I’m an economist, and do more than think about the industrial organization (IO: “structure, strategy, conduct and performance”) of the auto industry. Here I present overall employment data and then focus on the automotive component. For a recent item on inflation and interest rates see here at my blogspot blog, Autos and Economics.
$150 a week.
For some folks, this is a mere pittance. A lunch for four at a fancy restaurant that can be easily charged off to Uncle Sam and his seventeen trillion dollar debit card.
For others, it’s the beginning of a barnacle that will likely outlast their ability to pay it.
They will flex their muscles and run while they can. Then once they trip, due to a lost job or a family emergency, they will pick up an even heavier barnacle, with four wheels on it, and keep running.
It’s a vicious cycle of poverty. Where the poor always stay poor. After witnessing this cycle of automotive indebtitude for years on end, I’ve come to blame one solitary thing.
A study by Edmunds on the buying habits of millennials shows that 2013 was not a particularly good year for young car buyers. Despite making good headway in 2012, 2013 saw those gains practically eroded, as a weak job market and rising home prices helped stymie any growth in market share for automotive consumers aged 18-34.
“Too Poor To Drive”. This is the gut level conclusion that’s been propagated in “Generation Why” since January, 2012, long before the theory gained currency in the broader automotive world. In the nearly two years since, the “kids aren’t interested in cars because of technology/the environment/urbanization” meme has held up tenaciously – and it’s not entirely false.
In 1991, I came back from Operation Desert Storm with a pocketful of money from the several months I had spent aboard an oil tanker as a part of the USS John F Kennedy battle group in the Red Sea. Like many young men flush with cash I was determined to shoot the works as fast as possible and so before my jet lag had even abated I took my nest egg on a tour of the local low-end car lots in search of some real old-fashioned Detroit muscle. It didn’t take me long to find something I liked, a well used 1969 Camaro with small block and a four speed, and I was ready to deal but the price on the windshield, $3200, stopped me cold. It was outrageous! (Read More…)
Peugeot is deepening job cuts at its French factories, with another 1,500 positions set to be made redundant as part of a massive cost-cutting effort. Meanwhile, rival automaker Renault is expanding its operations in Morocco as its Dacia brand continues to steamroll through the European market.
This episode of Generation Why is brought to you by some numbers, not essays on product or marketing efforts. The chart above shows the mean earnings of college graduates with a Bachelor’s degree and full-time employment ages 25-34.