Ethan Miller: The Millennials' financial-literacy crisis

Summer is a time of endings and beginnings. For most of the about  1.8 million people who just graduated from college, this season marks the end of at least 17 years of formal education and the launch of their careers.

My career started a little sooner than that. 

My first real job was as a student organizer during my senior year at American University, in Washington. Right before I graduated two years ago, when I filed my tax return, I was surprised to learn that I owed an extra $1,200 on the less than $13,000 I earned.

Why did I owe the  Internal Revenue Service so much? Because my employer misclassified me as an independent contractor, I owed self-employment taxes in addition to regular income taxes. And, because I had no idea I needed to pay these taxes every quarter, I owed a large lump sum that Tax Day.

It was a big wakeup call. As a 21-year-old soon-to-be college graduate majoring in economics, I was financially illiterate. Neither in college nor at  top-ranked Wootton High School, in Rockville, Md., did I learn how to manage my money beyond making sure I could budget for the basics.

When I talk to my friends about those tax troubles, I find that their grasp of personal finance is just as poor or worse. While we might feel ready to start our careers after graduation, we’re woefully unprepared to look out for ourselves in the economy.

And we aren’t alone. A recent Financial Industry Regulatory Authority (FINRA) study showed that less than a quarter of millennials could correctly answer at least four out of five questions on a basic financial literacy quiz.

As the lackluster recovery from the Great Recession lumbers forward, personal finance matters more than ever. Some 53 million Americans — one in three working people — are freelancers. And according to software company Intuit, 40 percent of the workforce will be freelancing or working as an independent contractor by 2020. That’s a pleasant way of saying they lack job stability.

In the so-called gig economy, juggling multiple part-time or temporary jobs to make ends meet is commonplace. Unless they qualify for health care subsidies, people working in this sector pay for medical insurance completely out of pocket. If they manage to save for retirement, they have to do it alone.

Many millennials are learning the rules of the game as we’re playing it. But we’re actually a lot like our elders. The FINRA study showed significant rates of financial illiteracy among Boomers and Gen Xers as well.

The difference is that our generation faces a job market that’s nothing like the one our parents faced. Combined with the $1.2 trillion of student-loan debt currently owed, that means we need more financial smarts if we’re going to thrive in today’s precarious economy.

More public K-12 school systems across the country need to follow the example of states like Virginia by prioritizing students’ financial literacy and requiring a course in personal finance regardless of whether they’re college-bound or not. Everyone needs to know enough of the basics to fend for themselves.

Of course, if our nation’s employers took the high road and paid fair wages, provided health care and retirement benefits, and gave regular, reliable schedules, we wouldn’t have to rely so much on our own wits to get by. But if our bosses won’t look out for us, we have to look out for ourselves.

Many Millennials are struggling to pay our bills now, much less build a solid future. Just as I’ve had to educate myself financially, my entire generation needs to get up to speed on how the economy works (or doesn’t), so we can join together to make it more sustainable for everyone.

Ethan Miller (, is a labor-rights activist  and a New Economy Maryland Fellow with the Institute for Policy Studies.  This originated at

Llewellyn King: The individual as microbusiness


The genius of Uber is dumbfounding. I’m not talking about what it pays its drivers (not enough), whether it’s putting taxis out of business (it is). I’m talking about the sheer brilliance of unleashing the value stored in the family car. Likewise, Airbnb which isn’t denting the hotels, but is causing tax collectors to go apoplectic.

These Internet companies are unleashing the value that families have had hidden in their driveways and spare bedrooms.What’s next? Your guess is as good as mine. If your guess is right, there are folk over at Google who’d like to talk to you.

Airbnb (which connects people looking for accommodation with those offering it in their homes) may be a tad more exciting than Uber (which puts private car owners in the transportation business) because it is catering to a specific traveler market. Hotels have become so unpredictable in their opportunistic pricing that private travelers are happy to leave them to business travelers who are less price-sensitive.

Then there’s GrubHub, which offers free online ordering from thousands of delivery and takeout restaurants. It may well be the next big thing in the market.

These are three examples of how the Internet, which giveth and taketh away, is reordering the economy. They’re beacons for how the economy might replace the jobs that are being lost to computers. They also offer extra income or full employment for people who don’t have marketable educations: driving a car and keeping a pretty home don’t require college degrees in science.

The nature of work is changing, and one of the consequences is that more of us are becoming self-employed: private contractors.

The Internet enables a large number of artisan skills to be marketed. I’ve just found an online advertisement for a dressmaker. Long before Walmart and “Project Runway,” dressmakers abounded. Women would ask their neighborhood dressmaker to “run up something” for a special occasion or whatever. Mass retailing, plus the difficulty of marketing beyond word-of-mouth, pretty well ended that, but it may come back. Now you may live in Atlanta, but you can order a bridal gown from an Etsy dressmaker in Seattle.

The Red Truck Bakery & Market, housed in an old gas station in Warrenton, Va., sends its Meyer Lemon and other goodies across the country. Artisanal baking meets the Internet.

Years ago, a friend of mine developed a knit teddy bear. It was a beautiful thing; tactile, safe for small children. I don’t recall whether my friend had gotten around to naming her stuffed bruin, but he was a darling -- although I don’t know why stuffed bears have to be male.

Anyway the said unnamed, unsexed, stuffed bear didn’t make it into many young arms because of marketing. The big retailers didn’t want it. Things are very competitive in Bear Land, and Paddington Bear and company don’t want other teddy bears crashing their picnic on the store shelves.

That was more than 30 years ago. Today, Bear X could be sold on the Internet. Now I’d wager the big chain retailers would come begging -- offering the little thing a whole shelf for itself.

The miracle of today is that it could happen differently. The concomitant fact is that we’re going to need more cottage industry and more self-employed contractors because the jobs of yesterday are disappearing, and the companies are less and less inclined to hire permanent staff.

Years ago, the jewelry business moved offshore; now it’s moved to American homes. It’s possible for a creative person to make jewelry at home and sell it online.

A new age of self-employment is at hand. Recently, I’ve worked with two inspiring millennials. One is a gifted and filmmaker, and the other a computer wizard. Both are making a living, and neither has given any serious thought to getting a job in the conventional way.

It’s not the age of small business, but microbusiness: the individual with something to sell, whether it's artisanal furniture or a skill. The millennials seem to know this instinctively, the rest of us are learning it.

Want to hire a veteran journalist who works from home? Call me.

Llewellyn King ( is executive producer and host of "White House Chronicle" on PBS.  He is a long-time  entrepreneur, publisher, editor, writer and international business consultant.