a lot of related contextual information in the multi-page article linked and I encourage everyone to read at least the page linked, on income, poverty and employment rates for more insight.

Analysis of the Facts
The graph shows long-term, continuous decline in the standard of living of young people that cannot be explained away as temporary due to the Great Recession or caused by “lazy millennials”.

Extension/Prediction
This shows permanent injury to millennials that will in the future reverse the trend of improving standard of living for older people, causing millennials to spend their entire lives at lower standards of living than their predecessors.

Reaction
What is striking is how this is not causing greater alarm with the broad fabric of American society that the younger generation has fewer opportunities for advancement and are living in poverty.

 

[Stephen Tashi]

One thing that isn't clear to me is the definition of "household". For example, if a person was 20 years old and living with his parents but filling an income tax return, was he counted as a "household" different than his parents household?

 

[Posty McPostface]

Aging populations living longer, rising costs of living, lack of education among the poor, having more children to support relative to the mean (also starting at an earlier age), poor ability to save or an inability in some cases due to again lack of education and a rather dismal minimum wage, growing inequality (confounding factor), inability to invest due to no savings, higher unemployment rates among the poor, and so on...

Also, an analysis of change in the population pyramid relative to the distribution of net GDP over time in respective age brackets, in the US would be pertinent to the discussion.

Bad and even discriminatory policies like the Federal Housing Administration (FHA) starting in the 1930s, intended to assist white people and to do nothing for black people could be seen as a major factor. E.g, millions of Americans bought new homes with mortgages guaranteed by FHA. These homes have since appreciated several times over, plus inflation. A very affordable post WWII house selling for $8,000 in 1950 ($100,000 roughly in 2015 dollars) sold for $300,000 to $450,000) in 2016. That's a tremendous gain of wealth that can be used for advancing education and careers. White veterans also were eligible for college loans or grants. Blacks (and Mexicans, Aboriginals, and Asians) were systematically excluded.

So, it seems evident that there was/is a distorted and tremendous gain that white middle-class baby boomers derived from said policies.

And it just goes to show that the 2008 recession really was terrible both economically and in terms of increasing levels of disenfranchisement among the targeted age group in that study.

To summarise what I have said in my other post (#3), the Gini coefficient has been rising in the US for quite a while now and such are the results seen in the graph in the OP.

 

[Evo]

Bad and even discriminatory policies like the Federal Housing Administration (FHA) starting in the 1930s, intended to assist white people and to do nothing for black people could be seen as a major factor. E.g, millions of Americans bought new homes with mortgages guaranteed by FHA. These homes have since appreciated several times over, plus inflation. A very affordable post WWII house selling for $8,000 in 1950 ($100,000 roughly in 2015 dollars) sold for $300,000 to $450,000) in 2016. That's a tremendous gain of wealth that can be used for advancing education and careers. White veterans also were eligible for college loans or grants. Blacks (and Mexicans, Aboriginals, and Asians) were systematically excluded. (Bolding by Evo)

So, it seems evident that there was/is a distorted and tremendous gain that white middle-class baby boomers derived from said policies.

I've decided to use this reference which covers everyone and gives background on the events and changes the GI Bill went through.

https://en.wikipedia.org/wiki/G.I._Bill

Please show where you got your numbers on the housing, that may be true for some houses in some parts of the country but it is not true for many homes and not across the country.

 

[BWV]

The null hypothesis would be that this just reflects the 2008-2009 recession. There appears to be a spike around each recession- the early 80s, early 90s, early 00s etc. Pew does not appeared to have updated this now seven year out of date data and the census does not break up poverty data by these age cohorts, but overall poverty levels for individuals age 18-65 has declined

https://www.census.gov/content/dam/Census/library/visualizations/2017/demo/p60-259/figure5.pdf

 

[OmCheeto]

Always a fun topic.

It's been about 10 years since I've looked at this.

I wasn't aware that there was something wrong with the US economy.
Perhaps it is the world economies catching up with ours that makes it look so bad?

Turbo answered my question, and I responded;

Fascinating.
Do the average people in the rest of the world know this?

To which, edward responded;

In the developed nations the average person probably knows more about the American economic situation than the average American does.

Things don't seem to have changed much.

Color highlighted industries accounted for 50% of our economy in that year.Raw data, as, it's fun to sort things, and say to yourself; "hmmmm..." :

Description    1997_%    2006_%    2016_%    0=mfg    change in %
Automobile manufacturing    0.64%    0.40%    0.22%    0    -65.82%
Printing    0.59%    0.38%    0.25%    1    -58.12%
Wired telecommunications carriers    1.85%    1.28%    1.18%    1    -36.01%
Nondepository credit intermediation and related activities    0.96%    0.98%    0.65%    1    -32.42%
Single-family residential structures    1.02%    1.55%    0.72%    1    -29.29%
Commercial structures, including farm structures    0.58%    0.50%    0.41%    1    -28.15%
Securities and commodity contracts intermediation and brokerage    0.86%    0.96%    0.64%    1    -25.72%
Electric power transmission, control, and distribution    0.69%    0.66%    0.53%    1    -23.38%
Air transportation    0.74%    0.58%    0.58%    1    -21.90%
Motor vehicle and parts dealers    1.13%    0.86%    0.90%    1    -20.67%
Food and beverage stores    0.84%    0.74%    0.74%    1    -11.59%
General merchandise stores    0.75%    0.74%    0.72%    1    -3.85%
Federal general government (defense)    1.98%    2.10%    1.91%    1    -3.76%
Truck transportation    1.07%    1.11%    1.03%    1    -3.55%
Architectural, engineering, and related services    0.87%    1.01%    0.86%    1    -0.96%
Legal services    1.03%    1.12%    1.03%    1    0.23%
Merchant wholesalers, durable goods    2.44%    2.48%    2.45%    1    0.45%
Monetary authorities and depository credit intermediation    1.83%    1.95%    1.85%    1    1.09%
Accommodation    0.77%    0.76%    0.78%    1    1.22%
Merchant wholesalers, nondurable goods    2.12%    2.07%    2.16%    1    1.90%
Oil and gas extraction    0.64%    1.09%    0.66%    1    3.80%
State and local general government    6.50%    6.77%    6.86%    1    5.47%
Light truck and utility vehicle manufacturing    0.72%    0.61%    0.81%    0    12.83%
Housing    5.55%    5.78%    6.29%    1    13.35%
Petroleum refineries    1.02%    2.00%    1.16%    1    13.97%
Other state and local government enterprises    0.65%    0.69%    0.76%    1    16.00%
Other residential structures    0.63%    0.74%    0.75%    1    18.33%
Insurance carriers    1.76%    1.99%    2.09%    1    18.88%
Federal general government (nondefense)    1.04%    1.13%    1.26%    1    20.51%
Full-service restaurants    0.89%    0.92%    1.07%    1    20.95%
Offices of physicians    1.20%    1.35%    1.50%    1    25.37%
Scientific research and development services    0.63%    0.62%    0.84%    1    33.01%
Other real estate    2.50%    3.62%    3.39%    1    35.40%
Insurance agencies, brokerages, and related activities    0.58%    0.65%    0.86%    1    48.78%
Hospitals    1.77%    2.02%    2.65%    1    49.55%
Management of companies and enterprises    1.28%    1.54%    1.98%    1    54.73%
Limited-service restaurants    0.75%    0.90%    1.18%    1    57.04%
Employment services    0.53%    0.67%    0.92%    1    73.47%
Other financial investment activities    0.48%    0.85%    0.90%    1    89.31%
Nonstore retailers    0.39%    0.49%    0.77%    1    97.17%
Wireless telecommunications carriers (except satellite)    0.27%    0.63%    0.83%    1    210.10%

source:
https://www.bea.gov/industry/gdpbyind_data.htm
BEA, Bureau of Econimic Analyis
U.S. Department of Commerce
Gross-Domestic-Product-(GDP)-by-Industry Data
Gross Output
1997-2016: 403 Industries (XLSX)

 

[Ygggdrasil]

I've decided to use this reference which covers everyone and gives background on the events and changes the GI Bill went through.

https://en.wikipedia.org/wiki/G.I._Bill

Please show where you got your numbers on the housing, that may be true for some houses in some parts of the country but it is not true for many homes and not across the country.

The practice of redlining by the Federal Housing Administration has been quite widely reported:

The FHA also explicitly practiced a policy of “redlining” when determining which neighborhoods to approve mortgages in. Redlining is the practice of denying or limiting financial services to certain neighborhoods based on racial or ethnic composition without regard to the residents’ qualifications or creditworthiness. The term “redlining” refers to the practice of using a red line on a map to delineate the area where financial institutions would not invest (see residential security maps).

The FHA allowed personal and agency bias in favor of all white suburban subdivisions to affect the kinds of loans it guaranteed, as applicants in these subdivisions were generally considered better credit risks.

http://www.bostonfairhousing.org/timeline/1934-1968-FHA-Redlining.html

Redlining is frequently cited by scholars examining American inequality, and it was highlighted by Ta-Nehisi Coates in his "Case for Reparations" in The Atlantic.

"Neighborhoods where black people lived were rated "D" and were usually considered ineligible for FHA backing," he wrote. "Black people were viewed as a contagion. Redlining went beyond FHA-backed loans and spread to the entire mortgage industry, which was already rife with racism, excluding black people from most legitimate means of obtaining a mortgage."

Without access to FHA-insured mortgages, he writes, black families who sought homeownership were forced to turn to predatory and abusive lenders.

Coates focused on redlining in Chicago, but — as is immediately obvious on the Mapping Inequality site — redlining was carried out across the country.

https://www.npr.org/sections/thetwo...ooms-in-on-americas-history-of-discrimination

Lines like these, drawn in cities across the country to separate “hazardous” and “declining” from “desirable” and “best,” codified patterns of racial segregation and disparities in access to credit. Now economists at the Federal Reserve Bank of Chicago, analyzing data from recently digitized copies of those maps, show that the consequences lasted for decades.

As recently as 2010, they find, differences in the level of racial segregation, homeownership rates, home values and credit scores were still apparent where these boundaries were drawn.

https://www.nytimes.com/2017/08/24/upshot/how-redlinings-racist-effects-lasted-for-decades.html?_r=0

Although redlining has been ruled as an illegal practice, housing discrimination remains a major problem across the US:

We see this in public opinion. Twenty-eight percent of whites support an individual homeowner’s right to discriminate on the basis of race when selling a home, note researchers in their analysis of the General Social Survey, a long-running study that measures Americans’ attitudes on a wide range of topics. Likewise, when asked in 2008, 20 percent of whites said their ideal neighborhood was all white, 25 percent said it had no blacks, and 33 percent said it had neither Hispanics nor Asians. And only 25 percent of white respondents said they would live in a neighborhood where one-half of their neighbors were black.

We see it in the actions of landlords and real-estate agents. Compared to whites, according to a 2013 study from the Urban Institute and Department of Housing and Urban Development, black renters learned about 11 percent fewer rental units and black homebuyers were shown roughly 20 percent fewer homes; Asian renters learned about 7 percent fewer properties, while Asian homebuyers also learned about 20 percent fewer homes; and Latino renters learned about 12 percent fewer units. (There was no difference in the treatment of Latino homebuyers.) As NPR points out in its analysis, this wasn’t a regional problem: Researchers ran their experiment in 28 different metropolitan regions, with similar results.

http://www.slate.com/articles/news_...lining_housing_values_and_discrimination.html

The American Bar Association has a nice history of housing discrimination in the US that covers many of these topics:
https://www.americanbar.org/publica...l_segregation_after_the_fair_housing_act.html

 

[Posty McPostface]

I've decided to use this reference which covers everyone and gives background on the events and changes the GI Bill went through.

https://en.wikipedia.org/wiki/G.I._Bill

Please show where you got your numbers on the housing, that may be true for some houses in some parts of the country but it is not true for many homes and not across the country.

I assume you are referring to National Defense Education loans. Sorry.

I am afraid my composition was sloppy. It was the FHA loans (and VA housing benefits) that were restricted to whites. I don't know that various groups were systematically excluded from the National Defense education grants (again sloppy posting on my part). At the time, before and for a while after WWII, discrimination in college admissions was rife. Jews were subject to quota ceilings -- some colleges would only admit a certain number, like the Ivy League schools. Blacks with the cash to pay for college would have run into a brick wall at many admissions offices in 1950. Not all, but at most of them. Hispanics and Asians would have had similar experiences, depending on where they lived.

Remember, in 1950, non-discrimination laws were ways into the future.

If you are referencing housing discrimination, I don't have a list of websites available. Most of the information I have is from The Color of Law and a second book, When Affirmative Action Was White, both recently published.

 

[BWV]

While no doubt housing discrimination has been a real problem and contributor to poverty within specific ethnic minorities, I don't see how it explains seven-year old poverty differentials between age cohorts. This seems to be getting off topic

 

[Evo]

While no doubt housing discrimination has been a real problem and contributor to poverty within specific ethnic minorities, I don't see how it explains seven-year old poverty differentials between age cohorts. This seems to be getting off topic

Several of the preceding posts (including my response) are not millenial specific and therefore off topic. Please stay on the topic, some or all of the prior posts may be edited or deleted to keep the thread on topic.

 

[OmCheeto]

While no doubt housing discrimination has been a real problem and contributor to poverty within specific ethnic minorities, I don't see how it explains seven-year old poverty differentials between age cohorts.

Agreed. I did some analysis last year on this.

Source of unemployment figures: http://www.bls.gov/web/empsit/cpsee_e16.htm (data is kept current for this URL, so my data was from 2nd Qtr 2015 & 2016)
Not sure where I got the household incomes. I forgot to jot that down.​

There are definitely still disparities in both employment rates and household income.

This seems to be getting off topic

A whole new bag of worms. And there's not much we can do about the past. And solving that problem, won't solve this problem, IMHO.

So getting back on topic, I was curious if anyone noticed the numbers in my "0=mfg" column? (mfg = manufacturing)
Only one manufacturing industry remained in the "top 50%" as of 2016: Light truck and utility vehicle manufacturing
And it's now 4th from last place in that category.
That strikes me as a problem: We don't make anything any more.

A couple of years ago, my younger brother and I were having a conversation about this.
I said that the biggest problem was that everyone nowadays shops at the dollar store.
"Dollar store" being a metaphor for; "I'm going to buy the cheapest stuff I can find" (Cars, clothing, food, you name the product, etc, etc.)
He apparently shops at the dollar store, as he stated; "Oh, so I caused this problem...?"
Ooops.
I terminated the conversation, pretending I needed a fresh (adult) beverage.

Going back to my chart, in 1997 there were 37 industries that contributed to the top 50%
This number dropped to 29 in 2006 and 2016.
This tells me we are shopping for fewer types of items.

Anyways, it's fun, or sad, to look at declining industries and try and figure out which industries picked up the slack:
"Wired telecommunications carriers" dropped 36% while "Wireless telecommunications carriers (except satellite)" increased 210%
"General merchandise stores" dropped 4% while "Nonstore retailers" increased 97%.

Probably saddest of all is "Employment services", which wasn't even on the chart until 2016.
We now spend 4 times more looking for [better] jobs, which don't exist, than we do on domestically produced cars.
I find that almost incomprehensible.

 

[Ygggdrasil]

Some discussion of race is relevant to the discussion of the baby boomer vs millennial demographics as whites are on average much older than other races:

There were more 24-year-olds in the U.S. than people of any other age in 2015. But for white Americans, 55 was the most common age, according to http://www.census.gov/popest/data/national/asrh/2015/index.html.

In the histogram above, which shows the total number of individuals of each age last year, non-Hispanic whites tend to skew toward the older end of the spectrum (more to the right), while minority groups skew younger (more to the left).

http://www.pewresearch.org/fact-tan...r-minority-groups-its-millennials-or-younger/

This is, of course, not the whole explanation for the differences, but it may play some factor.

 

[OmCheeto]

Some discussion of race is relevant to the discussion of the baby boomer vs millennial demographics as whites are on average much older than other races:

http://www.pewresearch.org/fact-tan...r-minority-groups-its-millennials-or-younger/

This is, of course, not the whole explanation for the differences, but it may play some factor.

A minor factor, IMHO. IMHO, this thread is about a sinking ship. And when a ship is sinking, people are going to look for people to blame.
Race is always the easiest factor.

A local, and personal, case in point: "He also accused Madore of harassment based on Orjiako’s race and Nigerian accent."

I did piece work to assist Mr. Orjiako in getting his PhD, some 30 years ago. Nice guy. I wonder if he remembers me.

 

[gleem]

I've been combing through surveys trying to tease out some insight into this issue with not much to show for it. Let me present some stats that seem to be problematic.

No. of Millennials - 80M

No. of millennials households 28M

Percent of millennials who are married -28% assuming both are Millennials = 11.2 HH http://www.pewresearch.org/fact-tank/2015/03/19/how-millennials-compare-with-their-grandparents/#!10

No. of cohabitating Millennial HHs (cohabitation I believe is considered one HH). 4.5 HH http://www.pewresearch.org/fact-tank/2017/09/06/5-facts-about-millennial-households/

No. of single Millennial mothers. 4M http://www.pewresearch.org/fact-tank/2017/09/06/5-facts-about-millennial-households/

So where can we find 8.3M more HHs. ?

 

[Vanadium 50]

And when a ship is sinking, people are going to look for people to blame. Race is always the easiest factor.

I am hurt by this. Very much so.

I am the one who brought race into this, early in the previous thread. My point is that much - perhaps all - of the change in poverty rates from 1980 to the present can be explained solely by the changing demographics of the 18-34 group. That is, if you took the 18-34 group in 1980, and weighted the composition so that it looked like 2017, you would see a poverty rate much closer to that of 2017. For that, apparently I am a racist.

I had avoided this thread because of what I perceive a lack of seriousness in understanding what is known versus what is suspected versus a particular narrative, but I think I need to defend myself against these kinds of charges.

 

[Posty McPostface]

What would be interesting is to see poverty rates of millennials by educational achievement & by major to see how many people in poverty are pursuing degrees that would help them in terms of social mobility. This would be interested to see because it would give some idea about the discrepancy between poverty rates for, say, a STEM-related major versus something like an arts degree. Perhaps, some Millenials are making poorer choices in terms of the relationship between their field of study and financial prospects. Or they just don't care?

Also not to be "that guy" but illegal immigration has hurt low skill worker job prospects. When you greatly increase the number of workers wages won't increase as fast.

 

[gleem]

I've been combing through surveys trying to tease out some insight into this issue with not much to show for it. Let me present some stats that seem to be problematic.

No. of Millennials - 80M

No. of millennials households 28M

Percent of millennials who are married -28% assuming both are Millennials = 11.2 HH http://www.pewresearch.org/fact-tank/2015/03/19/how-millennials-compare-with-their-grandparents/#!10

No. of cohabitating Millennial HHs (cohabitation I believe is considered one HH). 4.5 HH http://www.pewresearch.org/fact-tank/2017/09/06/5-facts-about-millennial-households/

No. of single Millennial mothers. 4M http://www.pewresearch.org/fact-tank/2017/09/06/5-facts-about-millennial-households/

So where can we find 8.3M more HHs. ?

OK if you take singles not living with parents they are probably taken as a House Hold. It is reported that 34% live with their parents i.e. 27M leaving 53 M making up HHs. Non single HH take up 34.8M leaving 13. 3 M for single HHs. resulting in a total of 32.9 HH (= 19,6 +13,3) as compared to the 28 M quoted by Pew. So what is it or how do you reconcile the difference.

Other problems with these surveys is that the Millennial cohort is not agreed upon. Some take those born between 1980 and 2000 and other between 1980 and 1995 to 1997 which can give a population difference of more than 10M.

 

[OmCheeto]

I am hurt by this. Very much so.

Sorry! But, as you mentioned:

I had avoided this thread because of what I perceive a lack of seriousness in understanding what is known versus what is suspected versus a particular narrative, but I think I need to defend myself against these kinds of charges.

Likewise, I avoided the previous thread, completely. My guess as to why is, as Russ pointed out in post #26; "the thread has been meandering"
Just spent 12 hours analyzing it.
Since I basically ignored it, you can rest assured that you don't need to defend yourself against any "perceived" charges, from me.

I am the one who brought race into this, early in the previous thread. My point is that much - perhaps all - of the change in poverty rates from 1980 to the present can be explained solely by the changing demographics of the 18-34 group. That is, if you took the 18-34 group in 1980, and weighted the composition so that it looked like 2017, you would see a poverty rate much closer to that of 2017.

Ok. I'll look into it some more, as I suspect there may be some merit to your assertion.

But before I do, I should probably post some graphs and charts and things I put together while going through the previous thread, as I'm primarily a "visual" interpreter.

The first comment of yours that caught my eye was:

post #21. Vanadium 50; "While poverty has gone down for all age groups"​

Now, if I had noticed your comment, and known this to be true, it would have caused me to ixnay my entry into this thread, also.
But, having not noticed it until yesterday, I googled the bejeezits out of it, and came up with the following:

The "everyone" slope is nearly flat, with a near half century to create a +change of ≈1%.
source: https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-people.html table #3

Another graph showed that the overall demographics have changed:

But, as you stated:

54. Vanadium 50; Demographic shifts are in the right direction and have the right magnitude to explain most - and quite likely all - of the changes in poverty numbers. The reason the poverty numbers are going up is driven more by the changing demographics of the 18-34's than the plight of our hipster friend.

--- ? from post 21?
--- V50; "The 18-34 demographic was 78% white in 1980 and is 57% white today."​

I'll have to do more data mining, and plot my own graphs, as I can't visualize words.

For that, apparently I am a racist.

?
Are making fun of the Millennial's "I'm offended by everything!" mantra?

 

[OmCheeto]

54. Vanadium 50; Demographic shifts are in the right direction and have the right magnitude to explain most - and quite likely all - of the changes in poverty numbers. The reason the poverty numbers are going up is driven more by the changing demographics of the 18-34's than the plight of our hipster friend.

--- ? from post 21?
--- V50; "The 18-34 demographic was 78% white in 1980 and is 57% white today."
I'll have to do more data mining, and plot my own graphs, as I can't visualize words.

Ok. After just a tad more data mining, and graphing, I agree with your statement.

And with that, I'm out of here!