The famed 1987 movie Wall Street won Michael Douglas the Academy Award for Best Actor for his portrayal of the fictitious character Gordon Gekko. The character is memorable for his belief that "greed, for lack of a better word, is good."
While Gekko's sentiment is recognized as a famous movie line, the value system it endorses may be argued to be highly entrenched in the consumerism culture that has flourished since Wall Street was released. From the boats, clothes and cars of T.V.'s Miami Vice at the time, to the materialistic lifestyles promoted by modern entertainment icons, consumerism has become an entrenched western lifestyle. Homes have gotten larger, multiple vehicle families have become the norm, updating technology annually is routine for many and household debt has steadily climbed. But is this about to change? Are we seeing signs of a widespread acceptance of a return to a less materialistic lifestyle spawned by our historically high debt loads and global economic uncertainty?
One indication that we are can be found in the amount of debt and austerity-related stories now appearing in the mainstream media. Not only are we seeing business stories around the Eurozone crises, or the bankruptcy of Detroit, we're now seeing frequent 'lifestyle' stories on the impacts of our soaring debt loads. Many of these suggest a possible shift in priorities that may be taking shape across all age demographics.
To validate such an opinion, one needs only to review the media of the past few months and sample from different generational angles. A good starting place may be with seniors, not just because their fixed incomes make them sensitive to economic issues, but because of the unique causes of debt pressure on this group.
A CIBC poll, released July 17th, identified that 59 per cent of retirees in the country still have debt, with 19 per cent of them saying it increased in the past year. With fixed incomes, this is clearly a worrisome trend. Indeed, a Vanier Institute report identified that Canadians over 65 have the highest bankruptcy and insolvency rate of any age group in the country.
What makes the debt loads of seniors of interest are the evolving social issues they identify. Those in the older age demographic are increasingly experiencing the need to take on debt to help their adult children. As a TD Canada Trust report released in May showed, 19 per cent of 'boomers' indicated they would willfully jeopardize their financial security to help their adult children and 23 per cent of them were already helping to pay monthly bills. The result for many seniors is that the trips, golf and leisure fantasies of retirement are being replaced with working part time jobs, slashing spending and downsizing lifestyles.
But does this seemingly imposed austerity on the older end of the age spectrum really mean that a broad based cultural change is occurring? Has debt and the current economic climate affected consumerism in the young? Recent media indicates some cultural changes may indeed be occurring. In the U.S., a May news release indicated that 54 per cent of Millennials see debt as their "biggest financial concern" with 42 per cent of them identifying their debt load as "overwhelming." This report indicated that the impact of this debt fear has 61 per cent of the Millennials describing themselves as "savers". Given the age in question, an argument can be made that we're witnessing a significant shift in priorities that would make greed loving Gordon Gekko cringe. Other sources, however, suggest the Millennaials are spending well above their means and having their parents support the shortfall.
What is common to all reports about the Millennial generation, unfortunately, is that they have significant challenges ahead of them with unemployment, underemployment and staggering student loans. Back in 2011, the Globe and Mail ran a column titled "Are Student Loans the Next Financial Bubble?" and this story has really taken flight since. As students graduated this past spring, the media emphasized that the federal student debt in Canada now exceeds $15-billion, with another $5- to $8-billion on credit cards and unsecured debt. This amounts, according to one media outlet, to an average debt of $37,000 for this year's graduating student.
With this level of debt, not to mention challenges around finding work, let alone well paying work, the idea that a social change may be on the horizon (if not already underway) seems plausible. Even those Millennials not identifying themselves as savers are likely to run head long into the realities of spending limitation imposed by debt. Many seniors are already there, as are the age group in between.
Either through an embraced change in values, or an imposed austerity via debt, one has to wonder about the longevity of the consumerism culture we have seen entrenched for so many years. Perhaps we will see a trilogy in the Wall Street series, maybe along the lines of Main Street: The New Financial Frontier, where a protagonist asserts that "modesty is good, it allows you to retire."