Economics

Are Millennials Far Left on Economics? No.

Their increased social liberalism has not gone in lock step with hostility to free markets.

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In response to Robert Draper's New York Times Magazine piece on the potential for a libertarian moment, there has been much debate over where exactly young people stand on economic issues. Critics relying largely on one or two data points have tended to prematurely declare young people staunch economic liberals (e.g. here, here, here, and here). However, millennial attitudes are just not that simple; in particular they are not economic leftists as some have claimed.

Instead, Reason-Rupe's latest study of the millennial cohort shows they are socially liberal, are averse to many nanny state regulations, and are fiscal centrists

As I wrote in our July report:

"Findings from the Reason-Rupe 2014 Millennial Survey of young Americans 18-29 reveal this cohort flouts traditional political allegiances: They trust neither political party, are social liberals and fiscal centrists, and are supportive of both business and government. They favor free markets, but aren't sure whether markets or government best drive income mobility. In all, millennials are neither a Democratic nor a Republican generation; they remain politically unclaimed."

What makes this generation particularly notable is that they don't conform to conventional political stereotypes. In particular, their increased social liberalism has not gone in lockstep with economic liberalism.

To this point, Thomas Edsall in the New York Times citing a recent Pew survey observes the "emergence of a cohort of younger voters who are loyal to the Democratic Party, but much less focused on economic redistribution than on issues of personal and sexual autonomy." Edsall cites an email exchange with Andrew Kohut of the Pew Research Center, in which Kohut further explains, "There is a libertarian streak that is apparent among these left-of-center young people. Socially liberal but very wary of government."

Looking at the millennial cohort broadly, as I will detail below, we find millennials are similar to older cohorts across a number of economic issues, are favorable toward business and profit, and are growing increasingly concerned about government efficacy. Pew finds millennials are more likely to favor more services with a larger government than fewer services with a smaller government. However once tax rates are taken into consideration support flips and millennials prefer smaller government. Perhaps an issue of old Cold War semantics, millennials appear less likely to associate the "size" of government with costs. 

1. Business and the Safety Net The Pew Research Center finds that even though millennials are much more socially liberal, "[Millennial] views are not particularly distinctive in other areas, such as attitudes about business and the social safety net" (p. 63).

Business and Regulation

The charts on the right show that millennials are similar to older cohorts on Pew's Business Attitudes Index. Pew also found that millennials are actually more likely than older cohorts to agree "corporations generally strike a fair balance between making profits and serving the public interest," compared to older cohorts.

Moreover, aggregating polls from Pew, National Journal, and the Public Affairs Council shows that young people are about equally likely as older people to say "government regulation of business is necessary to protect the public interest." (See chart).

If millennials had veered hard left economically we would have observed them becoming less friendly to business and more supportive of regulation, compared to older cohorts, yet we have not. Instead Reason-Rupe finds millennials have favorable views of business, profit, competition and entrepreneurship. In addition, two-thirds perceive government regulators to place special interests above the public's.

Safety Net

When it comes to the social safety net, millennials support it. But Pew finds little evidence that millennials are more supportive than older cohorts: writing that millennials are "not particularly supportive of an expanded social safety net" (p.76). Indeed, the chart (right) shows similar shares of millennials, GenXers, and Boomers agree "government should help more needy people even if it means going deeper into debt."

Moreover, even as Reason-Rupe found strong millennial support for government guarantees, similar questions asked of a national sample find older and younger Americans are equally supportive. For instance, take this April 2012 Pew Survey, accessed via the Roper Center (above). Were millennials staunch economic liberals, they would be more supportive of the social safety net compared to older cohorts, yet they are not.

2. Government Efficacy In areas that Pew finds millennials are distinct, typically about government efficacy, we find they are becoming more like older cohorts and that support declines when considering costs. If millennials were veering leftward on economics, we would not expect an increase in government skepticism among millennials, or such a strong reaction to taxes.

Efficiency

For instance, in 2009 Pew found only 42 percent of millennials agreed government was "inefficient and wasteful." But by 2014 using the exact same wording as Pew, Reason-Rupe found this number increased to 66 percent. In fact, something similar happened for GenXers as well. In the early 90s Pew found only about 42 percent of GenX thought government was wasteful an inefficient, but that number increased to 55 percent by 2003.

Government Action 

Following a similar trend, a NBC/WSJ poll found in 2009 that 64 percent of 18-29 year olds wanted government to "do more to solve problems." By Jan 2010 Pew found this number had declined to 53 percent, and a CBS Feb 2013 poll found this number further declined to 41 percent.  Aggregating CBS, New York Times, NBC/WSJ, and Pew polls further shows the gap between young and old has narrowed on government taking action.

If millennials were economic leftists, we would not expect them to be trending away from wanting government to "do more."

Size of Government

In 2009 Pew found millennials were dramatically more supportive of a larger government than older cohorts (67 vs 41 percent). However, in 2011 Pew found support declined to 56 percent while older cohorts remained steady, and Reason-Rupe found 54 percent support for large government in 2014.

Once again, trending away from larger government is not unique to millennials. A majority (54 percent) of GenXers also preferred larger government in 1999, but by 2011 support declined to 45 percent, according to Pew.

In addition, given recent evidence that millennials may be less familiar with old language about the "size" of government, we asked two questions. The first being the standard question, the second also mentioning tax rates (see chart).

We find that support for large government flips when taxes are mentioned. In fact, 57 percent of millennials prefer a smaller government offering fewer services with low taxes to a larger government offering more services with high taxes (41 percent).

Demographics largely explain millennials' apparent preference for larger government: nonwhite Americans (who tend to favor larger government) comprise a larger share of millennials than of older generations. However, when taxes were mentioned, the race/ethnicity gap disappeared among Latino, Asian, and white millennials. This provides some evidence that different racial/ethnic groups' propensity to associate size of government with taxes may in part explain the apparent preference for larger government.

If millennials were strong economic liberals, it would be unlikely we'd observe such a strong attitude shift upon mentioning taxes associated with government services, nor for the gap to disappear among Latino, Asian, and Caucasian millennials. (Ideally, however, we'd like to have data on older cohorts to compare.)

Strong Government

In a national survey, Reason-Rupe finds millennials are no more likely than older Americans to favor a "strong government to handle today's complex economic problems" (43 to 40 percent respectively). Instead, majorities of millennials and older people favor "a free market with less government involvement" to handle these problems (55 to 57 percent respectively).

What may partly explain millennials' attitudes is that 58 percent say that government agencies "generally abuse their power" while only 25 percent think agencies "generally do the right thing."

3. Minimum Wage, Taxing the Wealthy If millennials were regular economic liberals, we'd also expect them to be more in favor of raising the minimum wage or raising taxes on the wealthy compared to older cohorts. Yet, we find they are similar to all Americans nationally.

For instance, Reason-Rupe's millennials survey found 71 percent favor raising the minimum wage, compared to 67 percent of all Americans.  Similarly, Reason-Rupe found 66 percent of millennials think raising taxes on the wealthy would be good for the economy, just as 69 percent of all Americans favor raising taxes on the wealthy.

4. Social Security Millennials are supportive of reforming Social Security to allow younger workers to invest in private accounts (71 percent). A majority still favors (51 percent) even if it reduces benefits to current seniors. Similarly, Pew found 67 percent of all Americans also favor allowing younger workers invest in private accounts. However, if allowing younger workers to opt out of Social Security meant reduced benefits to seniors, only 38 percent of all Americans would favor while 55 would oppose, according to Reason-Rupe. Millennials' willingness to cut entitlements simply doesn't comport with strong economic liberalism.

5. Economic Attitudes Shift As Income Rises 

Millennials also become more fiscally conservative as they age, make more money, and learn they will become responsible for paying for things. In fact majorities begin to oppose income redistribution and increased spending on financial assistance to the poor, and support for government guarantees drops once millennials start making between $40K-60K a year. Moreover, as they roll off their parents' health insurance policies and begin paying for their own, they no longer are willing to pay more for insurance even "if it helped provide health insurance coverage for the uninsured," flipping from 57 percent in support to 59 percent opposed.

Strong economic liberals would have been willing to pay higher taxes even as they made more money to help the poor, yet millennials trend predictably rightward on these issues as their income rises.

It's also important to note millennials are also more likely to say government has the responsibility to ensure everyone has access to health care coverage (54 percent vs 42 percent of older Americans).  But GenX was also more supportive when they were in their 20s and have since changed. A CBS/New York Times survey in 1996 found 75 percent of GenXers said government should "guarantee medical care for all people who don't have health insurance" compared to 60 percent of older Americans. However today, Pew finds 50 percent of GenX says it's not government's responsibility.

As we've highlighted before, millennials' economic attitudes are a mixed bag, favoring more government action in some areas and less in others, which we detail in our reportpress release, and blog posts.

In sum, the overused claim that young Americans are strong economic liberals is simply exaggerated. Instead, as I argue in our 105-page report on millennials, they are strong social liberals and fiscal centrists who currently tend to base their political judgments largely on social issues rather than economics.

We also have little reason to expect millennials' levels of social tolerance to fade over time. However, as they age, make more money, get their first promotion, buy a house, get married, and have kids, there's reason to expect economics will exert greater influence over millennial attitudes, and they may respond as generations before them.