Pandemic Diary Entry #63
October 26, 2020
This story started as a result of a short conversation about Millennials and the stock market, and then I listened to a story on The World by PRI discussing the disillusionment of Millennials and democracy. There had to be a connection.
To a large degree, Millennials are not in the stock market. Their generation makes up only 3% of the $39 trillion invested across the globe in equity assets.
There are many theories for this, but most of it is monetary and a dose of caution. Older Millennials came of age after 9/11. Young members grew up after the 2008 financial crisis, thus almost no one was able to participate in the long bull market. While this generation was coming close to becoming financially sound enough to consider investing, COVID hit.
In contrast Baby Boomers, grew up investing in the 80s and 90s, when while crashes were common they tended to be short. Also during those decades stocks were compounding annually at around 18%. This is a rather large contrast to the present age where stocks have only provided a 6% compound annual return over the last 20 years.
Millennials did jump into the market during the crash after COVID reached our shores, and as most are comfortable with tech, that is where much of their monies went, they have done well, but will that last, and will they stay in for the long haul?
This has far-reaching consequences. According to the Center for the Future of Democracy at the University of Cambridge in England Young people’s faith in democratic politics is lower than any other age group. The study combined data from 4,000 studies between 1973 and 2020 and included nearly 5 million respondents from 160 countries.
While the concept sounds as though it would be typical, young people grow and their views change, Millennials are different. Across the world their generation is more disillusioned with democracy than Generation X or Baby Boomers were at the same stage of life.
“This is the first generation in living memory to have a global majority who are dissatisfied with the way democracy works while in their twenties and thirties,” said Dr. Roberto Foa, lead author of the report from Cambridge’s Department of Politics and International Studies.
Within the United States, 63% of Millennials were dissatisfied with democracy in their 20s and yet by the time they reached their 30s that number had only fallen to 50%. Contrast that with Baby Boomers, who were satisfied with democracy numbered 74% and only dropped to 68% when they reached their 30s.
It isn’t just Millennials Gen Xers have also grown steadily less satisfied with democracy as they have advanced in life.
The number one reason for this within the United States is money. These two generations have experienced a period in the US, and other parts of the world called “economic exclusion”. This is caused by high unemployment amongst this sector and a wealth inequality that has grown obscene.
These inequalities of financial and housing wealth directly impact the young. In California, factoring in simply the high costs of rent and student debt it is difficult to accumulate savings. This leads to a lower portion of the population owning a home, affecting the starting of families, or even moving off the couch of relatives. The take-away from this is the fact that now more than ever, this wealth inequality shows success is far less dependent upon hard work and much more on inherited wealth and the privileges that money brings.
I have already mentioned that Millennials hold just 3 percent of the wealth, Baby Boomers held 21 percent of the wealth by that same age. That is a huge disparity.
This dissatisfaction puts a focus on how the gap between the young and the old view how democracy is supposed to function. At present, our democracy is not serving the needs of the young, not only monetarily, but also by robbing a generation of life chances, this can be born out in the simple fact that our government refuses to acknowledge climate change.
The present situation shows that disenchanted younger generations are attracted to populism, so is this a good or a bad thing?
First, what is populism? According to the OED, populism is the policies or principles of any of various political parties which seek to represent the interests of ordinary people. While the Cambridge Dictionary describes it as political ideas and activities that are intended to get the support of ordinary people by giving them what they want.
In this leaning towards populism, the report shows that many Millennials in developed democracies see those on opposing sides of the political divide as morally flawed. This helps to widen the divide within politics.
The statistics on this are interesting. In western democracies, 41% of Millennials agree that you can “tell if a person is good or bad if you know their politics”, compared with 30% of voters over the age of 35.
According to Foa “The prevalence of polarizing attitudes among Millennials may mean advanced democracies remain fertile ground for populist politics.”
This is not necessarily a bad thing, it has also been shown that once a populist has been in power for a while, the attraction lessens, and pretty much dies after the populists 2nd or 3rd term.
So what can we learn from this, well, first asking these questions don’t tell us attitudes, simply perceptions. Many studies showed that those that expressed dissatisfaction with democracy still believed it to be the best form of government. At best we can view the downside as youth apathy, but with that you have low voter turnout and participation in the process in general.
This low level of turnout is countered with activism such as protesting or volunteering for organizations that one feels is working toward helping younger generations.
This years election is very different, the youth vote is soaring, it would be great if it continued in the future. The changes needed to get this country working on climate change, wealth disparity and a host of other issues hangs on the shoulders of the younger generations, voting is a great place to start.
San Francisco weather: 70 degrees and sunny
NYSE DOW compared to one year ago: +1145
COVID cases in the US: 8,891,144
Deaths from COVID in the US: 230,515
OED word of the day: fankle- A tangle. Frequently in extended use: a confused or muddled state; a predicament.
Days since Shelter In Place was initiated: 225
Reading: Standing Soldiers, Kneeling Slaves by Kirk Savage
My Black and White Picture of the Day
Something Silly From the Internet: