Finding a $20 Bill

There’s a saying in economics that says, “you will never find a $20 bill.”

This isn’t supposed to be taken literally. It just means that finding a $20 bill is so rare that you can’t build policy or make life decisions on the premise that you will find a $20. Reason is because it will be arbitraged away. Statistically, someone would almost definitely have found that money before you.

I bring this up because it’s just a matter of course that the future for young Americans looks bleak and not without cause. College degrees worth a damn come at the cost of highway robbery. Yet without a college degree, your salary and benefits expectations are startlingly diminished. Economic productivity is ever-increasingly focused on cities. That means the best-paying jobs are located where the cost of living is highest, leaving workers stranded in a paradox where they can’t get ahead. I could go on-and-on, but whenever anyone brings this up, there’s always an eager optimist who argues they know people without college degrees who are doing well, there are pockets of America with opportunity where cost of living isn’t so high, and besides, there’s always the blue-moon possibility you will be the person who invents something the world needs or become a YouTuber that become a millionaire. Therefore, the American Dream must not be on life support.

That is largely true. There’s always the possibility you’ll be the person who makes a good living without a college degree and always the possibility you’ll beat the odds. But it’s missing the underlying argument. They are describing the possibility of finding a $20 bill lying around on the floor and, by extension, implying there are plenty of $20 bills lying around for everyone to have enough.

Even if I find that $20 (or find a good paying job without the high cost of living) that means someone else won’t have that $20 and the overall situation of our generation is not made better. The lack of feasibility of finding a $20 or becoming a millionaire without a college degree is not describing an empirically observable truth but the reality that you can’t count on that happening to make your life decisions or to decide policy.

There is a sort of frustration felt among the new generation that can come across as pessimistic, but their frustration is not irrational. There is a desperate need for policies that lead to robust economic growth without depending on household debt. Otherwise, this radical divide truly tearing our country apart is only going to get worse. It’s already gotten to catastrophic levels.