LUCAS JACKSON/Reuters
- Inflation will hurt an "entitled generation that has never had to sacrifice," BlackRock's president said.
- He did not specify which generation he considered to be "entitled."
- Inflation is surging at a 40-year high, and prices continue to climb amid the Russia-Ukraine crisis.
Inflation is coming for us all, but it's about to hammer an "entitled generation."
So says BlackRock president Rob Kapito in a recent conference of oil and gas producers in Austin, Texas, as first reported by Bloomberg News. He said an entire generation would feel the blow of the shortages in goods, housing, and workers associated with the "scarcity inflation" threatening the economy.
"For the first time, this generation is going to go into a store and not be able to get what they want," he said. "And we have a very entitled generation that has never had to sacrifice."
He added: "I would put on your seat belts because this is something that we haven't seen."
Inflation is surging at a 40-year high, marked by a historic era of shortages — of workers, products, and real estate. After a year of escalating prices, the Russia-Ukraine conflict is further marking up price tags. But Kapito didn't specify exactly which generation is going to have the toughest time reckoning with this economic challenge.
Age 65, he could be calling out his fellow baby boomers, who have been criticized for bankrupting a rich economy by running up deficit spending, among other things. But his phrasing sounds like he doesn't belong to the generation he mentioned. Plus, boomers lived in the heated economy of the 1970s and 1980s in which inflation peaked, so they've been here before.
He could be alluding to Gen X, who are in their peak earning years, and therefore have the most to lose.
Or he could be referencing the youngest generations of millennials or Gen Z, both of whom are seeing inflation for the first time. Millennials, in particular, have been the subject of an "entitled" stereotype since coming of age in the "just-in-time" economy of the 2000s.
They're also the generation who is feeling the burn of inflation the most, according to a study by Wells Fargo. It analyzed the Consumer Expenditure Survey to determine which cohorts have seen the steepest rise in cost of living and found that millennials are being hardest hit with price hikes due to the life stage they're in.
Wells Fargo senior economist Sarah House previously told Insider that millennials are more likely to spend on used and new cars as well as gas, both of which have seen the steepest rise in prices the year through December. Since then, gas has become even more expensive amid sanctions against Russia.
Millennials have also been spending more on housekeeping goods and home furnishings since many are buying homes for the first time, House added. Not much of their spending goes toward the areas that have mostly escaped inflation.
"On the other side of the equation, millennials spend relatively less on some of the areas that have seen the slowest rise in prices over the past year, such as healthcare, which has held down inflation rates for other groups more than millennials," House said.
Inflation is just the latest challenge for a generation already shortchanged by two recessions before the age of 40 and massive student loan debt. It's unclear if these financial challenges would qualify the generation as "entitled."
source https://www.businessinsider.com/inflation-hurt-entitled-generation-warns-blackrock-president-millennials-boomer-genx-2022-3