Why work when you can just spend?

This report from last week appears to have fallen between the cracks, but it is worth noting belatedly as it is another small, yet important part of a very big story that will stretch well into the next decade.

What story is that?

The impact of the early 21st century housing bubble on teenagers.

It seems that when you combine skyrocketing real estate prices and their attendant wealth effect on the greatest consumer culture the planet has ever seen, you get a lot of spendthrift teenagers who, based on the plunging labor participation rate for 16 to 19 year olds, have had almost all ambition sucked out of their system.

Teens demand back-to-school luxuries
Before Claire Stern goes back to school as a high school senior this fall, she needs a new tote. But not just any bag will do.

"I want a tote bag by Jaye Hersh that the celebrities are wearing, they're called Market Bags," said Stern, 17, who lives in Bronxville, New York. "It's more stylish than a backpack."

The bags retail for more than $100 if they're monogrammed and Stern has noticed actresses Reese Witherspoon and Jessica Alba wearing them.
...
Stern, who has saved up her own money to buy $200 Tory Burch shoes and thinks $125 Ray Ban sunglasses will be popular this year, agreed.

"Since I'm in high school and not really concerned about rent money, if I want to buy stuff for me, with money I earn, its going to be something to do with fashion," she said.

Stern added there is a limit to her back to school spending. Her parents would draw the line, for example, at an iPhone, which retails for about $600 - the total amount Stern predicts she'll spend on back-to-school shopping.

"Although it is cool and new, it is too much money and there are a few flaws in it," she said. "I understand why my parents wouldn't pay for it."

As is often times the case in reports like this, the details don't quite add up - $200 shoes, $600 total back-to-school expenses, earning, saving, parents paying, etc. - but it's a pretty safe bet that Claire didn't flip burgers for 40 hours to buy her new shoes.

Methinks the younger generation has a somewhat distorted perception of money after watching their parents gorge on home improvements, vacations, recreational gear, and second homes over the last five years.

Remember that these are the same teenagers who are going to be in the labor force paying social security taxes to fund the baby boomers' retirement over the next forty years.

I wonder how that's going to work out.