Why Young Americans Feel Stuck in Today’s Economy — ft. Ed Elson & Kyla Scanlon

This episode wraps up Prof G on Economics, a two-part Office Hours series on the forces shaping the economy and your financial life. Ed Elson and Kyla Scanlon discuss how the American Dream is shifting for younger generations, why common economic signals can be misleading, and how to tell the difference between real economic health and financial strain — plus how they make sense of the noise in today’s media landscape. Want to be featured in a future episode? Send a voice recording to [email protected], or drop your question in the r/ScottGalloway subreddit. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 1:16Ed Elson?

  Welcome to the second and final episode of Prof G on Economics, a special series focused on the forces shaping the economy and your financial life. I'm Ed Elson, co-host of Prof G Markets. I'm joined again by Kyla Scanlon, economic commentator and author of In This Economy: How Money and Markets Really Work. Together, we will be answering your questions on the economy and what it means for your money. And if you'd like to submit a question for next time, you can send a voice recording to [email protected] or post your question on the Scott Galloway subreddit. Kyla, thank you for joining us.

• 1:52Kyla Scanlon?

  Thank you.

• 1:52Ed Elson?

  Are you ready to get into this?

• 1:54Kyla Scanlon?

  Yes.

• 1:58Ed Elson?

  Our first question comes from Spencer Combs on Instagram. They say, quote, "It seems like a growing number of millennials priced out of home ownership and delaying kids are redefining traditional spending patterns. Rather than channeling money into homes and early family life, they are allocating more toward experiences, pets, and accessible luxuries. These categories may increasingly replace those older economic anchors. How do you see this generational reallocation of spending influencing the economy overall? And what opportunities could emerge as a result? Kyla, what say you to Spencer Combs?

• 2:37Kyla Scanlon?

  I think it's an interesting question, and it actually becomes an American dream question. So there's something called aspirational displacement, where people who can't afford to buy a house, which is that traditional path of the American dream, they start buying experiences, they start spending on their pets because they have additional income, but they can't, you know, make a huge purchase like a house. And so it's an interesting thing that we're seeing in the economy. And on the previous episode, I talked about Baum's Cost Disease and how goods were getting cheaper and cheaper because we've gotten better and better at producing them. Services have taken a longer time to get cheaper because it's much harder to make services more productive.

• 3:21Kyla Scanlon?

  It's very easy to automate a car factory, much harder to automate a physician. And so I think that's also part of it, is that it's much cheaper to access these accessible luxuries. We also have international trade, which has informed a lot of the access to these luxuries, oftentimes which come from abroad. And then the experiences part is a lot of travel, too. And so the average American travels a whole lot more than they used to. And so these are interesting indicators of economic health. So a lot of people have a sense of financial nihilism because they might not necessarily be on the right, the path that they want to be with the American dream, but they can afford these things.

• 4:03Kyla Scanlon?

  And so it does create a weird discrepancy in the economy where we see strong retail sales, but we see consumer sentiment so low. And in terms of how it's changing the economy, you see companies catering to it a lot more. Like, there is a whole airline that caters just to dogs. I think it's called Bark. Have you seen this? Have you seen that? You can fly your dog on the Bark plane. Yeah. No, I'm serious.

• 4:31Ed Elson?

  Oh, God.

• 4:32Kyla Scanlon?

  Yeah. It's, um, it's something that happened.

• 4:34Ed Elson?

  Did not know that.

• 4:35Kyla Scanlon?

  It's, it's something that happens in higher income countries is, you know, more and more so they'll spend on these sorts of things. It's the same pattern that we saw in Japan as well, um, South Korea too. So, yeah, it makes a lot of sense and there's going to be a lot of luxury brands that are able to capture that, a lot of dog airplanes that are able to capture that. And it does represent a strange amount of economic health.

• 5:02Ed Elson?

  I think the thing that's so depressing to me about it is it's like, we don't have enough money to buy houses, but we do have enough money to buy flights for our pets. And that's such a weird, like, in-between stage, which is almost, I don't know if it's, it's worse than, than not having the money to, to buy the, the, the dog flights, but it's, it's definitely got like a very depressing irony to it that, that concerns me. And it reminds me of also like the little treat culture, um, which is this, this whole thing where it's like, you, you don't think that you can buy a house or get anywhere because everything's way too expensive.

• 5:46Ed Elson?

  So instead of like saving up for these meaningful purchases, you instead just like spend all of your disposable income on what people are calling like little treats. So like, maybe the dog flight would be one of them, or like, um, you know, clothes or Labubus or like expensive coffee, like whatever it is. Maybe you'd put sports betting in that category too, um, which is. Really concerning to me at least, because it just makes me think that this generation has kind of given up and has decided that they're not, they're not going to get out. So why even try?

• 6:26Ed Elson?

  And to the, the dog flights, I've got to look this up, bark, it's crazy. So I have some data in front of me to, to the, the pet point about how much young people are spending on their pets. So I guess this really aligns with what you've just said. So the average American across all age groups spends, if you have a pet, spends $4,400 per year on their pets. For Gen Z, the number is over $6,000. So young people are spending 40% more than the average pet owner. But here is where it gets worse.

• 7:06Ed Elson?

  A third of those Gen Z pet owners say they have gone into debt because of their pets. So we're literally levering up to put our dogs on flights and get them fancy dog collars and maybe get them fancy dog treats. And meanwhile, the cost of housing is six times our income and we're doing nothing, it seems, to figure out how to save for that event. And, and you can't really blame us because of the environment, the financial environment we're in. And I think it's also goes to the stuff that we're seeing with like family planning where young people just don't really want to have kids anymore. It seems like they're more interested in, interested in having like a dog or a cat

• 7:51Ed Elson?

  or a pet because it's just less expensive. So I don't know what the, I mean, the question is like, what opportunities arise? I, I'm not seeing much positive in any of that, but I think that it is a really good question that highlights something that probably deserves more airtime in the young people conversation. And after this, I will be. Checking out that airline.

• 8:18Kyla Scanlon?

  Looking your dog on the airline? Well, it's it does create, I think, oh, yeah, I mean, it creates a distorted lens on on the economy because like, some people would be like, hey, you know, they're buying their dog's airline tickets, you know, things have to be somewhat okay. So it is seen as.

• 8:36Ed Elson?

  They're fine.

• 8:36Kyla Scanlon?

  Yeah, seen as like, and they do have the money to do it, like, it's some, well, they're taking out debt, but it's some element of economic health. And then it's just a shift in priorities, too. And, you know, we often talk about this, like, fabled American dream. It's something I write a lot about because I think it's really interesting, like, what does a society subscribe to as a path? And I think right now that path is evolving because of the economic constraints. You know, houses are just a lot harder to come by, and so it's harder to do family formation and to stay in one place even. And it's just a different, it's just a different world. And I think that's hard because for the past forty years with this great moderation,

• 9:19Kyla Scanlon?

  where things, the growth of suburbia, the growth of white collar jobs, it seems like everything would stay stable forever. And that's just not, this is just not how the world works, apparently.

• 9:30Ed Elson?

  So I'm looking at our second question, and it kind of relates to what we just discussed. This comes from Instagram user Alan Davidson. Alan asks, quote, "What's the most misunderstood economic indicator when it comes to whether younger generations are actually gaining ground?" And this is interesting because it's, I mean, it really relates to what we just talked about, where if young people are out buying avocado toast and lattes, I feel like boomers immediately go, "Well, you can buy avocado toast, so you're fine, everyone's fine." The first thing that comes to mind for me is like, whatever avocado toast sales are, that would be a misleading economic indicator of what's really going on.

• 10:11Ed Elson?

  But the one that bugs me right now is this interest that people have, and it's true, that more young people than ever before are investing in the stock market. Like, it's something like half of us today, half of Gen Z, which is a record high. And then also, like, young people today are investing way earlier than other generations did. So it's like, okay, you guys have some money and you're interested in stocks, therefore you're good, like, you're in good shape. And for me, this frustrates me because I feel like it ignores two really crucial things, one of which is how much are we actually investing?

• 10:55Ed Elson?

  And the answer is it's really not a lot at all. Like, if you look at Robin Hood as an example, which is where most young people are trading, the average account balance is less than $250, which is tiny. So sure, we're investing, but we're not investing in a way that's meaningful, most of us, or at least on average. And then the second for me is like, what are we actually investing in? And for most young people, it's very heavy on the crypto and the meme stocks. And there was this Bank of America study, survey, they found that the average young person has 30% of their portfolio in crypto.

• 11:38Ed Elson?

  That, to me, is, that's not healthy. That's not a symbol or a signal that young people are doing well. That's a signal that they're getting a little desperate and they're yoloing into things where they might see perhaps a glimmer of outstanding returns. But the phrase, young people are investing more than ever in the stock market, like, it makes you think that we're set. And I feel like there are a lot of other indicators which we could get into, which I feel like are more symbolic of what's really going on, and that is, we're not set.

• 12:12Kyla Scanlon?

  No, I think that's true. And the economic indicator that I brought to the table is a bit similar, where people talk about how much young people are sports betting, you know, 31% of 18 to 34-year-olds have an account with sports betting, as you were talking about. 32% of them bet three or more times a week. A 30% has bet more than 500 in a single day. But when you ask them if they want this, people say no. A Pew Research poll found that Over forty percent of people aged eighteen to twenty-nine think that legalized sports betting is is bad. It's up sharply from thirty-four percent in twenty twenty-two. By the way,

• 12:55Kyla Scanlon?

  that's that matters, that change. And so I think that's another thing that ties into what you're saying, is it seems like everybody wants to be betting, everyone, even though it's not that many, it seems like a lot of people, but everybody wants to be betting, everybody wants to be a part of this like casino economy. But when we look at the data, that's just not true. Like, they are, that that ties into the first question pretty well, where people are doing this because of aspirational displacement, they're doing this because they're trying to find some way out, and because it's accessible. I think also prior generations might have tapped into this stuff a little bit. But I don't

• 13:37Kyla Scanlon?

  know. So I think that's, I think, one of the most misunderstood things is that people don't want what's happening right now with elements of the casino economy.

• 13:48Ed Elson?

  Yeah, that's a great point. It's like, same with any other addiction. Like, you know, you could be addicted to alcohol, you could be addicted to opiates, and then you can also probably think, these things are terrible, and I wish they had never entered into my life. I feel like the data that you're you're producing there is like, that's exactly the story that it's that it's telling. It's like, we're addicted to this stuff, we know it's not good for us, but we keep doing it, because that is the nature of addictions, which, again, is is really concerning to me.

• 14:23Ed Elson?

  Okay, we will be right back after a quick break.

• 14:32Scott Galloway?

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• 17:55Ed Elson?

  Let's move on to our final question. This is from Matt MC 121. Matt says, Kyla and Ed, you're both great at connecting the dots of everything that's happening in the world in a nuanced and unique way. Thank you. That's very kind. With so much noise in today's media, how do you navigate through it? What is your process for arriving at a point where you can give a new perspective? That's a great question. Kyla, what do you think?

• 18:25Kyla Scanlon?

  Oh, man, um, there's a lot going on. And so what I do every morning is I check all of the major outlets. So Bloomberg, Wall Street Journal, Financial Times, to try and get a sense of what has happened overnight. And then I keep a running Word doc, a Google doc throughout the week, where I take notes on various themes that I think are popping up. So if I see a lot of research coming out about gambling or if I see a lot of articles written about gambling, I'll add that to my Google doc. So I try to compartmentalize and create themes for all of the things that I'm seeing because then it's easier to connect the dots.

• 19:08Kyla Scanlon?

  Everything is connected in this sort of world. And so that's what I try to do is make sense of it through writing it all down. But that takes a tremendous amount of time. So what I try to do with like arriving to a new perspective is say, okay, what did I learn this week? Like, how can I help explain all this stuff that's happening? And then relay it to somebody who's just trying to understand and they have three minutes every day to understand what's going on around them. So it's, it's, um, it's, uh, there's a lot, there's a lot going on.

• 19:44Ed Elson?

  I feel like the other thing that you nail, which it probably helps with understanding things is just like, how would I explain, as you say, how would I explain this in three minutes to someone who has zero context? And I feel like that's a really good way to understand the issues deeply. I mean, this is what people say, if you want to learn, teach, which I feel like is kind of what you do. And that's probably a really, I mean, I feel like people could take that in their own lives. For me, same as Kyla, I try to read everything. So read all the papers, try to understand both sides of the argument if possible. That is always going to be helpful.

• 20:28Ed Elson?

  I think another point that I would say that I think has really helped me is the fact that my job is to say stuff. And it's not just to read stuff. It's like I, I literally have to, by the nature of this job, I literally have to have a viewpoint. And I have to articulate that viewpoint out loud, which by its very nature forces me to be a smarter person. Like tomorrow, as an example, I, I'm going to be on MSNBC. I have no idea right now what we're going to talk about. They'll tell me in the morning.

• 21:09Ed Elson?

  And then by the time I appear on camera later in the day, I need to have an understanding of what we're going to talk about. I need to have an opinion. I need to have a position. And I can guarantee you, I'm going to have that because of the pressure I have to perform. I just will. Like, I don't know right now, but I know that I'm going to figure it out tomorrow. So I feel like the learning that, I mean, most people don't have a job like this. Most people don't have a job like Kyla does. But I still think there's something you can take with you. And that is if you want to connect the dots and be smarter about what is happening in the world, you should just make yourself speak more. Like you should say more things at work.

• 21:51Ed Elson?

  When you're in a meeting, you should just force yourself to say something, have an opinion. You should have that pressure on yourself, maybe a cocktail party. Like, okay, I usually don't have a thought, but you know, I'm gonna just take the risk and like, say it right now. You should do it online, like you should like post on LinkedIn, you should start a newsletter. Like, I feel like the more you hold yourself accountable to producing thoughts and ideas, which is really uncomfortable to do. But the more you force yourself to do it, I think it really helps you connect the dots and also develop your own perspective. That might be kind of like an aggressive way to, to, to, to get it, get it home.

• 22:36Ed Elson?

  But I, I do feel like that's been a real benefit for me of doing this podcast and doing this stuff. It's like, I don't have a choice. I have to have an opinion on stuff. I feel like you can, you can do that too, in your daily life.

• 22:49Kyla Scanlon?

  I think I'm just, I don't know if we need like more hot takes. I think we need more informed takes. And so I would agree. Yeah, I would agree that like people should read the data, read the research, and then they should post on LinkedIn. I don't think they need to be just, um, that's not what you said. You didn't say that they should just like post on LinkedIn with whatever they're thinking about. But I do think.

• 23:11Ed Elson?

  Informed, yes. Yeah, but it is an important caveat.

• 23:14Kyla Scanlon?

  I think it would do a great service to us as a capital S society if people were engaged a little bit more actively in how the news is impacting them. I think it's really important to not internalize it. You know, it can be very stressful. Part of the media environment right now is a little bit of the flood the zone strategy where it is stressful by design. And so I think you kind of just have to know, okay, like what do I want to learn? Like, what do I want to have a new perspective on? And then go and seek that out. And so I don't know if you have to like read. Everything all of the time because that just might wear you down.

• 23:59Kyla Scanlon?

  Uh, but if you know sort of what you want to be knowledgeable about, like, is it, you know, peptides, which is the new craze in Silicon Valley? Like, do you want to understand everything about that? Like, you can go down that rabbit hole. So that's what I recommend is like, read and stay informed and then, you know, know what you want to learn about.

• 24:14Ed Elson?

  Read and then speak.

• 24:16Kyla Scanlon?

  Yeah, crazy.

• 24:18Ed Elson?

  And I'm trusting Matt MC121 to not just spout off about shit that he has no idea about. I'm trusting you, sir, to understand the ideas. But I do think, again, hold yourself to it. Okay, I've read stuff. I've looked at all the perspectives. Now it's my job to say something to someone. I think that's an important step that you shouldn't count out.

• 24:43Kyla Scanlon?

  Yeah, you have to approach this with kindness and empathy. Uh, so like one thing that I also do to sort of get rid of the noise is I talk to a lot of people. So I'm on the road quite a bit and I'm traveling and I'm talking to people who are real and like not on twitter.com. And so I think that's also important is like to talk to real people and not to let your perspective totally consume you to where you're not allowing any other input. It's really a tricky ledge to walk. Um, but you have to make sure, I think, that you're, you're open, not to be like too prescriptive, but I, I think you have to be open and you have to make sure you're approaching people with kindness. Uh, cause the world needs a little bit more of that.

• 25:25Ed Elson?

  That is a wonderful place to end. Kyla Scanlon is an economic commentator, educator and founder of Bread, a financial education platform reaching millions through storytelling and analysis. She's also the bestselling author of In This Economy: How Money and Markets Really Work. Kyla, this has been awesome. I hope Scott is gone again, because we should do this again.

• 25:48Kyla Scanlon?

  Yeah, thanks for having me.

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