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Why We’re Wrong About Millennials

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Businesses spend millions of dollars trying to understand them. News outlets write thousands of articles about them. And the public thinks they’re pampered phone-addicts that live in their parents’ house.

Millennials.

What are millennials anyway? There are a few ways to define this age group, but for clarity’s sake, we will define the term as Pew Research does. According to their chart, millennials were born between 1981 and 1996.

The world is fascinated by this demographic. Here’s a spattering of popular content about millennials:

In 2016, Inside Quest interviewed Simon Sinek about millennials and the video went viral with 11 million+ views. In it, he says millennials are lazy, narcissistic, entitled, and addicted to their phones.

A lot of people agreed with his views, but are these opinions a fair understanding?

This article seeks to explain why some stereotypes about millennials are inaccurate. Consider these thoughts on why we may be wrong about millennials:

Opinions about millennials are similar to every generation in history

Popular opinions about millennials include:

  • They’re pampered and spoiled
  • They won’t work hard and expect to be rewarded
  • They’re given everything, yet complain endlessly

But here’s the thing – adults have been saying this is about younger generations for centuries. Compare these quotes from the past and our current century:millennial_chart

Amazingly, people complained about young baby boomers the same way baby boomers complain about millennials. And you know what? When millennials get older, I bet they’ll complain about the younger generation the same way too.

This historical pattern reveals that millennials are not unique in these regards. In the 1950s, young people were apparently “pampered” by technology and preferred busses over walking.

In the 1990s, they said that the younger Generation X lived better than the previous generation but complained about life more.

Even 2000+ years ago, Aristotle said the youthful thought they knew everything and were insolent.

Sound familiar?

Are only millennials pampered complainers? Or are they just like every other generation of humans? The more logical conclusion is…

People change as they get older

If people progress properly, they become wiser and more experienced as they age. It’s natural for the older to view the younger as foolish and inexperienced.

Our older selves are significantly different than our younger selves. We should apply a similar grace to millennials. They will grow and mature as previous generations did.

Opinions on millennials downplay external factors

This is a frustrating injustice that all of us have experienced – being blamed for something that was beyond our control. There may be certain trends among millennials, but how much is due to circumstances they grew up in?

A few condemning stereotypes about millennials conveniently overlook external factors that were beyond their control. Here are two examples:

Tech advancement coincided with millennials’ coming of age

Have you heard that millennials are screen-centered, phone-addicted slaves to technology? Well, it’s partly true.

A study by Akademiai revealed female college students spend 10 hours a day on their phones and male college students spend 8 hours a day on their phones.

Part of this phenomenon has to do with recent technological advancements. Common in-person activities have evolved into online activities. For example, you can use your phone to…

  • Do banking
  • Email, text, photography, and video
  • Network on social media
  • Apply for jobs
  • Order food
  • Listen to music
  • Find a date
  • Research questions
  • Use handy tools like a calculator, dictionary, stopwatch, alarm, or notebook
  • Watch a how-to video

When you consider these developments it’s natural to conclude that people will be on their phones more, especially individuals who grew up with access to mobile devices.

If there’s a broken copy machine at work, someone is bound to watch a how-to video on their phone. If it’s ten minutes before lunch, someone will most likely order pizza through an app. Where employees used to play the radio while working, now they will opt to stream music on their phones.

Do people goof off on their phones? Absolutely. But not all phone usage is bad. It seems like millennials are ruthlessly thrashed for using their phones. Sometimes they’re just following a map app to a new location or reading current events.

Don’t forget about the ‘08 recession

Another common stereotype about millennials is that they do not work hard and are financially irresponsible. They live with their parents into late adulthood, spend too much on avocado toast, and have tons of student loans.

A study by Urban Institution revealed that millennials are less likely to be wealthy compared to previous generations at their age.

But is the financial state of millennials due to incompetence and poor work ethic? Research tells a different story. According to a U.S Travel Association survey, millennials are workaholics.

They surveyed 5,000 full-time employees and found millennials are more likely to forfeit vacation days than other age groups. Millennials were also more likely to agree with these statements:

  • “I want to show complete dedication to my company and job.”
  • “I don’t want others to think I am replaceable.”
  • “I feel guilty for using my paid time off.”

In other words, millennials are working hard, but they’re not making as much money.

When we combine these two studies, poor work ethic isn’t the issue affecting millennial wealth. The more likely conclusion is the poor state of the economy.

Thousands of millennials graduated college with huge student loans only to enter an American workforce shattered by a real estate bubble.

Investments were lost. Homes were foreclosed. In the months after the bubble burst, unemployment peaked at 10%.

With the rising cost of real estate and stricter lending standards, it’s no wonder that millennials are less likely to own a home than previous generations.

Opinions on millennials are rarely based on evidence and data

There’s a lot of talk about millennials, but it’s rarely based on evidence and data. A prime example is IQ’s interview with Simon Sinek, which was earlier cited. In this 15 minute video, Sinek doesn’t reference a single source for his opinions.

While Sinek has interaction with millennials, his experience is a tiny fragment of a huge demographic.

And he’s not the only one. There are some silly articles out there that are just baseless in their claims:

There’s tons of talk and ink spilled about millennials, but there isn’t a lot of solid, reliable information out there.

What’s worse is that readers have some experiences with millennials that match these theories and conclude, “Oh wow, that information was true.”

Eventually, so many people buy into these claims that readers suffer from groupthink. If the majority believes millennials are filling the void of their heart with houseplants, well then it must be true.

We need fewer stereotypes and more research

Jokes are good from time to time and every civilized society needs humor, but many of these stereotypes don’t accurately portray millennials. Just because content goes viral and a lot of people believe it, doesn’t mean it’s true.
To properly understand millennials, we need to actually study them and produce informed opinions based on research. Good places to start are Pew Research and Census.gov. You can also conduct your own surveys with SurveyHero.

Not only is this approach more ethical than rehashing stereotypes, but it will also help us navigate familial and business relationships. Millennials will be less misunderstood, and we will understand them better.

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Economy

The Fed is Propping Up Bond Prices, Are Stocks Next?

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The Fed is Propping Up Bond Prices, Are Stocks Next?

Last Monday the Federal Reserve announced that it would spend nearly $700 billion to buy up Treasurys and mortgage-backed securities as part of its “aggressive action” to soften the impact the coronavirus is having on our economy.

As part of the stimulus package, the Fed also said it would start buying exchange-traded funds (ETFs) that track the corporate bond market. For now, it appears the purchases will be limited to investment grade or highly-rated corporate bonds and won’t include more risky high-yield (or junk) bonds.

It’s the first time that the Fed has directly bought securities in an attempt to add liquidity and jump start a frozen market.

“This will provide much-needed liquidity to the bond market and to ETFs,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA.

Steve Blitz, chief U.S. economist for TS Lombard, says the Fed’s move is helping investors enter and exit a position if needed. “All of this is to make sure that people who want to sell have a buyer. The Fed is taking both sides of the market so people who need to raise cash can do so.”

It’s clear why the Fed prefers to buy corporate bonds through an ETF as opposed to buying bonds in individual companies. With one purchase order, it can impact the bond prices of hundreds of companies at once, as opposed to the time consuming task of identifying, pricing and then buying bonds of individual companies.

By moving into the ETF space and buying up bonds, the Fed may also be trying to calm a part of the market that has seen record outflows over the last few weeks. Just two weeks ago, the iShares iBoxx $ High Yield Corporate Bond ETF saw a $1.2 billion outflow, or roughly 8% of it’s total value.

The question becomes, if the market continues to slide as the coronavirus outbreak batters the economy, would the Fed extend its reach and start buying stocks via index ETFs?

It’s an unprecedented move, but then again so was buying bond ETF a little over a week ago.

It would allow the Fed simultaneously impact the stock price of hundreds of companies at once. With the SPDR S&P 500 ETF, the Fed could move the stock price of all S&P 500 companies with a single purchase.

The same would apply for all broad index ETFs like the Dow Jones Industrial Average (DIA) and Nasdaq (QQQ).

Vincent Reinhart, chief economist and macro strategist at BNY Mellon Asset Management, says it could be in the Fed’s playbook.

“Other central banks have done it. It’s the ETF route that the Bank of Japan has taken. I would not rule out them doing equities.”

Lindsey Bell, chief investment strategist at Ally Invest added “We’ve seen the Fed show that they’re willing and able to do whatever it takes to make sure the markets are opening in an efficient manner. They’re taking whatever steps they can. That would be new territory for the Fed, not that they’re scared of new territory.”

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Economy

Wall Street Warns: More Pain Still to Come

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Wall Street Warns: More Pain Still to Come

Despite his hopes to have the country operating normally by Easter, President Trump announced in a press conference last night that he is extending the social distancing mandate until April 30, and now hopes the country will be on the road to recovery by June 1.

That’s going to put additional pressure on an already struggling economy as restaurants, retailers and other businesses stay shuttered for even longer.

And despite last week’s dramatic rally in stocks, many on Wall Street are saying that things are going to get much worse before they get better, and are expecting further declines in the market.

Goldman Sachs’ U.S. chief equity strategist David Kostin wrote in a recent note to clients that “bear markets are often punctuated by sharp bounces before resuming their downward trajectory.”

Kostin says there were six distinct rallies of 9% or more between September 2008 and December 2008 during the financial crisis.

“Most bounces involved optimism around monetary or fiscal policy support. However, the market low did not occur until March 2009, when the pace of economic contraction began to slow,” Kostin added.

John Velis, a currency and macro strategist for the Americas at BNY Mellon, agrees that there could still be plenty of downside left in the markets.

“COVID-19 infections in the United States are still growing in number and we are not close to the peak of ‘the curve.’ Indeed, one could argue the worst is yet to come on the public health front, and this could entail ever more pain on businesses and employees — and the market.”

Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, also believes the market is still searching for a bottom.

“This analysis continues to keep us concerned that the U.S. equity market hasn’t found a bottom yet. It also reminds us that after the most severe equity market drawdowns, durable bottoms have taken time to form – something we think will be the case this time around as well. We are growing increasingly skeptical about the V-shaped recovery thesis in stocks. In particular, we are concerned that there has been too little discussion about the longer-term collateral damage from the public health crisis.”

Mohamed El-Erian, the chief economic adviser at Allianz, said in a Bloomberg op-ed article last night that even with last week’s rally he expects stocks to resume their slide.

“I fear that this is more likely to prove a temporary exception to what, unfortunately, is still an outlook for high stock market volatility around a still-downward trend.”

And economist Nouriel Roubini, known as “Dr. Doom” said in a recent tweet to “beware of bear market “head fake” rallies. The market can’t truly Bottom till the Virus tops & the rate of increase of new cases is sharply down.”

This isn’t to say investors should sit on their hands and do nothing until the market drops further. If you have a long-term outlook and can average into positions over time, adding a bit here makes sense while waiting to see which direction the market goes. If it drops further, you’ll have the chance to add more at even lower prices. And if the market rallies, today’s prices will seem cheap.

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Business

IRS, Treasury Department and Department of Labor Give Guidance on Small Business Leave and Tax Credit

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IRS, Treasury Department and Department of Labor give guidance on small business leave and tax credit

The U.S. Treasury Department, Internal Revenue Service (IRS) and the U.S. Department of Labor (Labor) have announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.

This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.

The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members.

The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.

Key Takeaways

* Paid Sick Leave for Workers

* For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.

* Complete Coverage

* Employers receive 100% reimbursement for paid leave pursuant to the Act.

* Health insurance costs are also included in the credit.

* Employers face no payroll tax liability.

* Self-employed individuals receive an equivalent credit.

* Fast Funds

* Reimbursement will be quick and easy to obtain.

* An immediate dollar-for-dollar tax offset against payroll taxes will be provided

* Where a refund is owed, the IRS will send the refund as quickly as possible.

* Small Business Protection

* Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.

* Easing Compliance

* Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.

Background

The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.

Paid Leave

The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee’s pay.

Paid Sick Leave Credit

For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days. For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Child Care Leave Credit

In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Prompt Payment for the Cost of Providing Leave

When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.

Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.

Examples

If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.

Small Business Exemption

Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.

Non-Enforcement Period

Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.

For More Information

For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week.

© Copyright 2020, The Courier, All Rights Reserved.

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