Plain English with Derek Thompson: "Are Young People Screwed?" (Nov 12, 2025)
Overview
In this episode, host Derek Thompson explores the increasingly pressing question: Are young people today fundamentally "screwed"—economically, socially, and in terms of future opportunity? Joined by top financial commentators Michael Batnick and Ben Carlson (co-hosts of the Animal Spirits podcast), the trio dive deep into the state of the housing market, labor market, AI's impact on jobs, the stock market, and the role of narrative in shaping both perception and reality for younger generations.
Key Discussion Points and Insights
1. Framing the Problem: Why Are Young People "Screwed"?
- Historical Negativity: Recent data, such as the University of Michigan’s Consumer Sentiment Surveys, shows record-low economic optimism among Americans aged 18–34 ([00:44]).
- Housing Market Realities:
- Median age of first-time home buyers hits 40—10 years older than a decade ago.
- Only 21% of home buys are from first-timers, an all-time low.
- Housing prices are up 50% in a decade; mortgage rates have doubled ([04:39]).
- Student loans and inflated car prices compound pressure.
Quote:
“There’s never been a worse time to be a first-time home buyer, right? The NAR just said... median age... is now 40 years old and it’s the lowest share ever. Housing prices went up 50% this decade alone. Mortgage rates doubled.”
— Ben Carlson, [04:39]
2. Dissecting the Housing Crisis
- Demographics & Policy: More people are hitting home-buying age, but older homeowners are firmly holding properties (often mortgage-free). Those with 3% mortgages have little incentive to move ([06:20]).
- Supply Shortage: Post-2008 Great Recession saw depression in construction, leading to chronic housing undersupply, compounded by pandemic-driven demand and interest rate spikes ([07:14]).
- Historical Perspective:
- Unemployment for young people is always higher than the overall rate; current spread is not abnormal compared to previous decades ([08:21]).
- Market is tougher, but not universally unprecedented. Other generations have faced similar, or even higher, structural barriers.
Quote:
“Are young people so much worse off than when we were young people? When we graduated, the unemployment rate for young people was 16%... No, it wasn’t very good.”
— Michael Batnick, [08:21]
3. Labor Market: Generational Headwinds
- Hiring Decline: Job listings and hiring rates have dropped significantly since 2022, even as the stock market soars ([10:10]).
- AI's Role:
- Correlation between the launch of generative AI (e.g., ChatGPT) and weakening job market for entry-level roles.
- Anecdotes and studies suggest AI replaces some entry-level hires, especially in fields like programming ([13:41], [17:54]).
Quote:
“The fact that 9% unemployment coincides with OpenAI putting out ChatGPT... we had this handoff from ‘how are we ever going to solve this inflation?’ to ‘Oh, here’s AI. This is how you solve it.’”
— Ben Carlson, [12:43]
4. The AI Paradigm: Bubble, Revolution, or Both?
- Debate on whether current AI hype is a classic bubble, a true revolution, or first one, then the other.
- Massive capital spending (“hyperscalers”) and unprecedented scale: giants like Apple have business models dwarfing many established sectors ([33:27]).
Quote:
“OpenAI with their $1.4 trillion worth of commitments over the next six [years], and they’re only doing $14 billion in revenue today. Like, hello, make the math math.”
— Michael Batnick, [33:27]
5. Stock Market as a Generational Lifeboat
- Owning vs Renting:
- Many young adults, unable to buy property, funnel disposable income into stocks—potentially enhancing long-term wealth ([25:21], [27:32]).
- Shift from previous generations: stock participation much higher and starts earlier.
- Market gains (especially MAG7/Nvidia etc.) have multiplied young people's holdings.
- Risks: If the AI-fueled tech market crashes, younger, newer investors may exit and lose faith ([27:32], [30:02]).
Quote:
“People under 40 have seen their holdings in stocks rise 300% since 2020... all these people who can’t afford a home now are investing in the stock market.”
— Ben Carlson, [25:21]
6. K-Shaped Recovery and Growing Inequality
- Intragenerational Divide: Top-performing young people (especially those skilled in AI) race ahead, while others risk being left far behind ([24:29], [17:54]).
- Complication: Even within ‘winners,’ frustration persists because core life milestones (like homeownership) remain out of reach.
Quote:
“There’s probably never going to be more inequality within the generation than this generation coming up right now. Like, the people that are ambitious and know how to use the technology are going to be doing great and the people who don’t... left behind.”
— Ben Carlson, [17:54]
7. Corporate Profits and the Broader Market
- Margin Expansion: Despite headwinds, S&P 500 profit margins hit record highs. Companies adept at "protecting the bottom line"—even if this means laying off workers ([44:19]).
- Disconnection with Reality?: The stock market looks more robust than many actual lived experiences. This feeds further bitterness and alienation ([45:16]).
Quote:
“Corporate America... out-performing Americans. Companies... completely insulated from higher interest rates... really good at protecting their bottom line.”
— Michael Batnick, [44:19]
8. Narrative vs. Data: How Perception Shapes Reality
- Negative narratives about generational decline are both exaggerated and self-fulfilling, but have real-world impact—shaping politics, elections, and even market performance ([49:42]).
- Call to look beyond the doom spiral: many young people are thriving, risk tolerance is high, and early financial engagement can mean greater long-term wealth.
Quote:
“Pull yourself out of the negative vortex if you’re in it... things aren’t as bad as they will always seem. That’s a structural issue with the way that we communicate these days.”
— Michael Batnick, [48:30]
Notable Quotes & Memorable Moments (with Timestamps)
-
On the housing crisis:
“It is a peanut butter and poopy sandwich, there’s no doubt about it.”
— Michael Batnick, [08:21] -
On technological change and narrative:
“I do believe I am a techno optimist. However... the inability of young people to enter the workforce is going to be dramatic. Unfortunately, I do believe that AI is going to automate all of the entry-level jobs.”
— Michael Batnick, [22:14] -
On the utility of social media blame:
“When did we stop blaming social media for all our problems? Can we get back to doing that a little bit?”
— Michael Batnick, [32:30] -
On staying grounded:
“Put your phone down for a second. I’m addicted too. But get out into the real world and you’ll see that things are not so bad.”
— Michael Batnick, [48:30] -
On the power of negative headlines:
“I know the negative headline’s going to outperform the positive headline every single time, which speaks both to my, as a writer, preference for negativity and the audience’s preference for negativity...”
— Derek Thompson, [49:42]
Timestamps for Core Segments
| Topic | Start Time | |---------------------------------------------------|------------| | Dramatic economic pessimism & survey data | 00:44 | | Housing market travails & why it’s so bad | 04:39 | | Demographics, supply, mortgage lock-in | 06:20 | | Labor market & unemployment context | 08:21 | | Declining hiring rates & “scariest chart” | 10:10 | | The AI effect: jobs vs. markets | 13:41 | | Is AI a bubble or a revolution? | 22:14 | | Stock market replacing homeownership as asset | 25:21 | | Intragenerational inequality increases | 24:29 | | Social media, narratives, and expectations | 32:30 | | Tech giants’ real scale and the AI buildout | 33:27 | | Corporate outperformance & role of margins | 44:19 | | Advice for young people | 46:46 |
Closing Advice to Young People
- Focus on what you can control: Improve your skills, recognize opportunities, don’t internalize negative generational narratives, and embrace risk earlier ([46:46]).
- Avoid victim mentality: Don’t define yourself solely by broad demographic struggles; individual agency still matters greatly.
- Get out of the digital doom-loop: Real-world engagement can counteract the negativity bias inherent in online news and social media ([48:30]).
- Be creative: Creativity and adaptability are key hedges against AI displacement ([48:10]).
Tone
The conversation is candid, often irreverent and sharp-witted, with moments of dark humor (“peanut butter and poopy sandwich”), but always rooted in real data, nuance, and a commitment to examining both gloom-and-doom narratives and the bright spots that are too often ignored.
For listeners:
This episode is a must for anyone grappling with the realities and myths about the generational outlook for young Americans. It balances hard economic analysis with narrative critique and grounded optimism. Even if “young people are screwed,” it’s not the whole story—and where there are losers, there are, sometimes unexpectedly, winners.