Worse Off Than Their Parents
September 29, 2009 - 2:33pm ET
Popular This Week
Also Worth Reading
Parents usually want their children to have a better life than they did. In the United States, the parents of today's under-30 crowd may be disappointed in that hope.
Throughout last year, they were far more likely than other age groups to have reported unemployment in their households. Labor force participation for those ages 16-24 has decreased to its lowest levels since WWII as a Pew report on the graying work force notes that the recession has tilted the job market towards older workers and those with degrees.
The Pew report also says that nearly a third of the public has come to believe that a degree is necessary to get a good job, whereas 30 years ago, just under half believed that. As former President Clinton pointed out last week at a a press event, the cost of a degree has tripled in recent decades, entirely wiping out the benefits of every government assistance program for college costs.
Those college costs are usually financed instead by loans which are currently not eligible for bankruptcy protection. Loan repayment therefore eats up larger percentages of future earnings which have been plummeting for 8 years for those under 55. Bad timing for anyone who's taken out student loans in recent years in the hopes that the job market would catch up to their education expenditures, and worse luck if their parents' declining wages reduce the possibility for family assistance.
A third of adults under 27 also lack health coverage, with nearly half of those young adults earning less than $14,000 per year. Since wages for most people have been effectively stagnant, they have not kept pace with health coverage increases, and the lower you go down the economic ladder, the truer that is. Especially because there's been an ongoing decline in employer-based coverage that has disproportionately affected low-income workers and the small businesses that create the most jobs.
For another worrying indicator, an AARP poll earlier this year indicated that around a quarter of adults 18 and over are living with parents or in-laws. Another 15 percent were worried they might have to do so soon, while one in seven lived with a sibling.
I don't know about you, but the American Dream I was sold didn't include worse buying power and relative wealth than my blue-collar, high school-educated parents for myself , my peers and those who came after me.
The United States' lack of an industrial policy has been cherished for its ability to bring us ever cheaper consumer goods by steadily outsourcing manufacturing work to other countries. It's been great for people who already had money, it's destroyed opportunities for entry-level blue collar work that leads to a reasonable degree of financial security.
You can see the results in the balance sheets of young adults' households and the narrowing of their prospects. They're being pressured to take on the increasingly bad investment of the typical college education to go after a declining pool of jobs that provide dwindling levels of wage and health benefit compensation.
Maybe we don't have to make all the same things we used to make, but our current and future workforce needs the upward pressure on wages and benefits that entry-level and longstanding manufacturing careers used to create. The United States can't continue to support export-led growth elsewhere in the world if our upcoming workforce continues losing the ability to sell their labor in return for a reasonable standard of living. It stands to reason that if financial capital isn't invested in the American workforce producing things that others want to buy, these trends will only continue as the US spends down the accumulated gains of previous productivity.
If Americans want a better future for their children, there needs to be a concerted effort to make more things in America.
Help us spread the word about these important stories...
Email to a friend
Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future