Posted on 05/21/2024 1:44:36 PM PDT by Heartlander
Years after the fact, the mainstream media is discovering that Gen Z is doomed. As CNN puts it, Gen Z is “earning less, has more debt, and higher delinquency rates than Millennials did at their age.”
In short, the pandemic did a number on Gen Z, followed by a wallop from Bidenflation, lagging wages, and now a looming recession.
How are they surviving? Debt.
A new study from Transunion finds that, since 2013, average debt balances for those aged 22 to 24 has risen by 40%, including a 14% rise in auto loans and a 26% rise in credit card debt.
For those with a mortgage — which is a vanishingly low percent of Gen Z — the average mortgage debt is up by nearly half to $215,000 — quite a bit of debt at 24.
That, of course, is thanks to the Fed’s money printing that drives house prices to an arm plus a leg.
This debt has mirrored the savings rate, which plunged during Covid from an already abysmal 6% pre-pandemic to just 3.2%. So Americans are saving 3.2 cents on the dollar earned. For perspective, in the early 90’s it was three times that.
The pandemic apparently accelerated debt, and most dramatically among the young; Gen Z opened new credit cards at a faster rate than even Millennials during the pandemic — during 2020, there were multiple months when almost 6% of Gen Z’ers had opened at least one new credit card in the previous month.
Note Gen Z has the lowest income — therefore the lowest debt capacity — of any generation. Yet here they are sporting multiple cards and giving them a good workout.
All this debt, of course, is now driving delinquincy rates, with auto loan delinquencies rising by half, and credit card delinquencies doubling since 2022 to over 6% of credit cards in delinquency — not just carrying balances, but in actual delinquency.
Keep in mind that this is all just the debt we can see — buy-now-pay-later has edged out avocado toast for Gen Z’s favorite daytime activity, totaling an estimated $700 billion in shadow debt.
In a recent Harris Poll, one out of three respondents said they’ve spent more than $1,000 on buy-now-pay-later, and 54% of users admitted spending more than they can afford.
One in four reported that buy-now-pay-later is making them fall behind on other lines of credit — note a credit card charges 24% interest per year, which is slightly lower than the mafia.
In a recent video, I mentioned the real-world fallout from all this debt, with declining sales for low-end staples from McDonald’s to Coke to Kraft Mac-n-Cheese — a Gen Z standby. Now Walmart is rolling out a private label brand of items under $5 to clothe our next generation in all the finery their debt will allow.
Gen Z is a financial train wreck — keep in mind this is the next generation of Americans.
They’re facing soaring prices and plunging wages, even as their formative experience of stimulus checks and student loan bailouts has taught them that maybe if they crash hard enough, Mom and Dad — er, the federal government — will bail them out.
We’re raising a generation of wards of the state, sustained not by productive work but by debt and handouts.
Given that government spending is unsustainable at 7% of GDP, they’ll eventually hit reality.
And they’ll be completely unprepared for it.
They do.
They are a surprisingly conservative group.
Mine was born in 1994, He’s all about being more successful than his hyper successful Dad!
I am loving the Competition!!!!
At the moment a 27 yr old who wants an apt and a car better have one hell of a job. I checked a new construction three story garden apt type building shoehorned in to some space at, not near, at the railroad tracks in a heavy commercial area 2400.00 a month for a studio, 4100.00 for a 2 bedroom. For the studio you’d have to take home 600.00 a week just to make the rent.
I predict Gen Z will be the next Greatest Generation. They will rise up and re-established the United States as a republic.
Yes, but have they figured out that the cause is liberalism, socialism, and communism? My Tagline thinks NO.
What about the WAR BABIES, who were squooshed between that generation and the Boomers?
There are good times and bad times and people have ALWAYS had to cope with them. So what's the difference now? NONE! Well, okay, there's Tik Tok, the net, and journalists who only write FEAR PORN!
As long as a majority of any generation votes for the Marxists, they are voting against themselves and future generations. They are just too indoctrinated to see this massive forest of idiocy due to the woke Marxist nonsense implanted in their minds since birth.
Sadly far too many boomers did vote for dems, especially after the dems went full Marxist 20-30 years ago.
It’s not boomers who are to blame, it’s the insidious woke Marxist ideology and the weak-minded people who fell for their cultish sermons.
predict Gen Z will be the next Greatest Generation. They will rise up and re-established the United States as a republic.”
I hope so. I have a Gen Z grandson born in 2004. He is majoring in economics and has been on the Dean’s List at his college for two years. He was an Eagle Scout and coaches Lacrosse. He also has a job on Saturday and Sundays.
He has expressed concern to me that there is discussion among his peers about the difficulty of getting a good job. I think with hard work and frugality that Gen Z can be saved.
But we are here in the Puget Sound region where even the men seem to use the feminine side of the brain and vote like white suburban liberal women. Gen Z will have to see the error of the local voting patterns and rally against them to have success in the future.
I got a useless college degree, saw the error of my ways, took voc-tech training and had a mortgage at age 26. Some thinking outside the box is required for any young person to succeed but Gen Z will have to work hard to change what their forebears dumped on them.
Spoken like an arrogant yankee.
IMHO there’s way too many moving parts worldwide to undo this mess.
$34 Trillion in debt in a country where the politicians aid and abet an invasion of illegal aliens.
Florida Senator Rubio said recently that upwards of 30 Million Illegals are presently in this country.
Based on what I see in Florida, that number seems not far off.
In 1981, I remember my 8th grade social studies teacher, a Marine, said to us that “when you go to bed tonight, get up tomorrow, go to school and then go home and then go to bed again, the U.S. has spent one billion dollars.”
Yep. Very depressing. I don’t know how they let it get so bad. Maybe if we ever get the trifecta again, they should pass a bill ending borrowing.
Nothing a world war can’t fix.
You missed my point. Gen Z are literal children. Statistics about them are meaningless. This story is click bait crap.
And I can go back even farther...the GREAT DEPRESSION ( which almost nobody seems to know about anymore ), of the late 19th century was horrific, with multiple major bank closures, and children/early teens leaving school to work, to bring home a meager pay to help support families. Farms were lost, homes were lost, because of the loss of jobs and the inability to pay off mortgages. It was as bad, if not worse than the Crash of '29!
One major difference, today, is that during past recessions and depressions, some prices were lowered and so were salaries, but then, those people still had jobs.
Wanna talk about inflation?
During the 1950s, there several recessions and the financial markets were stagnant. I well remember my mother complaining about the price of tomatoes and some other food items.
Though, yes, purely anecdotal, I can tell you the prices of some items from when my grandparents were newlyweds ( family stories ), as well as what they've been during my own lifetime. The differences are eye-watering!
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