It May Be that Young People have been Paying Attention

This interesting report by NPR challenges the speculation that we may be moving to a cashless society.

“People seem really wary of the mistakes of their parents,” Shahani says. “There is something relieving about, you know, that it’s not lost on them that their parents were deep into debt. And people seem to carry that maybe in the way that their parents’ generation didn’t.”

Many young people, it seems, prefer to use cash rather than plastic.

“The perception that young people rarely use cash is just not correct,” [Doug Conover, an analyst with the Federal Reserve Bank of San Francisco]¬†says.

The Federal Reserve Bank put together a study asking people to keep a diary of their spending. Compared with their elders, young adults (ages 18 to 24) reported using cash more, for nearly half of all purchases.

In the end, of course, it’s an empirical question, not one that can be answered by anecdotes or surveys. The per-capita use of currency has been declining for many years now.* Will that usage level off, or even increase? Time will tell.

 

* [update, later in the day] My assertion about per-capita decrease was challenged by some of my fellow Georgers. I based that statement on some reading I had done lately on the new epayment systems, and articles which cited a trend to less and less currency being used.

This is something that I need to research, because it is fairly complex, but one thing that is clear is that my statement was wrong. At least on the surface. The number of bills in circulation, according to the FRB, has increased at an average annual rate of 6.4% over the past 10 years. Population growth in the US is about 1% per annum.

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