MONEY job hunting

How Do You Actually Land Your Dream Job?

What is it that makes you excited about getting up in the morning?

What do you really love doing? Here’s how to figure out and land your dream job.

Talk to your network. Ask your friends. They know you well; ask what skills they see you with. You’ll likely hear things you take for granted about yourself.

Don’t do anything rash. Go slowly. Do your homework.

Research. Find out what’s out there right now you could be good at. Then, find out if you need some kind of professional licensing. If you do, go get it.

Try it out. Go and do the job pro-bono and find out how you like it. Get a sense of how well you fit in.

In order to make a huge industry switch, it’s good to allow three to five years to lay the groundwork and ensure you’re ready to launch.

Read next: How to Ace Any Interview and Land the Job of Your Dreams

TIME Millennials

Even More Millennials Are Living At Home

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Mike Harrington—Getty Images

Sorry mom and dad: Even with an improving economy, the kids aren't moving out

Young adults aren’t doing much to buck the millennials-live-in-their-parents’-basement stereotype; even an improved job market isn’t prompting them to fly the nest.

New analysis of U.S. Census data by the Pew Research Center reveals that 18- to 34-year olds are less likely to be living on their own today than they were during the Great Recession.

Unemployment among young adults has shrunk from 12.4% in 2010 to 7.7% early 2015, yet the share of millennials living independently has decreased in that time, from 69% in 2010 to 67% this year. The share of young adults living with their parents has increased in that same period from 24% to 26%.

The decline in the number of millennials living away from family reflects the decrease in independent living during the financial crisis. In the first third of this year, approximately 42.2 million millennials lived independently. In 2007 prior to the recession, about 42.7 million individuals in that age group lived on their own. In the years in between the population of 18- to 34-year-olds grew by 3 million.

In addition to shrinking unemployment, young adults are also experiencing higher rates of job-holding and full-time employment and are earning more per week now than they were just after the recession, yet the number of millennials heading their own households is no higher in 2015—25 million—than it was before the recession in 2007—25.2 million.

Pew says that these trends are not necessarily being driven by labor market fortunes since college-educated young adults have experienced a stronger labor market recovery than their lesser-educated counterparts, but the decline in independent living since the recovery began is apparent in young adults with a college education and those without one.

What’s certain is that millennials’ penchant for living at home is stifling the housing market come-back. “The growing young adult population has not fueled demand for housing units and the furnishings, telecom and cable installations and other ancillary purchases that accompany newly formed households,” Pew said.

TIME Research

Millennials Now Have Jobs But Still Live With Their Parents

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Getty Images

A Pew study finds the perplexing pattern has affected the housing industry

Halfway through this decade and nearly seven years after the Great Recession, Millennials are bouncing back—sort of.

In a new study released by Pew, researchers find that while Millennials—people who were born after 1981—are back to the pre-recession era unemployment levels of 7.7%, they haven’t been able to establish themselves as adults in other ways, like owning a home or getting married.

Richard Fry, an economist and lead author of the study, describes the situation as Millennials’ “failure to launch.” “I think the core is a bit of a puzzle with one clear consequence,” Fry told TIME. “There’s good news: the group that was hit the hardest—young adults—are now getting full-time jobs and earnings are tracking upwards. But the surprise is that with the recovery in the labor market, there are fewer young adults living independently.” (Living independently here is defined as heading a household; in other words, owning a home.)

When the recession hit, young people moved back into their parents’ house in droves, unemployed and without much hope for any future work. The thought process was that once the economy improved and Millennials returned to work, they’d scoot out of their parents lair.

But that hasn’t been the case, and economists aren’t sure why.

“Is it a good thing or a bad thing? I don’t know,” Fry said. He was also the author of a study three years ago that explored Millennials living and work situations using 2012 data, and he thought then that the explanation was clear. “My thought was, ‘Yeah, that’s true, the job market is crummy,'” he said. “My expectation was that as the labor market improves, more young people will strike out on their own, but that’s not the case.”

About 42.2 million 18-to-34 year olds are living away from home this year; 2007 numbers were just above 2015’s independent young adult population at 42.7 million. There are a few common characteristics of these Millennial householders; they are more likely to be women (72% compared to their male counterparts) and college-educated (86% of those with bachelors degrees were living independently compared to 75% of the same peer group holding only a high school education). Fry points to women getting in permanent romantic relationships earlier that either lead to marriage or cohabitation as the cause of this gender difference.

The consequences of Millennials still living at home go far beyond the household dynamics of adult children being at home with parents. Consider the housing sector, which has not recovered from the 2008 economic tumble. If more young adults had decided to take on home ownership, the economy may have improved more.

So how are Millennials most likely living if they’re not living at home? Probably with a roommate, or doubled up with a fellow adult who is not their spouse or partner, data suggests.

But having a roommate or living at home have real demographic effects for the future, Fry says. He goes back to two key facts: that people living independently tend to be better educated and that college educated people tend to delay marriage or not marry at all (though even Millennials with a high school education are not getting married as much as they used to.) That means that less educated Millennials are facing consequences in not just the job market, but beyond.

“There’s less sorting—that when the less educated do marry, they marry others who are also less educated,” he said. “That’s going to impact household income and economic wellbeing. That’s going to affect economic outcomes.”

MONEY buying a home

Why Millennials Are Better Off Waiting 10 Years to Buy a Home

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Daniel Grill—Getty Images

A new Fed study finds most young adults require years of saving before they can afford home ownership.

In a report sure to make the real estate industry cringe, researchers at the St. Louis Federal Reserve suggest most young adults postpone home ownership for years, if not a decade or longer. This comes as the housing market is beginning to boom again and older Millennials, a group that generally has eschewed homeownership, shows signs of wanting to take the plunge.

Can this be sound advice? Home ownership has been a reliable long-term wealth builder for generations. Often home equity is retirees’ largest asset and, along with Social Security, enough for them to live out their days financially secure.

The housing bust changed the calculus. Flipping and other short-term strategies, and risky nothing-down and no-documentation mortgages, contributed mightily to the bust. Yet short-term moves have always been dicey. Properly considered, a home is less an investment than a forced savings plan and place to live. Over time, real estate keeps pace with inflation and a stable, affordable mortgage provides a valuable tax deduction.

The Fed study does not dispute that. It is an examination of age and wealth, and finds that younger families are on track for a lower net worth than all previous living generations. Adjusted for inflation, the median wealth of families headed by someone at least age 62 rose 40% between 1989 and 2013—to $210,000 from $150,000. Meanwhile, median wealth of households headed by someone age 40 to 61 fell 31% to $106,000 and median wealth for younger families fell 28% to $14,000.

Researchers conclude that younger families would be better served by maintaining a personal asset mix that more closely resembles the asset mix of older families—less debt and less real estate relative to their other assets. In other words, stretching for that first home when you have no other savings and little ability to save going forward is a huge mistake.

This “mistake,” by the way, is one plenty of families in previous generations made—and for many it paid off well. What seems to have changed is a greater degree of speculation that leads to a boom-bust pattern in the housing market, one that can wipe you out in the short term if your timing stinks. The Fed researchers write that young people should “delay purchase of a home with its attendant debt burden until it was possible to buy a house that did not make the family’s balance sheet dangerously undiversified and highly leveraged.”

John Bucsek, managing partner of MetLife Solutions Group, finds merit in the Fed’s argument, saying that young families should rent for years for less money than a mortgage would cost. That preserves career flexibility and cuts monthly costs. They should begin saving in a Roth IRA to build long-term wealth through a diversified portfolio. They should also pay down student loans and other debts. Later, when they have more assets, if need be they may withdraw their original Roth IRA investment plus up to $10,000 penalty free for a first-time home purchase.

That is sound strategy, and would have been especially valuable advice before the housing collapse. Today the housing market is on firmer footing. Banks remain careful about extending credit, and in June the median price for an existing home rose 6.5% to a record $236,400, at last topping the previous high of $230,400 set in July 2006—before the bust. The pace of homes being sold is the strongest since 2007. All this suggests the market is in full recovery, though the prominent economist Robert Shiller, as ever, is raising red flags about a bubble.

At the same time, Millennials, a generation that pioneered the sharing economy and many of whom have claimed to never want to own anything, are poised to enter the housing market. A Digital Risk survey found that 70% of 18-to-34 year olds are interested in purchasing a home in the next five years. If they act on that interest, it will further boost the housing recovery—and if they commit to staying their house and saving a bit on the side, they will begin to build long-term wealth much like their parents and grandparents.

Read next: These States Offer the Most Help for Buying a Home

MONEY Travel

Millennials Will Pay More For These Air-Travel Extras

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Ben Pipe Photography—Getty Images/Cultura RF

Young flyers are more willing than older travelers to pony up for these perks.

Air travelers complain a lot about being nickel and dimed all along their trip, but younger flyers especially say they are happy to pay up if it makes the journey easier.

A new report from flight update app company FlightView finds that 75% of millennials, compared with 60% of all flyers, are willing to pay extra for certain conveniences.

The survey of about 2,300 people shows that travelers care most about reducing baggage headaches and using mobile devices freely.

Of those willing to pay anything at all, 53% said they’d pay for special RFID baggage tags that use radio frequency technology to reduce the likelihood of lost suitcases, while 40% said they would pay to check luggage at airport gates so as not to have to lug bags around airport restaurants (and bathrooms).

Hate waiting forever by the carousel for your bag? You aren’t alone: 37% said they would pay for priority baggage claim.

As for in-flight bonuses, while only about one half of all respondents said they would pay extra for amenities, 60% of millennials were open to spending more in the air.

The most popular in-flight perks were related to technology: 64% of those willing to pay anything said they would purchase high-performance WiFi with enough bandwidth to stream video, while 50% said they would pay for in-seat electrical outlets for charging devices.

Only 22% said they would pay extra to exit the plane faster upon landing.

A spokesperson for FlightView says the distribution of millennials’ preferences for each perk mirrors that of all survey respondents.

Read More: 10 Free Airline Amenities That Make Flying Fun Again

MONEY Millennials

Why Millennials Aren’t Saving More for Retirement

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Digital Vision.—Getty Images

Their savings habits are better than boomers, but one big expense is holding them back.

Another Millennial myth may be biting the dust. Apparently, millennials have better retirement saving habits than Baby Boomers.

Millennials save 8% of their paycheck for retirement, according to a recent survey from T. Rowe Price. Baby boomers are just slightly ahead at 9%.

The only reason millennials aren’t saving even more is that they have college debt to pay off and do not earn much money yet, according to Anne Coveney, senior manager of retirement thought leadership at T. Rowe Price. The median personal income of millennials is just $57,000.

“Their circumstances may be somewhat driving their behaviors,” says Coveney. “When they have the means to do the right thing, it appears that they often do.”

Indeed, Millennials track expenses more carefully than boomers (75% vs. 64%). And 67% of Millennials stick to a budget. That’s better than the 55% of boomers. Meanwhile, 88% of millennials say they are pretty good at living within their means.

To be fair, the boomers are saving a higher percentage of their salary for retirement than millennials, but twice as many millennials have upped their retirement savings in the last 12 months, T. Rowe Price says.

The retirement data says a lot about the mindset of millennials. Many baby boomers started their careers with defined-benefit pension plans. That’s not even a phrase millennials have heard before.

Plenty of millennials expect Social Security to go bankrupt before they retire. They know they are on their own for retirement. And while, on average, they are not saving as much as allowed by law, the data suggest that as their ability to do so improves, they will take full advantage of corporate matching plans in their jobs.

“They are exhibiting financial discipline in managing spending and are defying stereotypes that this generation is prone to spend-thrift, short-sighted thinking,” Coveney notes.

Millennials also don’t need as much hand-holding as previous generations. They want advice and are even getting it from what have been called robo-advisors – something only a very small fraction of baby boomers are willing to do. (Robo-advisors use a computer algorithm to pick a portfolio of index funds and charge much lower management fees than conventional brokers.)

Case in point: at automated investment service Wealthfront, 60% of clients are under age 35, according to the company. Only 10% are over age 50.

Millennials are counting their money carefully, so it would be wise not to count them out as retirement savers.

MONEY Millennials

5 Steps Millennials Can Take Now for a Richer Retirement

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Jamie Grill—Getty Images

Start now, and you'll have an even bigger nest egg when you stop working.

A couple of years ago, Emilie Hunt had to go to the emergency room with a stomach virus. The bill took a huge chunk of money out of her savings, more than $800, and kept her from saving for a couple of months.

“I’m really bad at planning for unexpected expenses,” she said. “And instead of cutting other expenses, often the first money I cut is what would go into savings.”

Hunt, an executive assistant at a private equity firm in New York City puts $150, about 2% of her salary, automatically into a retirement plan every month. Her biggest expenses are rent, student loans and food, in that order.

She makes a budget, but doesn’t necessarily stick to it.

“I don’t feel that I’m in trouble,” she said. “But I feel like I’m not growing my savings at the rate I’d like to.”

Many millennials like Hunt are saving for retirement, but not enough. They put away an average of 8% of their salary for retirement, according to investment firm T. Rowe Price’s Retirement Saving & Spending Study, which looked at 1,505 millennials with 401(k)s.

That’s a lot less than the minimum 15% that most experts recommend.

So what can millennials do to save more for retirement? Here are five tips.

Cut Costs

Before you sign a lease or buy a car, think about cheaper options. Housing and transportation are the two biggest costs for most people and significant commitments of your future income, said Stuart Ritter, senior financial planning analyst at T. Rowe Price. A small change can give you a lot of financial freedom.

“There’s a big difference between buying an expensive car, riding a bike or sharing a ride,” said Ritter.

Make a Budget

Track your spending for at least a month. That is the first step for exercising restraint. Otherwise, your spending can sneak up on you. A $3 Starbucks coffee a day adds up.

Categorize your expenses as “needs” and “wants,” and distinguish between the two, said Mark Kantrowitz, senior vice president & publisher at Edvisors.com, a site that provides financial advice for students and families.

“Cable TV is not a need, it’s a luxury,” he said.

If you think it’s overwhelming to make a budget for all your expenses, pick a couple of categories and track them, said Ritter. Apps like Mint, a unit of Intuit, and LevelMoney help you track and analyze your spending habits.

Adjustments

Try increasing your savings for three months. Most people adjust to it, according to Ritter, who warns against having an “all-or-nothing mentality.”

“Some people think they can never go out with their friends if they save more for retirement,” Ritter said. “But maybe it means that you go out two times a week instead of three.”

Be careful with how much you spend after college.

“When people start making a bigger salary, their lifestyle often inflates and suddenly they are living paycheck to paycheck,” said Jason Vitug, founder and chief executive of Phroogal, a company that provides financial advice for millennials.

Phone bills, Netflix and magazine subscriptions are some of the expenses you can reduce, he said.

Save While Paying Off Loans

Student loan debt prevents some millennials from saving, according to T. Rowe Price’s study. But it’s important to prioritize both saving and paying off loans.

First, build an emergency fund of three to six months of salary. Then prioritize paying off your loans, said Kantrowitz. Start by paying off the loan with the highest interest rate.

Make it Automatic

While you are working, you should save a fifth of your salary so that you have money for the last fifth of your life, Kantrowitz advises.

Tell your employer how much you want to save and have the money automatically taken out of your paycheck. That will help you get used to having less money for spending.

Make sure you maximize your employer match, which can be upwards of 6 percent. “That’s free money,” said Kantrowitz.

MONEY annuities

Why Millennials May Be Risking Their Retirements with This Investment

Young investors are being targeted by salespeople pushing a complex annuity with a tempting guarantee.

Memo to Millennials: Don’t be surprised if an adviser or insurance salesperson suggests that your retirement savings strategy include a type of annuity that’s guaranteed not to lose money. My advice if you’re on the receiving end of that pitch: Walk the other way.

It’s hardly news that many young investors are wary of the stock market. So I was hardly taken aback when a recent survey by the Indexed Annuity Leadership Council (IALC) found that more than twice as many investors age 18 to 34 described their retirement investing strategy as conservative as opposed to aggressive. But another stat highlighted in IALC’s press release did grab my attention: namely, 52% of Millennials—more than any other age group—said they were interested in fixed indexed annuities.

Really? Fixed indexed annuities aren’t exactly a mainstream investment. And to the extent you do hear about them, they’re usually associated with older investors looking to preserve capital in or near retirement. So I was surprised that Millennials would be familiar with them at all.

And in fact they’re probably not. You see, the IALC survey didn’t actually mention fixed indexed annuities. Rather, it asked Millennials if they would be interested in an investment that may not have as high returns as the stock market, but would provide guaranteed payments in retirement and guarantee that they would not lose money.

I can’t help but wonder, however, whether those young investors would have been less enthusiastic if they were aware of some of the less appealing aspects of fixed indexed annuities, such as the fact that many levy steep surrender charges, which I’ve seen go as high as 18%, if you withdraw your money soon after investing. They’re also incredibly complicated, starting with the arcane methods they use to calculate returns (daily average, annual point-to-point, monthly point-to-point). And while they allow you to participate in market gains on a tax-deferred basis while protecting you from losses—and offer a minimum guaranteed return, typically 1% to 2% these days—they can seriously limit your upside. Fixed indexed annuities typically impose annual “caps,” “participation rates” or “spreads” that reduce the amount of the market, or benchmark, return you actually receive. So, for example, if your fixed indexed annuity is tied to the S&P 500 index and that index rises 10% or 15% in a given year, you may be credited with a return of, say, 5%.

Don’t take my word for these drawbacks, though. Check out FINRA’s Investor Alert on such annuities, which describes them as “anything but easy to understand” and notes that it’s difficult to compare one to another “because of the variety and complexity of the methods used to credit interest.”

But even if you’re able to wade through such complexities and make an informed choice, should you put your retirement savings into a such a vehicle if you’re in your 20s or 30s? I don’t think so. After all, if you’ve got upwards of 30 or 40 years until you retire, your savings stash has plenty of time to recuperate from any market meltdowns between now and retirement. (Besides, if you’re really anxious about short-term market setbacks, you can easily deal with that anxiety by scaling back the proportion of your savings you keep in stocks vs. bonds.)

Better to create a mix of low-cost stock and bond index funds that jibes with your tolerance for risk and allows you to fully participate in the financial markets’ long-term gains than to opt for an investment that severely limits your upside in return for providing more protection from periodic setbacks than you really need. Or to put it another way, why end up with a stunted nest egg at retirement to insulate yourself from a threat that, viewed over a time horizon of 30 or 40 years, isn’t as ominous as it may seem?

When I talked to Jim Poolman, a former North Dakota insurance commissioner and the executive director of IALC, he did note that Millennials shouldn’t be putting all their retirement savings into fixed indexed annuities. Rather, he says fixed indexed annuities can be “part of a balanced portfolio” that would include traditional investments, such as stock and bond funds in a 401(k). But as much as I like the idea of balance and diversification, I’m not convinced even that is a good strategy. I mean, if you’ve funded your 401(k) and are looking to invest even more for retirement outside your plan, what’s the point of choosing an investment that not only restricts long-term growth potential but that could leave you facing hefty surrender charges (plus a 10% tax penalty if you’re under age 59 1/2), should you need to access those funds?

I’m not anti-annuity. I’ve long believed that certain types of annuities can often play a valuable role for people in or nearing retirement by providing guaranteed lifetime retirement income regardless of what’s going on in the financial markets. But if you’re in your 20s or 30s, you should focus on investing your savings in a way that gives you the best shot at growing your nest egg over the long-term, not obsessing about the market’s ups and downs.

Walter Updegrave is the editor of RealDealRetirement.com. If you have a question on retirement or investing that you would like Walter to answer online, send it to him at walter@realdealretirement.com.

More From RealDealRetirement.com

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5 Tips For Choosing The Best Annuity For Lifetime Retirement Income

How Boomers Can Help Millennials Better Prepare For Retirement

MONEY Millennials

If You Have $500, You Can Start Investing. But Should You?

woman counting her savings
Getty Images

Here's better idea: Build up a bank account first.

Still trying to get started saving for retirement? Your task just got a little easier.

Online financial adviser Wealthfront is now offering people with as little as $500 to invest a convenient and cheap way to build a portfolio of stocks and bonds. And for accounts up to $10,000, the service is free.

That’s sounds like a great deal, and in some ways it is. Of course, Wealthfront isn’t doing this to just be nice—they’re hoping to turn you into a paying client down the road. And while it’s great to get started on retirement saving early, if all you have to to put away right now is $500, you may have priorities besides putting money in the stock market.

Wealthfront is one of a new breed of web-based financial advisers, often called roboadvisers, who aim to automate work once performed by flesh-and-blood stock brokers and planners. The service, which has grabbed $2.5 billion in assets since it was founded in 2008, helps investors purchase a portfolio of low-cost, exchange-traded index funds. The mix is based on an investor’s age and answers to online questions about risk tolerance.

Wealthfront’s service was already free for investors with less than $10,000. (Investors with more money pay an annual fee based on 0.25% of the amount invested above the $10,000 threshold. All investors pay fees for the underlying funds.) But while it had previously required investors commit at least $5,000, the company on Tuesday lowered that threshold to $500.

Wealthfront isn’t alone. A similar service called Betterment has no minimum, although investors with less than $10,000 pay $3 a month, or 0.35% a year if they sign up to have $100 a month transferred in from a bank account.

Both companies are fighting aggressively to capture young investors, even if those customers don’t pay much at first. Here’s why: Millennials are already the biggest cohort in the workforce. One recent study predicted that as much as $30 trillion in wealth will trickle from boomers to millennials over the next several decades. Online advisers are looking to sign up young people now with the hope of collecting the real money later as their assets grow.

Wealthfront’s diversified, index-fund based approach is very sensible. But for people just beginning to save, most financial planners suggest your first priority for money outside your 401(k) is to build an emergency savings fund, ideally one large enough to cover six months of living expenses, in case you lose your job or face a health emergency.

That money should be in something safe, like a simple bank account. Banks do have their flaws: Wealthfront chief executive Adam Nash recently wrote an essay on Medium touting his service over checking accounts that slap investors with with fees for overdrafts and account maintenance. But it’s still possible to find a free bank account. Our annual Best Banks feature recommends both checking and savings options.

Investment portfolios are volatile—don’t forget stocks more than lost half their value in the last recession, just as many people lost their jobs. Meanwhile, money in a savings or checking account, while it won’t earn much at today’s interest rates, will always be there when you need it.

The upshot: If you’re financially secure and looking to sock away an extra $500 or $1,000 mostly as a way to build your saving habit, Wealthfront’s new offer is worth considering. If that $500 is really all you’ve got, start with something simple and safer. And then keep going.

TIME society

A Letter to Millennials: Don’t Sleep Through the Revolution

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Getty Images

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

It is time to wake up and begin to think about a digital renaissance

In my last letter, I told you there was a time in the late ’60s when the most critically acclaimed movies and music were also the best selling. The Beatles’s Sgt. Pepper album or Francis Coppola’s Godfather film were just two examples. I said that that is not happening anymore, and I wanted to explore with you why this change occurred. Because I spent the first 30 years of my life producing music, movies, and TV, this question matters to me, and I think it should matter to you. So I want to explore the idea that the last 20 years of technological progress — the digital revolution — have devalued the role of the creative artist in our society.

I undertake this question with both optimism and humility. Optimism because I believe in the power of rock and roll or movies to change lives. Certainly witnessing Bob Dylan go electric at the Newport Folk Festival in 1965 changed this Princeton freshman who was intent on being a lawyer into a passionate follower of the Rock and Roll Circus who managed to make a good living from the entertainment business for the rest of his life. My optimism also showed itself in 1996 when I helped found the first streaming video on demand service, Intertainer. Anyone crazy enough to found a service that needed broadband in 1996 had to be an optimist. That led to humility, because the diffusion of broadband was much slower than I thought, so I know that predicting the future is a humble man’s game.

In the last few years I have run the Annenberg Innovation Lab at the University of Southern California. At the risk of biting the hand that feeds me, I confess that I often feel like a cork tossed into a rushing technology stream. While I have no doubt of the wonders of the Internet revolution, I think it’s time to take stock of where this stream is carrying us.

We have become convinced that only machines and corporations make the future, but I don’t think that is true. In thinking about the role of the humanist in our technology-driven future, I was drawn to a sermon Martin Luther King preached at the National Cathedral in Washington two weeks before he was killed. At the outset he told the story of how Rip Van Winkle had passed a sign with a picture of King George III of England on the way up the mountain where he fell into a long sleep. When he came down the mountain, the same sign bore a picture of George Washington.

This reveals that the most striking thing about the story of Rip Van Winkle is not merely that Rip slept 20 years, but that he slept through a revolution. While he was peacefully snoring up in the mountain, a revolution was taking place that would change the course of history — and Rip knew nothing about it. He was asleep. Yes, he slept through a revolution.

I doubt that anyone would quarrel with the notion that the last 20 years of technological disruption have constituted a revolution, but I want to understand just who has been sleeping through this revolution and who has been awake, creating the moral, political, and technical architecture of the world our children will inhabit.

The beginnings of the “cyber revolution” that King referenced in his sermon were already moving forward in 1968 as he was speaking. The origins of that technology revolution were clearly located in the counter-culture, as Fred Turner and John Markoff have shown, and the idea (in Nicholas Negroponte’s words) was to “decentralize control and harmonize people.” That the earliest of networks, like the Whole Earth Lectronic Link (WELL) organized by Stewart Brand, grew directly out of the hippie culture was a natural progression from both the political and cultural growth of ’60s counter-culture.

But within 20 years, starting with Peter Thiel’s cohort at Stanford University, the organizing philosophy of Silicon Valley was far more based on the radical libertarian ideology of Ayn Rand than the commune-based notions of Ken Kesey and Stewart Brand. Thiel, the founder of PayPal, an early investor in Facebook, and the godfather of the PayPal mafia that currently rules Silicon Valley, has been clear about his philosophy.

He stated, “I no longer believe that freedom and democracy are compatible,” his reasoning being: “Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of ‘capitalist democracy’ into an oxymoron.”

This is a pretty extraordinary statement, and I have reread the interview he gave to the Cato Institute several times. It appears that most women, in Thiel’s judgment, fall into Ayn Rand’s notion of “takers” as opposed to Thiel’s vaunted male “makers.” So for Thiel, in a true “capitalist democracy” only the makers should get to vote, and the women and the welfare recipients will take what the makers chose to give them.

Whew! It gets worse. Thiel has made it clear that his preference (along with Google CEO Larry Page) for a “free cities” model — in which polities are privately owned and unregulated by states — would be an ideal way for capitalists to avoid the “mob mentality” of democracy. He has even suggested that companies could set themselves up off shore (out of the reach of government) on platforms that would give them true freedom to operate.

Like Amazon’s Jeff Bezos, he has built his fortune on enterprises that were not taxed or regulated. He also does not believe in competition, havingstated in the Wall Street Journal that “competition is for losers. If you want to create and capture lasting value, look to build a monopoly.”

Peter Thiel, Larry Page, Jeff Bezos, and Mark Zuckerberg have not been asleep at the revolution, as their inclusion near the top of the Forbes 400 list of America’s billionaires will attest.

Since the introduction of Napster in 2000, global recorded music revenues have fallen from $21 billion to $7 billion per year. Newspaper ad revenue has fallen from $65 billion in 2000 to $18 billion in 2011. Book publisher operating profits have fallen by 40 percent, and the revenue from DVD sales of movies and TV (of the top 100 titles) has fallen from $7 billion to $2.3 billion.

The astonishing fact of the precipitous declines in revenue has nothing to do with the idea that people are listening to less music or watching fewer movies and TV shows. In fact, all surveys point to the opposite. Consumption of all forms of media is rising. So where did the money go? Two places: into the pockets of Digital Monopolists and Digital Thieves.

While the revenues of movie, music and news purveyors were falling rapidly, the revenues of the “internet platform” providers were exploding. Google’s revenue went from $1.2 billion in 2001 to $66 billion in 2014. Amazon went from $4.8 billion in 2002 to $89 billion in 2014. Apple went from $7 billion in2002 to $199 billion in 2014. One could argue that a massive reallocation in the order of $50 billion a year from creators and owners of content to platform owners has taken place since 2000. Make no mistake, while the movie studios, record companies, newspapers and magazines operate in a very competitive environment, the platform providers are monopolists or, at least, oligopolists. Competition is for suckers, and by now Negroponte’s notion of decentralization and harmony has been replaced by Thiel’s beneficent monopoly.

But this does not account for the role of the Digital Bandits. There is a wonderful picture of Kim Dotcom, who made $200 million in two years off of the stolen music and video of countless artists on his Megaupload pirate site. In the picture, the fat German thief stands on a picturesque beach with his “Playmate of the Year” girlfriend sprawled on the sand in the foreground and his 200-foot mega yacht in the background. Kim, in an attempt to fight the lawsuits against him, has appropriated the message of Martin Luther King, assuming the stance of the man who freed everyone from the slavery of having to pay for creative works. Exactly how the hard work of artists got exempted from the notions of the market economy escapes me, but for Kim to pose as some new sort of freedom rider brings us back to the whole fallacy of the libertarian economy. Ayn Rand’s most famous quote is “the question isn’t who is going to let me, it’s who is going to stop me.” This is how Kim Dotcom has functioned from day one.

The larger question then becomes, who enables the Kim Dotcoms of the world? Type into your Google search box the words “watch (your favorite movie) online free” and you will have the answer.

Whether it is illicit drugs, stolen music, or jihadist lessons on how to blow up an airplane, Google, with a 70 percent market share of all global searches, is the beginning point of a great deal of online criminal activity.

Of course, for most of your generation, the idea of getting your music or movies for free from pirates like Kim Dotcom doesn’t seem like a big deal. But you are studying at USC to (hopefully) become the next generation of journalists, filmmakers, and musicians, so the future of the business is in your hands. Somehow you have to let go of the idea that this is a victimless crime. As I said to you in my last letter, I’m not worried about Jay Z or Beyoncé. I’m worried about the middle class musician, the journeyman that used to be able to ply his trade and make a living selling 25,000 CDs. That does not exist anymore.

But perhaps this tolerance for criminals like Kim Dotcom is part of a larger problem. As the Associate Chancellor of UC Berkeley, Nil Gilman, has written, we are plagued by a twin insurgency: “From below comes a series of interconnected criminal insurgencies that route around states and seek ways to empower and enrich themselves in the shadow of the global economy. From above comes the plutocratic insurgency, in which globalized elites seek to disengage from traditional national obligations and responsibilities.”

Just how we distinguish between the criminal, the warlord, and the rogue state actor will become harder, as Robert Kaplan pointed out many years ago in his prescient book, The Coming Anarchy. What was the nature of the massive hack on Sony this fall? Will we ever know if it was a state-sponsored act or that of an angry laid-off employee? The on-rush of the much-heralded “Internet of Things” will make the possibilities of cyber crime even more profitable. Imagine the now-prevalent cyber blackmail (“pay me $1000 to unlock your data”) played out on a larger scale: “Pay me $200 million to bring the Los Angles Department of Water and Power back on line.” Forbeshas reported a software program being sold on the Dark Web that can ostensibly hack into the “connected car” and take over the acceleration and braking functions.

Here we run into the tricky area of free speech. Google says it can filter out child porn from YouTube but not the Jihadist videos from Anwar al-Awlaki that were the entrance point of the Charlie Hebdo terrorists into the al-Awlaki network.

Just where Google draws the line seems important. Should they block al-Awlaki’s Inspire online magazine, which last month published detailed instructions on how to build a bomb that could pass through airport screening undetected? I don’t really have the answers, but I hope we can begin to have a dialogue around this issue.

Abraham Lincoln supposedly was the first to say, “The Constitution is not a suicide pact.” Certainly the fact that there are 3000 ISIS videos on YouTube and 10,000 ISIS accounts on Twitter should give you pause. Clearly this is a tricky area, and I don’t believe this is necessarily a matter for government regulation.

The use of their automated content identification technology could be employed to filter content being uploaded to their servers before it is ever displayed on YouTube. But then they couldn’t be selling paper towels in front of ISIS videos.

At this point you might be asking why the loss of billions in the media and entertainment sectors is worth worrying about in the face of the benefits ubiquitous Internet technology has brought you. My feeling is that media is just the canary in the coal mine, and that in the next 20 years, millions of the jobs you are training for might be automated. The Economist recently ran an article in which they projected the probability of your job being taken by a robot in that time period. Citing work from two Oxford University economists, they wrote that “jobs are at a high risk of being automated in 47 percent of the occupational categories into which work is customarily sorted.”

Larry Summers recently said that those who think that the answer to the jobs crisis is just higher education are “whistling past the graveyard.”

What a life awaits you. You can loan your car out on Relay Rides or become an Uber driver. If you can afford a house, you can rent your extra room out on Airbnb and find extra work on TaskRabbit.

We are only a few years into the sharing economy, but one thing is clear: As with Google, most of the economic gains will flow to those who own the platform rather than to those who do the work. Uber is currently valued at $41.2 billion, making it one of the 150 largest corporations in the world. That’s a capitalization larger that Delta Airlines or FedEx, all built on Ayn Rand’s motto: “The question isn’t who is going to let me, it’s who is going to stop me.”

With such economic power comes political power. Uber recently hired Obama campaign svengali David Plouffe to help it navigate the political lobbying waters of Washington, taking a page from Google’s bible. Google outspends all but a few financial and military firms in its lobbying efforts. The main financial backers of the Libertarian movement, the Koch brothers, have vowed to spend $900 million in the 2016 election cycle to ensure that the “no regulation, no taxes” principles of the movement are sacrosanct in the corridors of power.

The digital monopolists are not above using the rhetoric of libertarianism to spread the message that they alone are the guardians of freedom in the world. When the media companies tried (in an admittedly ham-handed fashion) to pass a law (Stop Online Piracy Act) that would require Google to block sites that were making millions off of stolen content, Google unleashed an online campaign stating this would amount to censorship. The uproar from the crowd quickly killed the bill.

Perhaps it is time to ask the question of who benefits from this technological revolution. Who is awake and steering the boat, and who is asleep below decks? As The Economist pointed out, the ability to substitute capital for labor has profound implications for the future of our society. In early 1929, before the stock market crash that set off the Great Depression, the top 1 percent earned 23.9 percent of national income. By 1976, because of 30 years of changes in tax policy as well as regulation, the 1 precent earned 8.9 percent of national income. But the Reagan era reversed both the tax and regulatory policies that had brought on more income equality, and today the top 1 percent earn 24.2 percent of national income.

What is clearly visible is that the great productivity gains brought on by technology, which used to benefit the ordinary workers’ paycheck, now only flow to the owners of capital. The work of Thomas Pinketty, the French economist, shows that this growing income inequality will only get worse in the coming years. The irony is the John Maynard Keynes envisioned this substitution of capital for labor in the ’30s but thought that the result would be an average work week of 15 hours, with a great deal of paid leisure for the common man.

Some have suggested a guaranteed income, but without some discussion, we risk a kind of social unrest that we have not experienced since the ’60s.

If the technology revolution has failed to bring the average worker increased prosperity, it has also created a vast new set of industries built on mining that worker’s most private data, with questionable return benefits. By the end of 2016 there will be 5 billion smartphones in the world, every one of them a vast treasure trove of personal data that can be mined by both the surveillance state and the corporate data brokers who sell your digital life for immense profits. This is where Martin Luther King’s “asleep at the revolution” metaphor seems most telling. Clearly the current corporate narrative about privacy is that it is a sort of currency to be traded to corporations in return for innovation. But Georgetown University Professor Julie Cohen argues that privacy has meaning in and of itself. Jonathan Sadowski describes her argument in The Atlantic:

What Cohen means is that since life and contexts are always changing, privacy cannot be reductively conceived as one specific type of thing. It is better understood as an important buffer that gives us space to develop an identity that is somewhat separate from the surveillance, judgment, and values of our society and culture. Privacy is crucial for helping us manage all of these pressures — pressures that shape the type of person we are — and for “creating spaces for play and the work of self-[development].” Cohen argues that this self-development allows us to discover what type of society we want and what we should do to get there, both factors that are key to living a fulfilled life.

Do you think your shrinking zone of privacy is altering your behavior? Are the pressures of social media keeping us from finding this fulfilled, authentic life? What keeps us asleep at the revolution? Could it be that drinking from the firehose of big data is a sort of deep distraction that prevents us from even asking the humanistic questions of what makes for an examined, authentic life? In the ’30s Aldous Huxley imagined a future in his Brave New World — a future in which the average citizen would take his dose of Soma (a kind of hybrid Prozac/Viagra) and go out to the Feelies, a form of entertainment so all-engrossing that the “prole” never had any sense that he was not a free human. Chris Sullentrop of the New York Times recently reported that several experts told him the virtual reality porn was going to be the killer app. Huxley would smile.

After I gave a speech on this topic, I got a note from Jimmy Bartz, the minister at the small Episcopal Church, Thad’s, that I attend. He, too, agrees that we are asleep at a revolution:

However, I don’t believe enough people can be inspired to endure what it will take to change things if they are “asleep.” You mention the uptick in opiate addiction. There are also soooo many more people on mood altering medication (some need it, but not as many as take it), then, we have food, credit, media, devices. Our ability to endure what we’d have to endure to create the change you espouse (and I espouse) has atrophied to the point that we don’t even have consciousness around it. There’s a level of “insobriety” we’ve never experienced before — data, food, pharma, credit — we’re so doped up on that stuff that we’ll never have the will to legislate the change, and Washington’s too doped up on cash to have the will to do the right thing.

This sense that we are too doped up to care is distressing, but what’s more worrying is that we are building whole sectors of the digital economy on the concept of addiction. I recently picked up a book called Hooked: How to Build Habit Forming Products, in which the author shows how you too can build the latest Snapchat. The schematic of a “trigger, action, reward, investment” sequence is curiously close to that of the Skinner box we all studied in Psych 101.

Like the poor lab rat in pursuit of happiness clicking on the bar for a reward pellet, we spend hours looking for the “like” reward on our social networks. Those with the most likes can turn it into currency, as was demonstrated at the myriad “gifting suites” at the Sundance Film Festival, where popular YouTubers like iJustine collected thousands of dollars worth of free merchandise in exchange for posting about the swag on their social networks. iJustine, whose fames stems from having posted a video on YouTube about her 300-page iPhone bill, noted to the New York Times, “I love products, and I love sharing if I love something. Like, you can probably guarantee that it’s going to be posted, especially if I love it.”

It would be easy to diss iJustine’s blurring of the line between her own opinion and what she is getting paid to like if it weren’t the basic currency of the Internet age. What is any hip hop star but a walking product placement opportunity? How would the TV and movie business survive without “brand integration” dollars to top up the budget? And how would Vox, BuzzFeed or even the vaunted Atlantic survive without the “native advertising” that totally blurs the line between editorial content and paid advertising? If indeed the author of Hooked is on to something, and we really are building powerful addictions to social network apps, then is Peter Thiel’s almost-spiritual commitment to “liberty” really the same as Thomas Jefferson’s “life, liberty and the pursuit of happiness”? I don’t think so.

Here I am just a guilty as you. I surrender all of my personal data to Facebook in return for the ability to post my vacation photos to my friends.

I have no doubt that innovative developers can continue to build addictive products. Just try to walk down any sidewalk in this university while you constantly dodge people staring at their smartphones. I’ve told you that the Innovation Lab has studied Twitter and politics, and what we found was pretty disturbing. The anonymity that Twitter provides a shield that brings out the worst in humans. Plato told a tale of the Ring of Gyges that when put on would render you invisible. He asked the question: If we were shielded from the consequences of our actions, how would that change the way we act? We know the answer. As David Brooks says, we have created a “coliseum culture” in which some new celebrity gets thrown to the lions on a weekly basis. Of course, I know that writing you to resist the instant riches that might flow to you if you invent the newest addictive app, like Yik Yak, which allows students to shame each other anonymously, is probably a fool’s errand.

My deeper question comes from my position as a professor here for the last 12 years, where I have watched the lure of Silicon Valley grow stronger. If the best and the brightest of you are drawn to building addictive apps rather than making great journalism, important films, or literature that survives the test of time, will we as a society be ultimately impoverished? I was lucky enough to be involved with some artists like Bob Dylan, The Band, George Harrison, and Martin Scorsese, whose work will surely stand the test of time. I’m not sure I know what the implications are of the role-model shift from rebel filmmaker to software coder.

This brings me back to the question of what the tech plutocrats mean by freedom. Martin Luther King led the March on Washington for “jobs and Freedom.” It’s obvious now that the new freedom brought to us by the libertarian elite will not come with jobs. The fact that Facebook generates revenues of $8 billion with less than 9000 employees speaks volumes. Is Peter Thiel’s idea of corporations, free to reap monopoly profits free from government regulation, what we want for our country? Thiel’s icon Ayn Rand defines freedom as “to ask nothing. To expect nothing. To depend on nothing.” How far is this from Jefferson’s great inspiration, the Greek philosopher Epicurus, who defines the good life in these terms?

  • The company of good friends.
  • The freedom and autonomy to enjoy meaningful work.
  • The willingness to live an examined life with a core faith or philosophy.

I worry that our universities are being turned into trade schools in the pursuit of the almighty tech dollar. Are we forsaking the humanities and a basic liberal arts education all in promise to prepare students for the shark tank that awaits them in Silicon Valley or on Wall Street? As I said at the outset, I have no answers, but another phrase from Dr. King’s sermon calls out to me: “Our scientific power has outrun our spiritual power. We have guided missiles and unguided men.”

Let us not assume that this technological revolution we are living through has but one inevitable outcome. History is made by man, not by corporations or machines. It is time to wake up and begin to think about a digital renaissance. As my colleague Ethan Zuckerman said, “It’s obvious now what we did was a fiasco, so let me remind you that what we wanted to do was something brave and noble.” Your generation does not need to surrender to some sort of techno-determinist future. Let’s try and “rewire” (Ethan’s term) the Internet.

This article was originally published by The Aspen Institute on Medium

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