Five economic freedoms Millennials should be fighting for

The Rolling Stone magazine prescription of the policies it believes Millennials should fight for, published earlier this week, is a recipe for economic disaster.

There seems little question that Millennials, or generally people born between the early 1980s to early 2000s, have found it more difficult to climb the ladder of economic opportunities over the last few years.

As the writer of Rolling Stone piece, Jesse Myerson, recently put it:

Itʼs a new year, but one thing hasn’t changed: The economy still blows. Five years after Wall Street crashed, America’s banker‑gamblers have only gotten richer, while huge swaths of the country are still drowning in personal debt, tens of millions of Americans remain unemployed – and the new jobs being created are largely low‑wage, sub‑contracted, part‑time grunt work.

Selective indicators are commonly cited when portraying a situation of generalised economic difficulty faced by young Australians.

The latest ABS labour market statistics shows the trend unemployment rate for people aged between 15 and 19 sitting at a staggering 17.2 per cent, compared with a 5.8 per cent unemployment rate for people aged 15 years and over.

Census data shows home ownership rates among young people in Australia have declined over recent decades, with the percentage of home owners aged between 15 and 34 years (with or without a mortgage) falling from 86 per cent in 1981 to 72 per cent in 2011.

A concerning development is the increasing prevalence of late teens and young adults continuing to live with their parents, a sure indicator as to how difficult it must be for some people to make ends meet.

According to ABS Census data, approximately 29 per cent of people aged between 18 and 34 (without a partner or child) lived with one or both of their parents in 2011, up from 21 per cent in 1976.

In fairness, current economic circumstances do not pose doom and gloom for each and every Millennial.

Average incomes earned by young people have been steadily rising in real terms; youth labour participation rates remain high; students are building up their human capital in schools, universities and technical colleges (although the quality of educational services is an important issue); and some, in fact many, are proactively setting out into the market establishing their own businesses.

Young Australians wouldnʼt envy the parlous economic circumstances faced by American, British, French, Greek, Italian and Spanish Millennials, either, but the key issue is that our local economy has, nonetheless, been performing well below its potential.

And an underperforming economy means fewer available opportunities for young (and old) people to earn their own incomes, and hence enjoy acceptable improvements in living standards.

If it is more opportunities that Millennials need, then the socialistic ideas espoused by Myerson ‑ guaranteed public sector jobs, guaranteed minimum incomes, hefty property taxes and collective land ownership, confiscating financial assets, and government banks ‑ are the exact opposite of what will deliver prosperity.

To prevent the deepening of the ʻeconomic hellholeʼ for the young, as Myerson describes it, here are five alternative ideas ensuring a more dynamic and prosperous future.

 

Emancipate our entrepreneurs

Young people have long shown a creative, entrepreneurship spirit when producing new goods and services catering to the needs and desires of consumers.

To get the creative economic juices of Millennials flowing more freely, entrepreneurs should be afforded greater freedom and dignity to explore, in their own ways, productive methods to please the consuming public.

Studies have shown that a less intrusive government, imposing lower taxes and enacting fewer regulations, is a key to promoting entrepreneurial conduct, and, so, by getting out of the way governments can best help young people exhibit their inherent economic talents.

Free our labour markets

For many young people not seeking self‑employment, securing lower paid entry‑level jobs, at the beginning of their working lives, allows them to build the necessary skills and experiences to subsequently progress up the career and income ladder.

But stringent labour market regulations, including mandatory minimum wages and penalty wage rates, tend to price young people, and others on the fringes of the labour market, out of work altogether.

Occupational licensing is another major regulatory problem, preventing youngsters and others, such as migrants, from easily accessing opportunities to earn incomes for themselves.

The raft of labour market regulations, often advocated by insider labour unions as a way to preserve their cosy featherbedded employment arrangements, must cease if Millennials are to tap into more extensive working opportunities in a growing economy.

Stop the reckless spending

In 2007 many thousands of Australian Millennials fervently voted for a Labor Party which promised to end reckless spending, a publicly‑stated commitment by Kevin Rudd which never came to fruition.

After six years of significantly increased government spending, and much of it of negative economic value, the structural fiscal problems posed by the level and scope of such expenditures have become all too painfully obvious.

There remains much low‑hanging fruit to withdraw government from the functional areas of cultural and economic affairs, however the public sector will remain a threat to future economic prosperity for as long as its financing and provision activities dominate the fields of education, health care and social welfare.

These areas of activity are far too important to be interfered with by the state. Far from harming the interests of Millennials, significant reductions in expenditure by the public sector, including in the ʻnew commanding heightsʼ of social spending, should open up opportunities for alternative, diverse non‑state forms of financing and provision.

Deep spending cuts will also helpfully displace a few cronies, so abhorred by the Millennials, from their positions of dependency upon extractive government.

Cut the public debt

The rapid increase in Australian public debt since the 2008‑09 ʻglobal financial crisis,ʼ largely to fund consumptive and redistributive spending, should be of great concern to Millennials.

As explained by economist Hans Sennholz, ʻa government debt is a government claim against personal income and private property, an unpaid tax bill.ʼ

With public debt enabling the cost of financing government spending to spread out over generations, the eventual tax bill will be lumped upon the Millennial generation without their political consent.

To minimise the plunder of the young by the old, outstanding debts must be repaid, as soon as possible, through a return to surplus budgets (founded on spending cuts, not tax increases) preferably in conjunction with a comprehensive privatisation program.

End paternalist government

To borrow a phrase from Myerson, the nanny state blows.

Using subsidy, taxation and regulatory means to forcibly redirect consumer choices, paternalistic government not only economically disempowers individuals from at least making inexpensive choices, to the detriment of attaining reasonable levels of consumer surplus.

Application of policy in this context is also inherently arbitrary and, it follows, unjust, since the force of government is utilised to entrench fiscal and regulatory discrimination across individuals.

If anything, paternalism in public sector policy is hypocritical policy because, after all, middle‑aged and senior politicians in their youth enjoyed the benefits of cheap drinking and smoking without nanny state force weighing upon them so heavily.

As I have speculated elsewhere, Millennials tend to be practising libertarians, eager for the freedom to earn, invest and consume, not to mention keen to attain the freedom to just be themselves.

But it will be only through breaking the chains of intrusive government, avoiding the Myerson prescription for politics in evermore nooks and crannies of our lives, that the hopes and aspirations of young people will be realised to the greatest extent possible.

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40 Responses to Five economic freedoms Millennials should be fighting for

  1. stackja

    A rolling stone gathering moss? So less government good!

  2. Percy

    Great article Julie. Time for The Rolling Stone to print a rebuttal

  3. Mick

    The poor babies! And I do mean babies when we’re talking about post 1980 birth dates. What wonderful socialist solutions proposed by Myerson, exactly the opposite direction to which China has been moving. The problem with the Myerson’s of the world is — though they’ll say otherwise — that they are uneducated in terms of history, or simply ignore it for the sake of their purely academic idealism. Every point Myerson made removes the incentive for one to be better.

  4. rickw

    “There seems little question that Millennials, or generally people born between the early 1980s to early 2000s, have found it more difficult to climb the ladder of economic opportunities over the last few years.”

    Being the worst educated generation The West has produced in 150 years probably doesn’t help either.

    I think the last time engineering shops had to run remedial maths classes was during the industrial revolution?

  5. jupes

    Being the worst educated generation The West has produced in 150 years probably doesn’t help either.

    Dumber but spending much longer at school attaining that level of dumb.

  6. Infidel Tiger

    Millennials tend to be practising libertarians, eager for the freedom to earn, invest and consume, not to mention keen to attain the freedom to just be themselves.

    This is just plain untrue. Bullshit to be precise.

    Have you ever talked to these young goose steppers? They want everything banned, the government to sort out every single problem and are the most conformist lock step arseholes God ever put breath in to. If it was cool to lop an inch of your genitalia they’d all be doing it.

  7. .

    The views of Myerson et. al., do not represent me.

  8. Lloyd

    God does not breathe into arseholes.

  9. Percy

    Being born in the 80′s myself, I feel I should take offence at some of the comments here. However, since I generally agree, I find I am unable to feel said offence. Carry on.

  10. Its an interesting question “What should we be fighting for?” Get what we can from the government or get them the hell off our back? I have to admit I am doing both.

    Lloyd: Love the comment “God does not breathe into arseholes.” Have to share it with my Pastor. I think he would like it too.

  11. Oh come on
    Being the worst educated generation The West has produced in 150 years probably doesn’t help either.

    Dumber but spending much longer at school attaining that level of dumb.

    Thanks Mum and Dad! This is all the fault of the boomers, those great deconstructionists.

  12. .

    If I can blame the ‘Me generation’, then god willing, then so be it, I shall.

  13. Oh come on

    Look you can’t blame the young’uns. They’re schooled in boomer values by boomers. Then they’ll be taxed to the hilt by boomer-led governments to support all those long, indulgent boomer retirements. I reckon that by the time the Gen-X/Y/Millenials come out the other end of that enormous liability, they won’t be especially keen on the architects of modern society or the principles that underpin it.

    I know a few people who were leftists when they were in their late teens/early twenties. They stopped being leftists not long after they graduated, found work and started having large chunks of their paypackets siphoned off for PAYE tax. Sometimes people need a jolt to knock them out of their complacency.

  14. Empire Strikes Back

    Have you ever talked to these young goose steppers? They want everything banned, the government to sort out every single problem and are the most conformist lock step arseholes God ever put breath in to. If it was cool to lop an inch of your genitalia they’d all be doing it.

    Erudite and tragically accurate.

  15. ralph

    Entrepreneurs need capital – Australians seem to prefer to invest in negative geared real estate. MacDonald’s already pays wages according to age – you get fired when eligible for adult rates. Spending – what is your point and how will it affect millenials? Debt – the millenials will inherit existing infrastructure paid by previous generations. Paternalist government – what is the democratic nd representative alternative? You only get to “vote” in a market economy with your money – millenials don’t have much of that.

  16. Empire Strikes Back

    Debt – the millenials will inherit existing infrastructure paid by previous generations.

    Julie says:

    The rapid increase in Australian public debt since the 2008‑09 ʻglobal financial crisis,ʼ largely to fund consumptive and redistributive spending, should be of great concern to Millennials.

    Which infrastructure Ralph?

  17. Julie Novak

    Infidel – responding to your earlier comment, I note that the piece I posted on my own blog conceived of young people, at the risk of generalisation, as being practising libertarians but rhetorical socialists. There is a difference, and a crucial one at that, I do think, but happy to hear any disagreements about it.

  18. Bruce

    Julie – I agree with your comments on policy but not the basis. The Millenials are just reacting logically to the loss of Judeo-Christian tradition which held sway in the sixties, plus the strong societal drive to postpone reproduction. If you only get married and have kids in your thirties it makes economic sense to stay with your parents until then.

    Back post WW2 the expectation was marriage and kids in your early twenties. If you do that you have to move out, since you can’t do family except in a separate residence. You have to get a job to support your family and pay the rent.

    The kids now don’t move out as they don’t have to. And if you are comfortable at home why would you work in a crap job when you could be on Facebook all day? And be looked after. So at best they will take part time possies to keep the parents sweet and pay them some nominal board and play WoW on their broadband plan.

    Do not think that people want to work. Some do. I don’t. It sucks. There is more in life than work. A large minority of millenials feel the same I suspect.

  19. Empire Strikes Back

    practising libertarians but rhetorical socialists

    These two characteristics are incongruent. We tend to actualise rhetoric. The socialist mind is an impediment to liberty experienced.

  20. Tel

    Five years after Wall Street crashed, America’s banker‑gamblers have only gotten richer…

    If they are all getting richer then they can’t be gamblers.

    I blame the education system, math teachers in particular. Not all math teachers, just the ones who fail to teach math and attempt to teach some strange moralizing bullshit instead.

  21. jumpnmcar

    Tel

    I blame the education system, math teachers in particular.

    Spot on
    Mathematics is the most important form of education in an ” improving persons ” life.
    And math teachers are not just found in schools.
    In fact parents and grandparents have far more opportunity to teach math than the piss weak Uni dickheads that the state and private institutions have.

  22. Andrew

    Did I imagine it, or did the article say about their landlords “You didn’t build that”?

    5 steps:
    1) Give me money
    2) Tax other people to give me money
    3) Give me money without doing something sucky that makes my boss richer – my wealth should be given to me independently of being able to generate economic return on my labour
    4) If there are socialist memes being circulated somewhere in Europe, I want those things
    5) None of the above apply to my landlord – nobody (including myself) should give him money.

    What could possibly go wrong? That’s pretty much the plan from Sarah Hyphen-Yuk and Co, except specially for us they added

    6) Let everyone else come here, and then repeat Steps 1-5. (They had no need for that in the US – they have an open border already.)

  23. disillusioned

    Don’t blame the Millennials. The rot started in the 60′s with the antiwar protestors and the union movement. The unions made inroads into the schools and then the universities to claim academia as a socialist bastion to broaden and dignify their power base. The downward spiral started there as can be plainly seen with the quality of imparted knowledge useful to life and employment giving way to the teaching of rights without responsibility, expectations that big government will provide (courtesy of Gough and the ALP) and a general loosening of moral values, which in itself was not a bad thing until it was exploited to change the moral fabric providing a cohesive society.

    The R/G/R government proved that those who do not learn from history are doomed to repeat it. I would argue that the fundamentals of the constitution and basic politics should be taught in schools as a lesson in civic responsibility but I would not trust the current education system to actually be capable of doing so without undue influence.

    Unless we can go back to a time when teachers / academics understand that they are but a source of knowledge rather than the essence of knowledge to be espoused by all there is little hope for western society.

  24. mitch

    I’m 24. Reading this, you’re basically right, we do feel the imperative of feeding at the public trough. Kind of makes sense, everyone else is, and we’re paying for it like everyone else. Young, single, childless people in full-time employment disproportionately so. But over the next 10 years, the ageing of the population is going to mean squeezing more out of the federal budget with a smaller tax base. Labor has already gutted defence; it’s inevitable the next big thing to go will be middle class welfare- particularly those aimed at getting young people to have children, and support us in going back to work despite those children. Also the higher education system, which we’re already seeing play out.

    At that point, as much as people like those at the Rolling Stone’s think they can get us to buy into funding their retirements and healthcare by selling us on the welfare state more broadly, it really is a what’s-in-it-for-me system, rather than social-capital building cohesive safety net they want to portray it as. And over the next 10 years, we’re simply not going to accept funding our parents generations’ retirements the way we currently support funding for our grandparents who will be loved and lost by then. I will certainly be supporting my parents in their old age, but the idea that I should do this twice, and then some for everyone else is wishful thinking. And by then, for the most part my generation will have mortgages and children and our own god forbid selfish priorities without giving the baby-boomers everything they’re used to getting under the current voting demographics.

    We are the libertarian generation. Socially tolerant now, fiscally conservative soon enough. The welfare system has sown it’s own self-destruction. It is inevitable.

  25. Lloyd

    It is inevitable

    I hope you’re right. But something tells me the culture of “gimme free stuff” will not die easily, short of some sort of national emergency such as a shooting war.

  26. mitch

    When I say socially tolerant, the IPA is in this country leading what I hope is a winning fight for genuine tolerance in this country. Discovered Andrew Breitbart recently and ended up watching Hating Breitbart on youtube, blew my mind. While I don’t agree with him on everything, really clarified for me just how tribal and vitriolic and uninformed the organised left is. There is a genuine culture war going on it seems, started by the left and largely being lead by the conservative right, and Andrew made a point that hit a nerve that libertarians need to put skin in the game and stop worrying about being associated with the relatively minor disagreements we have with conservatives.

  27. Adam d

    This is just plain untrue. Bullshit to be precise.

    Have you ever talked to these young goose steppers? They want everything banned, the government to sort out every single problem and are the most conformist lock step arseholes God ever put breath in to. If it was cool to lop an inch of your genitalia they’d all be doing it.

    I have to agree with IT, being a millennial myself I can’t really think of anyone I know who shares a similar worldview in my age group. The dumb ones don’t care either way, and the few they do care only for themselves. The smart ones are completely indoctrined from the schools and unis, and are clever enough to perform mental gymnastics to support their worldview.

    The positive side is that some are starting to turn as they get older and the bs starts to really hit their hip pocket.

  28. JakartaJaap

    I see there’s a certain amount of boomer bashing going on. When I was in primary school in 1965 (b. Dec 53) I was described as being on the cusp of the boom, along with the rest of the class. Now by some measures boomers include people born in 1965. The differences in life styles and circumstances between people born in Australia in say ’45/6,’55 and ’65 are so great as to be almost unimaginable these days, particularly for ‘the Millenials’. Please specify which cohort of ‘boomers’ you are bashing before administering bile.

  29. james

    I am of this cursed generation.

    While some of my peers mouth libertarian style ideas in regards to drugs and government peeping toms they also believe that corporations are evil and that it is the job of the government to fix all societies problems.

    Not really our fault for the most part. When previous generations allowed the left to take over all levels of the education system from kindergarten to post graduate what did you think was going to happen?

  30. Tel

    I hope you’re right. But something tells me the culture of “gimme free stuff” will not die easily, short of some sort of national emergency such as a shooting war.

    We have been through that a number of times already. The Free Stuff Army recruits easily and rebuilds quickly. Hucksters quickly learn to tell people what they want to hear. You can’t kill them with guns.

    Teaching math is the answer. The whole of accounting is nothing more than applied use of addition. The only difficult thing about accounting is implementing safeguards against the various ways that people will use to fool themselves and others into believing stuff appears from nowhere.

  31. Zatara

    “Itʼs a new year, but one thing hasn’t changed: ……… tens of millions of Americans remain unemployed – and the new jobs being created are largely low‑wage, sub‑contracted, part‑time grunt work.”

    Funny, that’s EXACTLY what we told them would happen if Obamacare was implemented but I can’t seem to find any mention of that in the article. Obamacare impacts over 1/6th of the US economy folks. The author acting surprised, outraged, and ignorant is no surprise to me considering who he writes write for.

    “Over the weekend, Jesse Myerson, a twenty-something former Occupy organizer, finally stumbled upon a foolproof recipe for success for today’s struggling Millennials. The recipe? Communism, naturally.

    Myerson, whose Twitter bio includes the hashtag #FULLCOMMUNISM (for when fractional communism just can’t murder people quickly enough), listed five economic reforms that he thinks every Millennial should demand: Guaranteed jobs, guaranteed income, no more private real estate, no more private assets at all, and a public bank in every state (a great place to store all those financial assets you no longer own). If that sounds eerily similar to a Yoko Ono-infused brainstorming session by John Lennon, it’s because it is eerily similar to a Yoko Ono-infused brainstorming session by John Lennon.”

    Sorry, Comrade, But You Didn’t Just Discover The Secret To Making Communism Work

  32. rickw

    “Have you ever talked to these young goose steppers? They want everything banned, the government to sort out every single problem and are the most conformist lock step arseholes God ever put breath in to. If it was cool to lop an inch of your genitalia they’d all be doing it.”

    I had a visit from one of these little Nazi’s trying to sell me carbon offset electricity. I declined and said that I believed that global warming was BS. After hearing this the little turd had a foaming at the mouth neural meltdown. I then suggested that he needed to work on his salesmanship and that he should immediately leave my property, he then stormed off down the street screaming abuse.

    I stood on the doorstep for a while stunned and contemplating what had happened, I concluded that it was probably about as close as I was ever going to get to a visit from the Hitler Youth.

  33. .

    Rick

    You may have done that poor young fellow quite a favour. A big reality check.

  34. Lloyd

    Tel, no one said kill em with guns.
    The way I see it, the free stuff thing is essentially a cultural problem. The solution is cultural change but because people are generally very resistant to change especially that which is likely to hurt them economically, something needs to act as a catalyst for change to occur. The catalyst doesn’t have to be a shooting war but wars do tend to focus national attention.

  35. Jannie

    I do see a glimmer of concern in my sons’ eyes when I discuss the debt that is buidling, and that it represents consumption now which must be paid by a future generation. But for kids in their early 20s, the future is too far away to really matter – the notion of buying Superannuation now for 35 years time is a non starter.

    They have been so indoctrinated its scary. I really regret sending them to Uni, which has taught them strong opinions but poor research and investigation skills. They are so computer centric that their handwriting resembles mine when I was 10. It seems to me they lack independence and the ability to think and act outside the groupthink. They seem to think banning stuff is fair, and are more than happy to blame everything on the skeptical olds, who they very quietly consider to be “losers”.

    I also blame their mother who taught them that its OK to give up before you get to the end, that somebody else will clean up after you, and that Mum will buy you stuff that you fail to win for yourself (dont tell Dad). My boys are total postmodernists failures in almost every respect, except they are very sociable and good company. It amazes me that friends and strangers always describe my kids as really pleasant people and fun to be with. They will have wonderful lives so long as somebody else pays for them. Now mother and sons are discovering that the girls these days don’t go for Mummies Boys, seem to prefer loners with a bit of mongrel and money.

  36. Combine Dave

    Now mother and sons are discovering that the girls these days don’t go for Mummies Boys, seem to prefer loners with a bit of mongrel and money.

    Worked for me ;)

  37. Empire Strikes Back

    Please specify which cohort of ‘boomers’ you are bashing before administering bile.

    Obviously it’s a stereotype for illustrative purposes only JJ. Don’t get your knickers in a knot.

    The problem Boomers are those who procreated and raised their children as perpetually dependent sociopaths. I bear no grudge for the other 10%, to which you no doubt belong ;)

  38. ralph

    Empire strikes back – infrastructure being physical assets primarily – provided to successive generations. I note that the £10 million cost of the Sydney Harbour Bridge was seen by some at the time as an onerous burden.

  39. Larry

    72% of 15 to 34 year olds own their own home? did I mis read?
    Otherwise I love the article.
    Most of the lack of financial opportunity we now face can be traced back to the government removing it.
    Young people are being dudded by: state help which removes incentive, attacks on employers as though they are the enemy, the huge costs of over the top housing industry and planning regulations, universal insurance schemes which lead to spiralling costs unchecked by the market and the dead weight of a government grown way beyond it’s usefulness. And all the other things of course.
    I agree many young people are libertarian by nature but they have been fed leftist economic propaganda all their lives.
    As Ayn Rand superbly demonstrates in ‘Atlas Shrugged’, when policies of the left fail, the left’s answer is always an escalation of the failed policies. Thus we have the contribution of Jesse Myerson.
    Good article Julie, get the word out.

  40. .

    Larry – well done.

    You need to speak out more often.

    I would recommend you join the IPA and LDP.

    A voice like yours in our legislatures would do us all good.

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