Top Themes of 2006 – Cost of Living

I’m thinking back on the fascinating year that was 2006, and how much of it is leading toward renewed interest in the future. It seems to me that this was the year when people got over the slump of 2001 and 2002, and recognized that even if the future isn’t rosy, we still have to face it. In short, it’s a fantastic time to be a futurist.

So for the next few posts, I will cover the major trends that are getting ready to shape the world.

This first one is really a message from my generation (Gen X) to our elders
. I have just have one thing to say:

It is not sustainable for housing prices, education, and healthcare costs to outpace wages for decades on end. The result is eating your young.

What do I mean by this? 

It is not reasonable for young people to take on tens or hundreds of thousands of dollars in debt in college, only to face astronomical rents in the economic centers, the prospect of an additional $50,000 of graduate school debt, double digit increases in healthcare premiums, and then the idea of a FIRST home that costs $400,000.

Yes, yes, there is the tired wheel of "you’re all just starting out," or worse yet, "you and your iPods…you want everything."  For young people, the current cost structure of living seems like a completely unwinnable game. In the end,  wages have not risen along with the cost of living.

For those of you nearing retirement, you may be thinking, but my house appreciated in value – it’s a strong economy! Just bear in mind that with the Baby Boomer retirement, healthcare costs are expected to double to nearly $4 trillion a year. In other words, the structural cost of society is expected to bear further down on my generation just as we come into the (ostensibly) highest earning years of our life.

There are some games that are not designed to be won. In 2006, I think the most prominent topic of discussion was real estate prices for Gen X. I would have preferred discussing biotechnology, or the future of jazz, or politics, but instead it seems my generation focused on "Can you believe how much they want for a one bedroom apartment on the East Coast???" or "I hear if you move to North Dakota, you can get a beautiful four bedroom place for $800 a month…how are the winters there?"

Remember, the generation that fought World War II and sent men to the moon did so very often with only one parent working per family. Not only that, they raised many more children on average. In the intervening years, we’ve made the two-income family practically mandatory, increased the number of degrees you need for top jobs, maxxed out our credit cards, and moved two hours into the suburbs to make housing dollars go further.

This cannot continue in definitely. There are limits, both in terms of microeconomics and macroeconomics. And Generation X are the ones who perceive a markedly different future.

This topic will develop considerably in 2007.

-Garland