The Prof G Pod with Scott Galloway
Why Young Americans Feel Stuck in Today’s Economy — ft. Ed Elson & Kyla Scanlon
16 Jan 2026
Chapter 1: What forces are shaping the economy for young Americans?
Welcome to the second and final episode of Prof G on Economics, a special series focused on the forces shaping the economy and your financial life. I'm Ed Elson, co-host of Prof G Markets. I'm joined again by Kyla Scanlon, economic commentator and author of In This Economy, How Money and Markets Really Work.
Together we will be answering your questions on the economy and what it means for your money. And if you'd like to submit a question for next time, you can send a voice recording to officehoursofprofitgmedia.com or post your question on the Scott Galloway subreddit. Kyla, thank you for joining us.
Chapter 2: How are millennials redefining traditional spending patterns?
Thank you.
Are you ready to get into this?
Yes.
Our first question comes from Spencer Combs on Instagram. They say, quote, it seems like a growing number of millennials priced out of home ownership and delaying kids are redefining traditional spending patterns. Rather than channeling money into homes and early family life, they're allocating more toward experiences, pets, and accessible luxuries.
These categories may increasingly replace those older economic anchors. How do you see this generational reallocation of spending influencing the economy overall? And what opportunities could emerge as a result? Kyla, what say you to Spencer Combs?
I think it's an interesting question and it actually becomes an American dream question.
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Chapter 3: What is aspirational displacement and how does it affect spending?
So there's something called aspirational displacement where people who can't afford to buy a house, which is that traditional path of the American dream, they start buying experiences, they start spending on their pets because they have additional income, but they can't, you know, make a huge purchase like a house. And so it's an interesting thing that we're seeing in the economy and
And on the previous episode, I talked about Bommel's cost disease and how goods were getting cheaper and cheaper because we've gotten better and better at producing them. Services have taken a longer time to get cheaper because it's much harder to make services more productive. It's very easy to automate a car factory, much harder to automate a physician facility.
And so I think that's also part of it is that it's much cheaper to access these accessible luxuries. We also have international trade, which has informed a lot of the access to these luxuries, oftentimes which come from abroad. And then the experiences part is a lot of travel, too. And so the average American travels a whole lot more than they used to.
And so these are interesting indicators of economic health. So a lot of people have a sense of financial nihilism because they might not necessarily be on the path that they want to be with the American dream, but they can afford these things.
Chapter 4: How does financial nihilism impact consumer behavior?
And so it does create a weird discrepancy in the economy where we see strong retail sales, but we see consumer sentiment so low. And in terms of how... It's changing the economy. You see companies catering to it a lot more. Like there is a whole airline that caters just to dogs. I think it's called Bark. Have you seen this? Have you seen that? You can fly your dog on the Bark plane. Yeah.
No, I'm serious. Oh, God. Yeah. It's something that happened. Did not know that. It's something that happens in higher income countries is, you know, more and more so they'll spend on these sorts of things. It's the same pattern that we saw in Japan as well. South Korea, too. So, yeah, it makes a lot of sense. And there's going to be a lot of luxury brands that are able to capture that.
A lot of dog airplanes that are able to capture that. And it does represent a strange amount of economic health.
Chapter 5: What misleading economic indicators should we be aware of?
I think the thing that's so depressing to me about it is it's like, we don't have enough money to buy houses, but we do have enough money to buy flights for our pets. And that's such a weird in-between stage, which is almost... I don't know if it's worse than not having the money to buy the dog flights, but it's definitely got a very depressing irony to it. to it that concerns me.
And it reminds me of also like the little treat culture, which is this whole thing where it's like, you don't think that you can buy a house or get anywhere because everything's way too expensive. So instead of like saving up for these meaningful purchases, you instead just like spend all of your disposable income on what people are calling like little treats.
So like maybe the dog flight would be one of them or like, you know, clothes or the boo-boos or like expensive coffee, like whatever it is. Maybe you'd put sports betting in that category, too. which is really concerning to me, at least, because it just makes me think that this generation has kind of given up and has decided that they're not going to get out, so why even try?
And to the dog flights, I've got to look this up, bark, it's crazy. So I have some data in front of me to the pet point, about how much young people are spending on their pets. So I guess this really aligns with what you've just said. So the average American across all age groups spends, if you have a pet, spends $4,400 per year on their pets. For Gen Z, the number is over $6,000.
So young people are spending 40% more than the average pet owner.
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Chapter 6: How are young Americans approaching investing in the stock market?
But here is where it gets worse. a third of those Gen Z pet owners say they have gone into debt because of their pets. So we're literally levering up to put our dogs on flights and get them fancy dog collars and maybe get them fancy dog treats. And meanwhile, the cost of housing is six times our income and we're doing nothing, it seems, to figure out how to save for that event.
And you can't really blame us because of the financial environment we're in. And I think this also goes to the stuff that we're seeing with, like, family planning, where young people just don't really want to have kids anymore. It seems like they're more interested in having, like, a dog or a cat or a pet because it's just less expensive.
So I don't know what the—I mean, the question is, like, what opportunities arise. I'm not seeing much positive in any of that, but I think that it is a really good question that highlights something that probably deserves more airtime in the young people conversation. And after this, I will be checking out that airline.
That's crazy. Well, it does create, I think, yeah, I mean, it creates a distorted lens on the economy because, like, some people would be like, hey, you know, they're buying their dogs airline tickets, you know, things have to be somewhat okay. They're fine. Yeah, it's seen as like, and they do have the money to do it.
Like it's some, well, they're taking out debt, but it's some element of economic health. And then it's just a shift in priorities too. And, you know, we often talk about this like fabled American dream. It's something I write a lot about because I think it's really interesting.
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Chapter 7: What role does sports betting play in the financial landscape for youth?
Like what does the society subscribe to as a path? And I think right now that path is evolving because of the economic constraints. You know, houses are just a lot harder to come by, and so it's harder to do family formation, to stay in one place even. And it's just a different world.
And I think that it's hard because for the past 40 years with this great moderation, where things, the growth of suburbia, the growth of white-collar jobs, it seems like everything would stay stable forever. And that's just not how the world works, apparently.
So I'm looking at our second question, and it kind of relates to what we just discussed. This comes from Instagram user Alan Davidson. Alan asks, quote, This is interesting because it's, I mean, it really relates to what we just talked about, where if young people are out buying avocado toast and lattes, I feel like boomers immediately go, well, you can buy avocado toast, so you're fine.
Everyone's fine. The first thing that comes to mind for me is like whatever avocado toast sales are, that would be a misleading economic indicator of what's really going on. But the one that bugs me right now is this interest that people have, and it's true, that more young people than ever before are investing in the stock market. Like it's something like half of us...
today, half of Gen Z, which is a record high. And then also like young people today are investing way earlier than other generations did. So it's like, okay, you guys have some money and you're interested in stocks. Therefore you're good. Like you're in good shape. And for me, this frustrates me because I feel like it ignores two really crucial things.
One of which is how much are we actually investing and And the answer is it's really not a lot at all. Like, if you look at Robinhood, as an example, which is where most young people are trading, the average account balance is less than $250, which is tiny. So, sure, we're investing, but we're not investing in a way that's meaningful, most of us, or at least on average. And then the second...
for me is like, what are we actually investing in? And for most young people, it's very heavy on the crypto and the meme stocks.
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Chapter 8: How can we navigate the noise in today's media landscape?
And there was this Bank of America study, survey, they found that the average young person has 30% of their portfolio in crypto. That, to me, that's not healthy. That's not a symbol or a signal that young people are doing well. That's a signal that they're getting a little desperate and they're YOLOing into things where they might see perhaps a glimmer of outstanding returns.
But the phrase, young people are investing more than ever in the stock market, it makes you think that we're set, right? And I feel like there are a lot of other indicators which we could get into, which I feel like are more symbolic of what's really going on. And that is we're not set.
No, I think that's true. And the economic indicator that I brought to the table is a bit similar, where people talk about how much young people are sports betting. You know, 31% of 18 to 34-year-olds have an account with sports betting, as you were talking about. 32% of them bet three or more times a week. 30% has bet more than 500 in a single day.
But when you ask them if they want this, people say no. A Pew Research poll found that over 40% of people aged 18 to 29 think that legalized sports betting is bad. It's up sharply from 34% in 2022. By the way, that matters, that change. And so I think that's another thing that ties into what you're saying, is it seems like everybody wants to be betting.
Everyone, even though it's not that many, it seems like a lot of people, but everybody wants to be betting. Everybody wants to be a part of this casino economy. But when we look at the data, that's just not true. That ties into the first question pretty well, where people are doing this because of aspirational displacement.
They're doing this because they're trying to find some way out and because it's accessible. I think also prior generations might have tapped into this stuff a little bit. But I don't know. So I think that's I think one of the most misunderstood things is that people don't want what's happening right now with elements of the casino economy.
Yeah, that's a great point. It's like the same with any other addiction. Like, you know, you could be addicted to alcohol, you could be addicted to opiates. And then you can also probably think these things are terrible and I wish they had never entered into my life. I feel like the data that you're producing there is like, that's exactly the story that it's telling.
It's like, we're addicted to this stuff. We know it's not good for us. But we keep doing it because that is the nature of addictions, which, again, is really concerning to me. Okay, we will be right back after a quick break.
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