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New Census Bureau data on young adults provide insights into demographic changes and forces of creative destruction
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Table 1. Characteristics of Young Adults Ages 18-34, 1980 vs. 2009-2013
|Percent of total population||29.6%||23.3%|
|Speak language other than English at home||10.9%||24.6%|
|Bachelor’s degree or more||15.7%||22.3%|
|Live with a Parent||22.9%||30.3%|
|Income Below Poverty Line||14.1%||19.7%|
|Median Income (2013 dollars)||$35,845||$33,883|
Table 2. Top 20 US Metro Areas (pop. > 400,000) Ranked by Highest Median Income (2013 dollars) for Young Adults Ages 18-34, 1980 vs. 2009-2013
|Rank||Metro Area||Median income, full time workers, 1980||Metro Area||Median income, full time workers, 2009-2013|
|1||Flint, MI||$50,208||San Jose, CA||$51,149|
|2||Detroit, MI||$47,460||San Francisco, CA||$47,426|
|3||Chicago, IL||$43,480||Washington, DC||$47,380|
|4||San Jose, CA||$43,229||Boston, MA||$44,548|
|5||Houston, TX||$43,028||Bridgeport-Stamford-Norwlk CT||$42,757|
|6||San Francisco, CA||$42,047||Hartford, CT||$42,322|
|7||Milwaukee, WI||$41,987||New York-Newark, NY-NJ||$42,108|
|8||Seattle, WA||$41,712||Baltimore, MD||$41,807|
|9||Portland, OR||$40,941||Seattle, WA||$41,167|
|10||Rochester, NY||$40,869||Minneapolis-St. Paul MN||$39,963|
|11||Washington, DC||$40,746||New Haven, CT||$39,794|
|12||Youngstown, OH||$40,738||Philadelphia, PA||$39,413|
|13||Cleveland, OH||$40,732||Worcester, MA||$39,115|
|14||Minneapolis-St. Paul, MN||$40,528||Chicago, IL||$38,415|
|15||Pittsburgh, PA||$40,253||Denver, CO||$37,958|
|16||Bridgeport-Stamford-Norwalk CT||$39,900||Des Moines, IA||$37,456|
|17||Toledo, OH||$39,766||Sacramento, CA||$37,397|
|18||Denver, CO||$39,664||Albany-Schenectady-Troy NY||$37,249|
|19||Grand Rapids, MI||$39,413||Raleigh, NC||$36,811|
|20||Cincinnati, OH||$38,997||Springfield, MA||$36,464|
Derek Thompson provided some fascinating income data for young Americans by metro areas in his recent article in The Atlantic titled “The Richest Cities for Young People: 1980 vs. Today.” The income data are from a new Census Bureau study released in December that show how “young adults today compare with previous generations in neighborhoods nationwide.” The study “Young Adults: Then and Now” is based on 1980, 1990 and 2000 Censuses and the 2009-2013 American Community Survey, and includes an interactive data tool with estimates of 40 demographic variables at the national, state, metropolitan, county and neighborhood levels.
A comparison of some demographic characteristics of today’s millennial generation to young Americans ages 18-34 in 1980 is displayed above in Table 1. Specifically, the Census Bureau study finds that compared to 1980: a) young adults today represent a smaller share of the total population (23.3% today vs. 29.6%), b) the share of young adults who are foreign born has more than doubled (15% vs. 6%), as has the share who speak a language other than English at home (24.6% vs. less than 11%), c) young adults today are more likely to have a bachelor’s degree or higher (22.3% vs. 15.7%), twice as likely to be a minority (42.8% vs. 21.6%), more likely to have never married (66% vs. 41.5%), more likely to live with a parent (30.3% vs. 23%), and more likely to have income below the poverty line (19.7% vs. 14.1%), d) young adults today are less likely to live alone (7.1% vs. 7.5%), less likely to be a military veteran (2.4% vs. 9.4%), and less likely to be employed (65% vs. 69.3%). Young adults today have a lower median income of $33,883 compared to the median income of $35,845 for that group in 1980 (in constant 2013 dollars).
The bottom chart above (Table 2) displays an interesting comparison of the top 20 metro areas (wotj populations above 400,000) ranked by median annual earnings (in 2013 dollars) for full-time workers ages 18-34 in 1980 and 2009-2013. Some observations:
1. In 1980, three Michigan cities (Flint, Detroit and Grand Rapids) ranked among the top 20 US metro areas for the highest median incomes for young adults, and Flint and Detroit were ranked No. 1 and No. 2. In 1980, young people working full-time in Flint and Detroit, thanks to an 80% market share for the Big 3 and the above-market wages of the UAW, had higher median annual incomes than their counterparts in all other major US cities including Chicago, San Francisco, Washington DC, Los Angeles (No. 36) , Boston (No. 35), Dallas (No. 45), and New York City (No. 23). When cities smaller than 400,000 in population are considered, many more Michigan cities made it into the top, highest-income cities for young Americans in 1980: Midland ($49,000), Saginaw ($47,000), Monroe ($46,500), Ann Arbor ($44,500) and Bay City ($44,000), all with median incomes for young Americans higher than No. 3 ranked Chicago ($43,480) for large cities.
2. Interestingly, the high income levels for young Americans in most Michigan cities in 1980 didn’t reflect a wage premium for education, since the shares of the young adult population ages 18 to 34 with college degrees in most Michigan cities were significantly below the 16% national average, e.g. 9.7% in Flint, 10.2% in Saginaw, 13.4% in Detroit, 8.6% in Bay City, and 8.1% in Monroe. Given its relatively low cost of living compared to other areas of the country, along with income levels that were about one-third above the national median of $35,845 in 1980, Michigan was probably one of the best states in the country for young people back then. You didn’t even need a college degree in those days, you could graduate from high school in the Flint-Detroit-Saginaw areas and go to work in the auto industry, and earn almost $15,000 above the median annual income for young adults back then. Not a bad deal, except that it was unsustainable because the UAW wages had gotten negotiated over the years levels far above realistic, market levels. Once the Big Three and the UAW faced competition from foreign automakers like Toyota and Honda, the market share of GM, Ford and Chrysler fell by almost half to below 44% in 2009 before recovering slightly in more recent years.
3. From its No. 1 rank in 1980, Flint’s median income for young adults fell to the rank of No. 428 in 2009-2013, out of 929 US metro areas of all sizes, with median annual income of $30,732 – a drop of almost 39% in real dollars in just a generation. Likewise, for large metro areas, Detroit slipped to No. 40 in 2009-2013 with median income of only $34,756, a decrease of almost 27% from its 1980 median income of $47,460.
4. Not surprisingly, more than half (11) of the top 20 metro areas with the highest median incomes for Americans ages 18-34 in 1980 were in Midwest or Rust Belt states (Flint, Detroit, Chicago, Milwaukee, Youngstown, Cleveland, Minneapolis-St. Paul, Pittsburgh, Toledo, Grand Rapids and Cincinnati). By 2009-2013, only three of the top 20 metro areas by income for young Americans were in Midwest or Rust Belt states: Minneapolis-St. Paul, Chicago and Des Moines (and none of those cities have a strong manufacturing base), and almost all of the top 20 metros by income for young Americans were in East Coast or West Coast states (San Jose, San Francisco, Washington, DC, Boston, New York, Philadelphia, Baltimore, Seattle, etc.).
5. In 1980, 1990 and 2000, Williston, North Dakota wasn’t even included in the Census Bureau list of US metro areas. But by 2009-2013 Williston ranked as the sixth highest-income city in the US (for cities of all sizes) for young adults with median income of $46,081, just slightly behind Washington, DC at $47,380, San Francisco ($47,426) and San Jose ($51,149). The median income for the millennial generation working in Williston is higher than the median incomes in Boston ($44,548), New York City ($42,108)and Seattle ($41,167). It’s another amazing sign of shale prosperity that young Americans today are earning incomes in Williston, North Dakota, in the epicenter of the Bakken Oil fields, that are comparable to the median incomes of their counterparts in Washington, DC and San Francisco.
Bottom Line: The new Census data provide a striking look at how today’s young adults are different on many important demographic characteristics compared to their counterparts in 1980. We can also see from the Census study how the geographic center of gravity in the US for the highest-paying jobs for young Americans has dramatically shifted over the last several generations, from cities in the Midwest and Rust Belt states to the West Coast (Silicon Valley and Seattle) and East Coast (Boston, Washington, New York, Baltimore). That shift reflects the never-ending gales of Schumpeterian creative destruction that characterize a market economy and result in some industries and geographical regions emerging as economic centers of entrepreneurship, innovation, growth, investment, employment opportunities for young people, and rising income levels, only to eventually have those forces of economic change shift and move away to other industries and other geographical regions, leaving reduced opportunities and lower levels of incomes in the once-prosperous cities.
While Flint and Detroit and other cities in Michigan once provided incomes for young working adults that were the highest in the country in 1980, those high-paying jobs have gradually faded and income levels are now below-average for most young people in Michigan. For the millennial generation, the high income jobs have shifted away from Michigan to the coasts and cities like San Jose, San Francisco, Boston and New York; and to unlikely places like Williston, North Dakota in the heart of the shale-rich Bakken Oil fields. What geographical areas and industries will provide the highest-income opportunities for the future generations of young Americans, and how will those young Americans be different from today’s millennial generation? It’s hard to tell, but it’s likely we’ll see a demographic and economic/geographic shift over the next 30 years that will be as dramatic as the shift and changes that took place between 1980 and 2010.
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MP: There’s a good reason that even the most zealous environmentalists can only “break up with fossil fuels” for an hour each year during “Earth Hour,” which is coming up next month on March 28 at 8:30 p.m. In contrast, we celebrate “Fossil Fuel Hour” every hour of the day, 365 days per year as we light, power, fuel and heat our homes, computers, appliances, vehicles, airplanes, etc. with energy from fossil fuels. Thanks petropreneurs, Big Oil and frackers for bringing us low cost and reliable energy from natural gas, oil and coal!
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Gotham Air officially launches today in New York City, with the website and mobile site open for bookings starting this afternoon. The app, an exact mirror of the mobile site, launches on Android and iOS in the coming days, though the first 2,500 people who signed up for the beta release should see an invite to download sometime today. As for the service itself, the main draw is price: a typical flight is $219 per person (far less than the cost of chartering an entire helicopter yourself, which can easily hit upwards of $1,000), with some $99 introductory fares available on certain days and times.
Watch video above to see a Gotham Air helicopter ride from downtown Manhattan to JFK airport and back, each way takes only six minutes!
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Happy Birthday Ronald Reagan, first US president to visit NYSE and who believed in the ‘miracle of the marketplace’ more than any president
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Yesterday was President Ronald Reagan’s birthday, he was born on February 6 in 1911. Amazingly, in the entire history of the United States, there have only been two sitting US presidents who have visited the New York Stock Exchange (NYSE) while in office: Ronald Reagan in 1985 and George W. Bush in 2007. After his presidency, Reagan visited the NYSE again in 1992 with Mikhail Gorbachev to mark the exchange’s bicentennial.
Shortly after his death on June 5, 2004, the New York Stock Exchange put this tribute to the 40th president of the United States on its website:
On March 28, 1985, President Ronald Reagan made his first of two visits to the NYSE to salute the robust American expansion, as well as the central role of the New York Stock Exchange as the nerve center of entrepreneurial capitalism (see photo above). President Reagan was the first sitting U.S. president to visit the NYSE.
At 9:53 a.m. that morning, President Reagan—amid a roaring ovation—addressed the Exchange community from the bell podium. Flanked by his chief of staff, Donald T. Regan and NYSE chairman and CEO John J. Phelan, Jr., President Reagan proclaimed: “We’re bullish on the American Economy. The American Economy is like a race horse that’s begun to gallop in front of the field.” Aiming to drive “the bears back into hibernation,” he said, “that’s our economic program for the next four years—we’re going to turn the bull loose.”
Throughout his presidency, the President continued to champion the principles and power of free people competing in free markets. During the first year of his Administration, in September 1981, Reagan communicated his core beliefs to members of the IMF and the World Bank when he stated:
“We who live in free market societies believe that growth, prosperity and, ultimately, human fulfillment are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefiting from their success – only then can societies remain alive, dynamic, prosperous, progressive and free.
“Trust the people. This is the one irrefutable lesson of the entire post-war period, contradicting the notion that rigid government controls are essential to economic development. The societies that have achieved the most spectacular, broad-based progress are neither the most tightly controlled, nor the biggest in size, nor the wealthiest in natural resources. No, what unites them all is their willingness to believe in the magic of the marketplace.”
Comment: In contrast to Reagan, I think it’s safe to say that our current president does not trust the people nor does he believe in the magic of the marketplace. Rather, he believes firmly that rigid government controls are essential to his economic vision. Probably also pretty safe to predict that President Obama will not be making any visits to the NYSE before he leaves office. No, he’ll avoid the “nerve center of entrepreneurial capitalism,” just like he’s avoided visiting the areas that are home to the most remarkable energy and economic success stories in US history. Those stories of success that have emerged starting at the beginning of his presidency — the “petropreneurial nerve centers” of the Great American Energy Boom that are located in the Bakken oil fields of North Dakota and the Permian Basin and Eagle Ford Shale oil fields of Texas.
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Thomas Sowell lists 28 of his favorite quotations on his website, and these are three of my favorites from his list:
1. “Half the harm that is done in this world is due to people who want to feel important. They don’t mean to do harm– but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.” ~T.S. Eliot
2. “Everybody has asked the question. . .’What shall we do with the Negro?’ I have had but one answer from the beginning. Do nothing with us! Your doing with us has already played the mischief with us. Do nothing with us! If the apples will not remain on the tree of their own strength, if they are wormeaten at the core, if they are early ripe and disposed to fall, let them fall! I am not for tying or fastening them on the tree in any way, except by nature’s plan, and if they will not stay there, let them fall. And if the Negro cannot stand on his own legs, let him fall also. All I ask is, give him a chance to stand on his own legs! Let him alone!” ~Frederick Douglass
3. “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” ~C. S. Lewis