Millennials, Supply and Demand, and Solar Power

In 2015, Millennials will outstrip every other group in terms of workforce presence, accounting for more than a third of American workers, but our average income, spending, and marketability are much lower. Supermarkets are already making changes to account for a market that spends roughly 2/3 of what Gen X shoppers do. Informed shoppers with low debt who buy with a mind to where the food came from, freshness, and how that influences their budgets, are driving supply and demand today as Baby Boomers die off.

Here I humbly submit that the reason is very simple: there’s a basic error in supply and demand economics.

Let’s try a thought experiment.

If I were a large market chain who offers you a local pasta sauce for 4$ and an identical pasta sauce for 2$, which one would you buy?

Most people would say the 2$ one. That’s demand. People want cheap things at a good quality, and they’ll tell you by spending on it. Theoretically the more cheap goods you stock, the more profit you make and the less waste costs you. Okay, so far that works.

So the smart market chain stocks more of the 2$ sauce. We’ve established people want inexpensive things, and they sell like hotcakes. But at some point, the demand outstrips the supply: you can only make a thing so cheap before its not profitable to sell the sauce at all. Some companies turn to making the production cheaper: outsourcing the labor, buying cheaper ingredients, not paying their workers a living wage. That way the product remains profitable and they keep selling it.

But your 2$ sauce isn’t innovating, its actually dropping in value: the nutrition is lowered, the benefits to the community decrease, and the economy is hurt by the job loss. There’s no way to account for that in our society, because our metric for calculating the value of the sauce is the sales:profit ratio of the sauce. Tell investors a thing is 90% profit and they’ll jump on it, even if its something that will kill millions (look at China’s fake meds!) It’s a vicious cycle.

When you apply that principle to things like solar power, education and infrastructure, suddenly a blinding evisceration of traditional economics emerges. Just take solar: there’s no profit to be made from something that falls freely from the sky. The demand is satiated completely after initial investment (ie: building the panels) so your supply completely outstrips demand and the cost per unit of energy is reduced immensely. No cost? No profit. Just like the 2$ sauce, except the value taken out to account for the profit emerges as traditional energy companies try to sabotage solar before it even becomes a thing. We’re talking about extracting a massive amount of value from traditional industry and making it available to your average consumer to spend on other things.

Now, let’s be fair. Plenty of solar companies are leveraging traditional utilities to push the technology in a very intelligent way. In fact it’s one of the hottest growing industries, because let’s face it, we all use electricity and it would be nice if the electric company paid us for a change. They’re so profitable that companies are looking to invest in poor neighborhoods to mount supplemental panels for their grids. But just imagine what it would be like if investment jumped ten, nay, fifty times? Look at all that freed, clean energy income for everyone! And the only obstruction is it wouldn’t make money for traditional energy companies, whose investments were laid twenty, fifty years ago and don’t make money unless we keep poisoning the Earth.

Which brings me full circle back to Millennials. We’re the first generation who, en masse, are uncomfortably aware of both global warming and the horrific economic decisions made in our youth. Our incomes are so low because of recession and debt from toxic asset loans handed out like they were skittles. We want our food clean because we know what companies are willing to do to make a buck. And if we’re pulling over a third of the nation’s labor weight, why aren’t we better represented? Why are we still shackled by shitty investments made by people with a track record of screwing us over? Why are we still putting profit first when the air chokes, the water lights on fire and California is sinking into the Pacific?
I call shenanigans on that.

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