I recently spent some time in the Colorado mountains with my daughter, who has a degree in environmental design from CU Boulder. The discussion of fracking came up, and she expressed her displeasure with that practice.
This got me thinking about the difference in her generation’s socioeconomic values. I believe we run the risk of misinterpreting economic numbers because the context upon which we base our evaluations is skewed by our own generational biases. The millennial generation is, in my opinion, significantly different than the previous two generations and will create an entirely different socioeconomic path.
I am not suggesting a radical change over what the country has experienced since colonists first set foot on soil in America — rather that we continue to see the current generation morph into its own identity, much like all previous generations. Each generation arrives at its values and morals based upon its members’ experiences as children and grandchildren of the previous generations. As all humans do, we take the positives, adopt those, and eliminate or replace the negatives.
The key is what each generation identifies as a positive or negative. For instance, my generation was derided for our lack of “work ethic” because we would not commit to working for one company for 30 years. Seven became the new 30. I believe three may be the new seven; however, is this really negative? Think about the recent low in jobless claims. Millennials’ interest in change every few years leads to a number of individuals who willingly take low-paying jobs for the liquidity of exit, or are jobless for some time. Jobless claims only show those whom were fired.
Based upon history, we assumed a specific natural level of household formation, and thus based our expectations of housing demand upon those assumptions. Without a doubt, millennials’ view of home ownership is different than previous generations. Consumption is another area where, in my opinion, millennials are going to behave differently. Home ownership drives demand for an entirely different set of items than that of a transitory lifestyle, thus both total consumption and the goods consumed will very well be quite different.
As both a father and someone who researches five hours a day, I am excited to see the future unfold.
Kevin Jones, a chartered financial analyst, is principal at Harmonic Investment Advisors in Boise.