More on the Economic Hardship of Young Adults

In the US, the cost of the aftermath of the crisis has fallen heavily on young people, mainly due to bad policy responses to the crisis that we’ve described at length as it was happening: the failure to restructure bad loans (particularly mortgages) and impose costs on banks and investors, not just homeowners; the refusal to engage in enough fiscal spending, not just during the crisis but in deficit fights during the Obama Administration. That isn’t to say that other groups haven’t suffered too. Remember that older, less educated whites have suffered a decline in lifespans, which is unheard in anything other than post-USSR economic collapse. And even though some people in their 50s and 60s are sitting pretty, virtually all the ones I know outside McKinsey and top Wall Street circles are looking at working till they drop.

But young people have suffered in a very large way and don’t have any reason to expect much improvement. And the impact on them of diminished earnings early in their career is more serious than taking a hit for a similarly long period later in one’s working life. Various studies have found that lower earnings at the start of one’s career lead to diminished lifetime earnings.

Reader UserFriendly flagged two disheartening sightings on how young adults are suffering. As we’ll see, the report from Fortune is directionally correct in showing how much lower typical incomes are for young people now versus in the 1980s. However, they over-egged the pudding by taking a period of time that ended with pre-recession peak incomes that it took the better part of a decade to reach again.

I also do not like the Boomer versus Millennial framing in that it implies Boomers were responsible for Reagan-era policies. Deregulation and the Fed crushing labor started in the Carter era, although Reagan cemented neoliberalism as the dominant ideology. The so-called “Greatest Generation” backed Reagan. The propensity to vote for Reagan correlated extremely highly with incomes. Needless to say, the oldest Boomer voters in 1980 would have been 25, which is too young to be very well off, save perhaps by inheritance. Boomers did not vote in Reagan; when you look at the breakdown by age cohort, it was not until you got to 30 year old and over groups that you saw Reagan getting the majority vote (interestingly, young people then also voted more heavily for Anderson than their elders).

Nevertheless, young adults had a good run in Reagan years before the nasty hangover of the 1990-1991 recession kicked in. From Fortune, summarizing a report by a group called the Young Invincibles, using Fed data:

The report found that millennials—15 to 34-year-olds in 2013—were worth roughly half as much as the boomer generation and are earning about 20% less in comparison to young adults in 1989. While millennials earned $40,581 on average in 2013, members of the boomer generation earned $50,910 annually in 1989.

Meanwhile, young adults with debt and a degree in 2013 earned roughly the same as those who had no degree at all in 1989: $50,000.

The lower number on the paycheck has also materialized in the form of a lower net worth. While Millennials are worth about $10,900, the Boomers were worth $25,035 at the same age.The lower number on the paycheck has also materialized in the form of a lower net worth. While Millennials are worth about $10,900, the Boomers were worth $25,035 at the same age.

While this does not break down income by age group, this chart illustrates how using 1989 as the basis for comparison over-eggs the pudding, since it was the peak year in a strong recovery after a severe recession (the Fred chart is interactive, so if you visit the site, you can see the values for each year. Unfortunately, the series does not go back before 1984):

Needless to say, one of the factors driving the lackluster post 2007 results is the lousy quality of jobs. 94% of the new jobs created in the Obama era were part-time or temporary.

The lack of a steady job makes it hard to save for a down payment and hard to have enough in the way of steady earnings to qualify for a mortgage. And in our society, where the property rights of tenants are generally poor (unlike some other societies) and landlords can and do raise rents aggressively, owning real estate historically was the way that the middle class accumulated wealth for retirement. The 30 year mortgage matched the typical productive earning years of the (male) head of the household. When he retired, he would own his house rent free and face much lower costs, or could move into a smaller home and free up equity. Housing was a tax-advantaged forced savings vehicle; the traditional model provided a wealth buffer for retirees even when real estate appreciated only at its long-term historical level of a mere 0.5% real price growth per year.

The resolution of the crisis again turned the old model on its ear. Housing before the crisis was at strained valuations in relationship to average incomes and rentals. Yet the priority after the crisis was to restore home prices to their former levels. Now in fact, outcomes have varied considerably, with the top 10% communities that have done well in the “recovery” seeing turbo charged home price gains (which in New York, San Francisco, and increasingly other major cities have been amplified by Russian and Chinese flight capital).

These high average prices have had a secondary effect: the McMansionization of what used to be starter homes. I see this in Birmingham, Alabama where my mother lives in an affluent suburb with the best school district in the state. Most of the houses near her are 1950s ranch or split-level homes, and when sold, they are either razed or have big additions made to them. Down the hill, a somewhat busy street was clearly one of the first to be developed, and when my parents moved there in the 1970s, it was full of nicely maintained classic 1940s starter homes on small plots. There are still a very few left, but when they are sold, they are replaced with new structures with at least double the old square footage of living space that max out the available land.

As a Washington Post story indicates, it isn’t just the terrible state of the incomes and balance sheets of the young that are keeping them from owning homes; it’s also that modest homes are going the way of the dinosaur. Key points from the article:

Here’s a look at some of the ways that home buying is becoming more difficult for young buyers:

1. More deals are falling through. The share of home sales that fail is on the rise, with more issues arising for people buying starter homes, according to a report released this week by Trulia…The fail rate was higher for starter homes, with 7 percent of deals falling through at the end of 2016…

New home buyers are more likely to face issues with their loans because they haven’t gone through the process and usually don’t have as much equity as older borrowers, [Felipe] Chacón [of Trulia]says. They are also more likely to be buying homes with loans secured by the Federal Housing Administration, which require smaller down payments but have more restrictions, he says.

2. They don’t have many options. One of the main challenges affecting all kinds of home buyers is that there is a shortage of homes on the market. Still, those shortages are growing most for low- and midpriced homes in many markets, according to Trulia. Inventory for starter homes fell by nearly 11 percent nationally at the end of last year when compared to the end of 2015, the company found. That compares to a drop of 6.5 percent for premium homes, or the priciest homes in the market…

3. More people are being priced out of the market. Mortgage rates have increased since the election, putting a squeeze on young home buyers. Rates for 30-year fixed-rate mortgages rose to 4.2 percent last week from about 3.4 percent at the beginning of October. Those higher mortgage rates pushed down the median mortgage that millennials can afford by 9 percent, according to a report released Thursday by Fitch Ratings.

It also doesn’t help that the list prices for starter homes are rising, according to Trulia, requiring bigger down payments. For aspiring buyers, that can mean having to move to a less-expensive area, or putting off the purchase until they have more cash in the bank.

As UserFriendly said by e-mail:

I know exactly who’s fault it is, that is half the problem. It’s like I live in a bubble because next to no one understands anything about economics and so many people only understand politics to the extent that the GOP is more racist and therefore always bad. It’s maddening. It’s especially maddening for people my age, who graduated in 2008. I’d say it’s a reasonable argument that between Clinton and Obama I am about $200k worse off than I would be. So are most of my peers. Which makes my blood boil when I see them cheer him.

I litteraly have no life to look forward to. Out of the 14 years of my adult life I don’t think there has been a single one where my debt load has decreased. Which is completely unsustainable but thanks to uncle joe there is nothing I can do about it.

The young are between student debt, background checks that result in anyone with even a minor incarceration record putting themselves at a big career disadvantage, and the surveillance state so hemmed in as to make it very unlikely that they will revolt. But the Soviet Union didn’t fail due to an internal uprising but due to its inefficiency, the erosion of its legitimacy and the withdrawal of support of its citizens. The US has massive, unsustainable military, higher education, and health expenses and no plan to reduce their growth, much less to shrink them. I’m not sure how this ends, but on current trajectories, it will end badly.

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127 comments

  1. integer

    I also do not like the Boomer versus Millennial framing

    In my opinion you are correct about the futility of emphasizing differences between generations, as all evidence points to increases in inequality being a product of class, rather than generational, dynamics.
    While one’s priorities may change with age, everyone wants to wake up each day with a reason to smile.

    1. Uahsenaa

      I have to agree. You see this in public forums all the time: people use generational dynamics to avoid talking about class, especially those who spun the neoliberal wheel and made it into their thirties more or less financially intact. It never occurs to them that >50% of the spaces on the wheel read “bankrupt.” So, when forced to acknowledge the reality of working people’s lives, they simply apply their own dog eat dog ethic to those older than them but on a much grander scale.

      Of course, when arguments from generational dynamics fail, there’s always “technology ate your lunch.”

  2. jgordon

    “It will end badly”.

    As Charles Hugh Smith pointed out several years ago, collapse has a way of solving all these intractable problems. Just let the system come down and before you know it all the inefficiencies and iniquities that we are gnashing our teeth over now will evaporate over night!

    My solution to the awful housing crisis: live in a crappy, run-down trailer–preferably with an acre or two of land around it that you can grow food on. This is a great idea for a starter home and finisher home!

    I can’t stress enough how important it is to live in a home with wheels these days. There’s just way too many absurd code restrictions and outrageous taxes/maintenance costs associated with regular houses. All these costs add up to an unacceptable drag on life that will sink you. Avoid them with a trailer (ideally in the woods). Added hidden benefit: when society collapses you’ll have a good shot at surviving. Good luck!

    1. craazyboy

      I’d recommend one with a supercharger and big fat racing tires. A Mad Max trailer. You’ll need to move a lot, and fast too!

      You might be a redneck – but better redneck than dead!

    2. cm

      A better solution to the housing situation is to allow manufactured housing, especially under 1,000 sq ft. If we really cared about affordable housing, that is.

  3. Moneta

    Maybe the boomers are not to blame for where we are today but it does not change the fact that they are a large cohort and will promote policies that protect their wealth and pensions.

    They want to get what was promised to them and if the cookie jar was raided that means they will leave less cookies for those who can’t get their hands in the cookie jar.

    What does not help is that the vast majority don’t understand finance or economics and don’t really understand what is going on.

    I was in a discussion group just last week. The only gen-ex in a group of boomers. The general feeling was that the young are entitled and too impatient.

    I just mentioned that I doubted that most single millenials would be able to live alone in their retirement and I was slammed down by quite a few telling me that they were doing just fine in that situation. I told them they were fine because their benefits are being paid by 5 workers per retiree which is going to 2.5 workers per retiree over the next couple of decades. Not to mention expensive houses, bad jobs, no pensions, student debt. They would hear none of it.

    1. BecauseTradition

      I told them they were fine because their benefits are being paid by 5 workers per retiree which is going to 2.5 workers per retiree over the next couple of decades.

      Workers per retiree is not the proper metric. GDP per retiree is much more a reflection of the ability to provide benefits to retirees.

      1. Moneta

        The greater generation had more kids to support them and a more frugal lifestyle. The boomers had less kids and more expensive lifestyle that they will need to prop up.

        My mom had 5 siblings to help. My dad 6. I don’t see how our cohort can avoid the sandwich… my guess is that more than 90% of gen-X don’t have extra money to support their parents AND fund their retirement. So I’m not sure how this GDP per capita fits into the equation.

        When looking at the aggregate, the physical world trumps everything.

      2. Lorenzo

        how come? if GDP growth is achieved through the unloading of debt sacks on the majority of a given age group by Wall St, which is increasingly the case, how does that growth (evermore unequally distributed) reflect an increased ability to provide benefits to retirees? If anything, the artificial propping up of economic metrics will leave future retirees worse off, since this entails the hollowing out of the real economy in favor of financial megacasinos and so on. Perhaps a combination of GINI and per capita GDP could provide a better working index? Still, I don’t think it’s the way to go

    2. ambrit

      It was a good try. The kicker is that the physical universe will run roughshod over their illusions.
      The funny sick part of this is that the “boomers” bought into a myth. In exchange for fealty to the socio-econo-political system of the times, and the implicit acceptance of the looting being carried out by the top tier predators, said “boomers” would receive a secure retirement and better than decent standard of living. The agreement was violated by the self same top tier predators. Now those upper level parasites are inciting infighting between those most victimized by the system pro ante. Divide and conquer.
      Divide by race, divide by ethnos, divide by status, divide by financial rank, divide by age cohort, the list is endless. It will work until it doesn’t.

      1. jrs

        There is something to defense of the system being the most common Boomer attitude, however much people don’t want to make it about generations. Attitudes can be generational. But there are boomer socialists, anarchists, communists, environmentalists, deep green boomers etc.? Yea well they don’t have that toxic attitude. And thus they aren’t part of the problem (and depending on beliefs and tactics might even be part of the solution). The point isn’t even radicalism per se, it’s non-acceptance of the system.

    3. Katharine

      You are over-generalizing about boomers from your own necessarily limited experience involving a lot of those with “their wealth and pensions.” Boomers are also those 65 and 70 year old women checking you out in Walmart or the convenience store when they are obviously too old and too tired to be on their feet all those hours, or those you never see, choosing between food and prescriptions.

      Over-generalizing and stereotyping are the surest ways to create displacement conflicts that focus you on scapegoats instead of on the real causes of the problems.

      Even thirty or forty years ago, there were beginning to be articles saying the boomers would not fare as well as their parents, and a lot of workers who can’t rely on the union jobs their parents had can probably tell you how true that turned out to be. There is no question things are looking worse for your generation, and it is long past time we dealt with the problems, but that has to start with identifying them correctly.

      1. John Keel

        My deceased father-in-law, who would be over one hundred years old, this year, supported a wife and three children pretty well on a bartender’s income. They ate really well and owned their own home, in Vancouver B.C.! No debt and a couple hundred thousand in the bank when he died.

        A bartender’s income would get you a room somewhere and financial hardship today

        It was the ‘Greatest Generation,’ that were the best off of any generation, IMHO. And, of course it is a generalization but one that is worth thinking about. How many women worked and how many couples had more than three children??

        My parents, born in the late 1920’s, had 4 children, owned their house, 2 late model cars and took nice vacations. We were lower middle class!

        Quite honestly, I know very few people who have it as good as they did. And we were typical.

      2. Waldenpond

        ‘But’. I was raised that ‘but’ means: ignore what I just said, now I’m going to tell you what I really meant.

        I find the ‘sneering at boomers’ schtick interesting. There is to be solidarity in all areas but this one really seems to stick. Anger that old people lounge around in their paid for homes v won’t get the hell out of the work place and make room for the youth. Anger that they don’t get pensions v ignoring that corporations have stripped innumerable people of their pensions through reorganization and bankruptcy, anger with old people in homes v old people should be packed in housing as their usefulness is over and they are inferior at making a profit for oligarchs.

        It is just bizarre to me that this mythical ‘boomer’ is blamed for being forced to fight for crumbs, with very minimal success, as if it’s the boomers that are limiting everyone to crumbs rather than the oligarchs.

        It’s visible right now…. There is a protest to protect Republican healthcare. Boomers didn’t agitate for nor pass that piece of crap. The people demand single payer. Yet people are expected to fight for those crumbs.

        Everyone gets ripped off by the oligarchs and keep blaming each other.

    4. Min

      Moneta: “They want to get what was promised to them and if the cookie jar was raided that means they will leave less cookies for those who can’t get their hands in the cookie jar.”

      You are assuming a fixed supply of cookies. If things go as they have been going, we have a kind of paradox. The supply of cookies is increasing, but the supply of available cookies to most people is not increasing. As you put it, the cookie jar is being raided by the rich. That need not be the case.

      1. Moneta

        The US, 5% of the world population is consuming what… 15%, 25%, 35% of world resources? And that’s not even counting the energy and resources used to produce goods in emerging markets and the energy to ship it to America. How much longer can this extreme misdistribution of global resources last?

        But this is not just an American issue, it’s a Western world issue. There are 7 billion people on this planet with billions who deserve as much as Westerners. When our current monetary system took effect, there were only 4b people.

        So the Western world needs to understand that while the elite are looting the lower classes, the lower classes have been looting emerging markets.

        One should always be weary of great imbalances… In the 1960s no one worried that the difference between the income of a middle class family in the western world was too high relative to household income in lesser developed countries. Even today, most people don’t seem to realize how energy intensive our lives are… hopping into our cars to get 2 litres of milk 10km away seems banal to the average North American but incredibly wasteful. Our way of life is full of inefficiencies that are slowly bringing us back down to earth.

        I am of the opinion that our Western lives must become less resource and energy intensive. I don’t believe this has yet sunk in the mind of most Westerners. Most still think the rich are the main cause. And by refusing to accept this we are going to marginalize an increasing number of families.

  4. HBE

    “The young are between student debt, background checks that result in anyone with even a minor incarceration record putting themselves at a big career disadvantage, and the surveillance state so hemmed in as to make it very unlikely that they will revolt.”

    Another characteristic I see among my cohort is a sense of shame about our often financially precarious position. Instead of anger at a system of oligarchy and “Bezzle” their is instead often a deep shame about personal financial shortcomings.

    The myth of a middle class has left many of us striving to achieve something that doesn’t exist anymore, and instead of realizing the middle class doesn’t exist anymore, many often double down and work harder for less to “get ahead”.

    And retirement, forget about it. Deep down I think many of us are aware we will work our entire lives without ever having enough to retire and that feeds into, what I view as excessive spending on “entertainment” and other items that allow the mimicry of middle class, without the unaffordable cost of actual middle class items like you know, a home.

    I don’t see much change happening until the myth of the “middle class” is put to bed.

    1. IdahoSpud

      Re: Retirement.
      I suspect that “Spending one’s golden years in retirement” is an outlier in the human condition.

      Historically, people have worked until they dropped dead. In the future this will likely also be the case. Labor markets apparently need very desperate people, and retired folks aren’t desperate to work in a crappy job.

      A much older and wiser guy once told me that “nobody gives a damn about you… Not the company, the union, your colleagues, your friends, or the government. The sooner you realize that, the sooner you understand how very much you are on your own”.

      The truth of what he said becomes more and more apparent every day. Millennials are the first group of adults to experience this truth without the comforting facade that someone, somewhere gives a crap about them. Nobody has ever truly cared, but in a gentler era, they used to pretend that they did.

      1. Eureka Springs

        You are not the first, nor was my gen. (born in ’65). I would say the biggest problem has been just how many times we have had to make career changes.

        As for Yves saying there is no revolt. Of course there is. Owning operating N.C. – truth-telling – is one of my favorites! And I would say to all people, redefine ‘success’ for yourself. I left S.F. with a reasonably successful business in the early ’90’s because I didn’t want to spend the next thirty years paying off exorbitant housing prices. Less is so often more. I bought a home here in the Ozarks for a total price which was half of what a down payment in San Fran would have been. The least expensive house in S.F. at the time, not one I would have wanted to own. Paid my place off in 12 years. Friends of mine (my age) who have done well out there are still paying and will be for another twenty years. Yes their place is valued at 5 times what mine is, but I am not selling my soul to the company store at near the rate they are. I’ve had a life three to six months out of each year, they are lucky to have three weeks a year.

        I may very well die younger without health care and retirement income, but the life and love I’ve had is worth it. Struggling on S.S. and Medi whatever never looked appealing anyway, not enough to work/wait around on living life then. And I never wanted to con enough people to ‘earn’ what it would take to succeed as defined by most in this world. If you are wealthy in the neoliberalcon meaning you probably had to rip off a lot of people to get there… That’s where boomers failed… and so it goes.

      2. jrs

        the point of unions was not to care (and yes the worst may have been corrupt and yes the best may have approached some kind of caring). But the point was that workers had more power when negotiating collectively than individually, that was the point of unions. It’s undeniably true, the individual is pretty powerless acting alone in this system. Being on one’s own often equals powerless against much larger forces.

      3. Min

        Idaho Spud: “Historically, people have worked until they dropped dead.”

        I’m not so sure about that. From what little I know about 14th century England, people were not expected to work over age 60, although surely many of them did, and 50 was the retirement age in Tokugawa Japan, although again, not everybody could retire at that age. Work till you drop, as in the phrase, He bought the farm, may be a modern invention.

        1. IdahoSpud

          Retirement age was considerably higher than life expectancy? The irony is delicious!

          Maybe social security should try that. Oh wait…

    2. jrs

      Only you won’t be able to find anyone to hire you to work your entire lives. So even that is pure happy fantasy to think “oh well I won’t retire but I can always work”. No you can’t!

      (Ok, some people will of course work their entire lives, but many won’t due to age discrimination and that’s even assuming they don’t have health problems which make it impossible and people tend to get more of as they get older – but even assuming they are jack lalane in health … there is still age discrimination in hiring).

    3. John Keel

      @HBE,

      So true. My heart goes out to your generation. I feel Boomers tried to borrow their way into an ever receding middle class. They too, wanted to have the same basic things their parents had, borrowed to get themselves there and then, feeling hard done by, borrowed even more for excesses.

      I don’t quite understand the psychology there, but maybe it was or is about filling a void where substance meaning and human connection used to be.

  5. Arizona Slim

    Erosion of legitimacy and withdrawal of support? We just saw those things during the last election.

    One more thing: In 1980, the oldest Boomers would have been 34 years old. Which means that they were old enough to vote for Reagan.

    1. ambrit

      So far I haven’t found a cure for stupidity.
      Withdrawal of support means nothing until the shooting starts. We are facing seriously delusional “true believers.” They are more than willing to have hectacombs of other people die for their beliefs.
      As Max Planck said; “Science advances one funeral at a time.” Alas that it should be the same in society.

      1. Eureka Springs

        Wow, I forgot just how long the duopoly has pulled off such narrow margins. And as Yves pointed out Carter vs Reagan wasn’t much of a difference… the neoliberalcon project was certain with both.

    2. Altandmain

      The older Boomers from 1945 to 1950 would be part of the 30-44 tier.

      Equally noteworthy is how the Silent and no so “Greatest” generation voted for Reagan.

  6. a different chris

    I will add my usual whine about economists, who tell us all that in the modern world we “need to be flexible” (aka move at the drop of the hat, have multiple jobs throughout our so-called career) and at the same time tell us that we “need to invest in housing”.

    Can’t do both. I don’t care what two of the of smart, good hair, and tall combination you have going for you. And that isn’t even considering your spouse’s job/location needs.

    1. jrs

      a possibly path is to save up money and plan to buy a house upon retirement. How doable it is depends on where one plans to live (cost of housing) and if one sees retirement as being viable under some terms some day. But it makes more sense from a job flexibility perspective than buying while working does, because I agree that REALLY doesn’t make sense, even if it’s harder in some ways economically.

      1. Code Name D

        But you can’t even save in this environment. I have a pass-book savings account used to hold access funds that gets some .001% interest. With only a few thousand dollars, I am just happy they don’t charge me any fees. And every time I turn around, an out-of-the-blue medical cost forces me to pull money out of it.

  7. a different chris

    PS: forgot to add that, sadly, Keynes ““The market can stay irrational longer than you can stay solvent” statement will continue to hold — but note that he wasn’t saying that it wouldn’t go “rational” at some point and then, uh oh.

  8. Sam Adams

    Boomers and ‘the greatest generation’ too can be caught in the Student Loan debt peonage. Many co-signed or guaranteed the student loans of the Millenials and are now having their incomes and assets seized when the loans are defaulted or unpaid.
    Uncle Joe got a medal with distinction too.

  9. Yuliy Baryshnikov

    Your statement, that “94% of the new jobs created in the Obama era were part-time or temporary” is a trumpism. A brief search leads to the original research by Katz and Krueger that give the 94% estimate for the fraction of the job growth falling into the “alternative” category, with majority of jobs classified as “full time, but supplied by a third party”. The changes are large, true, but not of the kind you implicate.

    1. Elizabeth Burton

      A full-time job provided by a third party is a temp job, and they are often all that is available no matter which generation one was born in.

    2. Clive

      I did a long, rather than brief search, because you obviously skipped school the day they taught about copying and pasting and the articles I found validate that statistic e.g.

      https://www.cebglobal.com/talentdaily/part-time-temporary-employment-new-normal/

      While some of the 94% was notionally “full time”, it was also short term contract, freelance, self employed, non-guaranteed hours, gig economy and the like. If you think that these sorts of jobs (and calling some of them jobs is like taking a pig, playing a recording of someone making meowing noises and saying you have a cat) are full time salaried employment equivalents, you’re sadly mistaken.

    3. Yves Smith Post author

      Sorry, I provided a link. The underlying source is an academic study.

      An “alternative” contract job is not a full time job. It’s a short term assignment which may have full time hours while it is underway. They seldom add up to full time work over a year. And that includes gig economy jobs, which no one in their right mind would consider to be full time. Ask Uber drivers. From comments:

      As an Uber Outreach specialist, I can tell you first hand the driver attrition rate is horrendous, it’s around 3 months before they quit, and after they get their signup bonus. So usually half of Uber’s workforce quits every 3 months based on my data of driver recruitment.

      Michael Shedlock has been parsing job reports for years and has regularly found job reports where part time jobs created were as high as 50% of the total net job increase, meaning full time jobs were lost and replaced with part time jobs. The ongoing reporting has been consistent with the findings.

  10. PJ

    Hello, 2009 graduate here. People have no clue the affect this has had on our lives. Don’t underestimate the power that batting 0/100 in a month of resume sending can have in terms of generating “learned helplessness”.

    Meanwhile, people who graduated just a couple of years prior to me with similar or lesser credentials endlessly flaunt their cars, vacations, homes, and promotions. It took many years to get over the resentment, and there are still occasionally nights (perhaps 4 or 5 a year, but in the beginning it was every night) where I lay in bed until 3 AM brooding.

    I sort of got back on my feet in the last year. I still make less than the average income, but have a steady job that leaves me a few hundred extra a month that I can sock away.

    Recently a much younger coworker (who has a year or two seniority to me) asked me when the financial crisis happened and I could only stare in disbelief, unsure if he was joking. So basically a significant percentage of 3-5 years worth of graduates got flushed down the toilet, but it sounds like the new kids coming up are okay other than student loan burdens.

    Talking with a friend who graduated a year after me, we’ve decided the outsized hardships have toughened us up in a way that people who skirted through the crisis don’t understand. We concluded if there’s ever a similar crisis, we’ll be ready and they won’t.

    1. Katharine

      Please don’t imagine batting 0/100 is new. Before I quit struggling to have an academic career, there was one year in which I not only got nowhere on the few tenure-track jobs I applied for but also sent resumes to all the public colleges in three states on the chance of an adjunct position, without any response. In retrospect I am damn glad to have gotten out of academia, given what it has turned into, but at the time the learned helplessness, confusion about my own worth, and general resentment felt just the way such things feel now. And I was far from unique even in my own field (in which <3% of us in that era wound up in the academic jobs we had imagined we were training for).

      You sound as if you have already learned the essential truth, but for anyone who is still struggling as you were five years ago: your worth is intrinsic, doesn't have anything to do with what kind of job you have or don't have. Even a good job, even a dream job, only gains value from what you bring to it. (That still doesn’t solve the problem of eating, but it helps with general outlook.)

      1. UserFriendly

        Try batting 0 out of around 2 thousand over your first 3 years out of college with $120k in non dischargeable debt hanging over your head. Then finally getting a job and realising there is essentially no way to ever get out of debt.
        To say that inside my head I go from white hot rage to complete despair and hopelessness over trivial things is an understatement. It’s exhausting not letting those emotions seep out everywhere; so exhausting that I would just rather not be around people, I avoid human interaction as much as possible. The more I learn about economics the madder I get at the complete and utter obliviousness of the ass holes that get to lead us and the oligarchs who can never say enough is enough. They are lucky I wasn’t raised around guns.

        1. PJ

          User – I can understand your situation and sympathize even if I haven’t been hit as hard as you. There was probably a year and a half where I stayed up all night laying in bed, thinking my future was gone, and I can honestly say that those days are in the past and I’m moving forward now.

          The best immediate advice I can give you is what I refused to do: seek counseling.

          I know I would have benefited from it, and it probably would have speeded my recovery. Your problems aren’t so big that they’re insurmountable. After that, I recommend starting weight training as it can help you find a way to make progress in your life even when you have difficulty professionally. Keep us informed of your progress.

          1. Massinissa

            I don’t know if counseling will help, he doesn’t sound like he has the extra money for it, and most of his psychological pressure is from not having money in the first place.

            Weight training might help though, its possible to do that without gym memberships.

            1. PJ

              I respectfully disagree. The source of his problem isn’t lack of money, it is that he wrongly believes his future is gone. Counseling can help change the thought processes that might cause him to miss out on future opportunities.

              1. barefoot charley

                I was an adult child of the 70s stagflation, when even fancy BAs could go to hell or to Wall Street. The economy started working a bit thanks to Wall Street bubbles and inflation, but I was very surprised that opportunity reappeared for so many of us in later years (okay, and I left the Rust Belt for California). Yes, I was screwed out of a decade of income. But providentially I realized that if I was going to be unemployed and depressed anyway, I might as well do it in France, and 40 years later I can speak French! Can even afford to visit there and wow my wife. You just never know what’s going to happen, User.

        2. animalogic

          Just a suggestion — I don’t want to sound glib or a smart arse or something, but the channeling of your legitimate rage into radical Left politics may have both personal & social utility. Of course, if you are fed up with humans & society altogether, I would understand too.

      2. PJ

        Katharine, thank you for your kind words. I don’t have a PhD or masters, but I know how difficult it is to spend years pursuing a profession that wants nothing to do with you. Glad you also seem to have turned a corner in your life.

        1. Katharine

          Long since, and thankfully. The debt burden in my case was never as great as some younger people are facing now, and I can’t presume to offer solutions to anyone based on my experience in another time, but I do offer my absolute certainty that every last one of us matters.

          Years ago, back around the time I was turning my corner, I saw a church notice board that declared sententiously, “The test of a civilized society is how it handles its misfits,” and I instantly thought, “No! A truly civilized society wouldn’t have misfits.” I greatly preferred the board at the Quaker meeting house down the street that said, “House of God. Office in rear.” I figured people who could laugh at themselves had a lot greater chance of giving comfort to someone else.

          Which is a thought that might do for some who are feeling cut off or desperate. Your local American Friends Service Committee or Catholic Worker affiliate could offer a little connection. They don’t proselytize, they do respect you. Not everyone’s cup of tea, perhaps, but worth keeping in mind.

    2. River

      Not a kid, but I empathize. Spent 35-40, basically unemployed and living with my parents. With student debt as well.

      At least when you’re young, living at home isn’t seen as a big deal , now anyway(friends who mid to late 20’s didn’t see it as such). When you’re mid-30’s every day of those years was a humiliation. No dating, no privacy, no sense of accomplishment, no money (a variable part-time job that can barely cover your groceries I don’t consider money), no sense of ownership, feeling like you are a failure and a parasite. Often thinking with the shotgun in the basement, there is a permanent solution to a temporary problem.
      And every morning, especially towards the end, wondering if you’ll be homeless.

      So I do empathize with your situation, even though I was no where near the bottom.

      Epilogue – did get an actual job, benefits, moved-out, pretty damn happy.

  11. susan the other

    We reached critical mass economically. The resources are still there but we are bumping into each other at every turn. What’s a thermonuclear explosion to do? Lots of people thought the earth could “sustain” 10 billion souls. But it looks like that might be impossible without serious planning and efficient living. 7.5 billion of us are really stretching the sinews of civilization. It’s a negative synergy isn’t it? An implosion with freedom and equality for all.

  12. Quanka

    I am probably within a year +/- of userfriendly. My first 6-8 years of post college life was the same — not a year passed where my debt load went down. Since then, my wife and I have simplified and down-sized and as it stands we still struggle to chip 1-2% off the debt load every year. We have made 2017 the year of reckoning in that regard.

    One thing that I cannot stand hearing is how lazy and entitled those damn millennials are. I agree 100% with Yves that A) young people are not the only cohort that have been screwed, and B) its unproductive and unfair to start casting blame around at different generations. Its rank stereotyping — you dont know the other person’s story whether they are 30 or 75. And as Sam Adams noted — older generations can get caught in the same cycle as the younger ones (co-signing student loans, for example. Or getting their own student loans on the fairy tale of “retraining”).

    I dont have a happy ending for this comment. Its always darkest before the dawn and shit. Well it seems like our society has just passed midnight, and we sent that clown Donald out to get another keg to keep the party going. It will likely get darker yet. Not that we had a choice, HRC was offering Martinis to the in crown and Mad Dogs for the poor people.

    And the biggest issue — oft noted in this post and the comments is a lack of understanding of economics. A friend of mine from school just visited, he was an English major in college turned white-shoe lawyer in NYC representing financial firms. He was aghast when I rejected the idea of “comparative advantage” — my comment was, if I remember, “yeah its a great theory that doesnt actually have evidence to support it” — I could give you 10 such examples of young, smart people who have been given the clif-notes version of Economics and hold all these things near and dear to their heart regardless of truth.

    To NC writers, readers, commenters: Keep Soldiering On. We have changed many minds over the past 10 years and we have much work to do.

    1. Susan C

      “and we sent that clown Donald out to get another keg to keep the party going”

      Without a doubt that is one of the smartest and funniest and truest comments I have ever read :) LOL

    2. John Keel

      In the early 70’s I developed a neurological disease that left my analytical functioning and long term memory intact but destroyed my short term memory. My ability to learn anything altogether new was ruined in the process. I was 14 years old and remained undiagnosed until I was in my thirties.

      Up until my thirties my life was a study in overcoming. But I was also very very lucky.

      I see so many young people today saddled with equally impossible problems with employment, though originating from a different source. So I open my heart and wallet to those I meet who are struggling and whose parents can’t help them because they are having a tough time, too.

      If you have more money than you need, reach out to those who need it more. It is a wonderful feeling to reduce a fellow human beings stress load. I was worried that handing a young friend a substantial amount might offend them. But no, it is so bad out there, they look like they have just been given a license to breathe.

      1. PJ

        I was worried that handing a young friend a substantial amount might offend them. But no, it is so bad out there, they look like they have just been given a license to breathe.

        Yeah, there was a time when accepting money or help from someone else would have made me refuse, perhaps angrily. The crisis completely smashed that idea to smitherines.

        Take every cent and every unfair career advancement someone offers you. I’ll never have pride again after those years.

    3. animalogic

      Sorry, I guess it’s a species of one-up-mash-up, but although agreeing with everyone you said I can’t subscribe to your “biggest issue”. I place economic stupidity at #3, behind political Psychotics in Washington seeking to goad Russia &/or China into war, followed at #2 by the generally lackadaisical attitude of the West to climate change. (I wonder at what point another “hottest year on record” will cause an honest response to climate change ? “When it’s too late” sounds like a good bet….)

  13. Altandmain

    Class of 2013er here.

    I got laid off from a job just before the holiday season last year. Pay was terrible and the environment was terrible. Currently unemployed.

    I am pessimistic about the future and feel like we have been betrayed by our very rich. We may not be the only cohort not being screwed, but I think we have been hurt the most. Oh, and people like me who aren’t White have it even worse in many regards.

    Things here in Canada aren’t that much better. Our weak dollar has made imported goods expensive and our government doesn’t invest in manufacturing as if our national prosperity depended on it, which it does. Wages for many jobs seems lower in Canada. So basically a dollar in Canada buys less. Our economy was too tied to the Oil Sands and there was a very strong correlation between the CAD exchange rates and the price of oil for a while.

    Perhaps I should take that back. I guess there aren’t nearly as much racial tensions in Canada compared to the US. I should also be grateful I guess that we don’t have the nightmare healthcare system in the US, I still get healthcare coverage, which is independent of losing my job. Losing my dental insurance though is a pain and we need universal dental care. Lucky I went to the dentist before losing my job. There is also the matter that I have zero student debt (tuition is more affordable than in the US and interest rates are lower), but alas, many of my colleagues are not as fortunate. Professional programs too have higher tuition …. which sucks when you cannot find a good paying job in your field (need experience to qualify).

    Oh, and I am mad as hell that my generation has been called “lazy”. At several of my older jobs, I saw many people in the older generation with a far weaker work ethic than me. In many cases, the answer is that they could. afford to be. Many of the Silents grew up in an era where people could walk into the factory and get a job, even without a high school education. We’re a far cry from the 1950s.

    Plus this shows no signs of abating. There are reasons why Sanders was so popular in the US. People know who screwed us.

    1. jrs

      Even years ago Canadians sometimes took jobs in the U.S. especially when young as the pay can be much higher depending on the job. When not so young though, there is no way you want to bet your life on the U.S. healthcare system (and keeping decent insurance and hoping it pays out when you need it to).

    2. Susan C

      There is good reason for the pessimism expressed by you and other new grads. I am an older Boomer and once did vote for Reagan and I think Anderson too – we all loved him although I can’t remember why.

      Did tons and tons of research on Millennials and Boomers and the economy and even managed a little gig for Fortune in the 90s. My point is – all Boomers realize how tough the going is for Millennials since the financial crisis which I tag as starting in 2008 with the downfall of Bears Stearn and Lehman and then the gifting by us taxpayers to the banks. Boomers are the parents of the Millennials for the most part and they know their kids were/are having problems getting jobs, that they were getting saddled with sky-high student loan debt, not being able to buy houses and all that. Boomers did not have it that easy either – recessions all the time, one moment you are flying high, then out of work and accumulating debt, and then having to work to pay it off. Over and over again. You never knew what was in front of you – good or bad. Be resilient – find your talent and go for it. You may not accumulate a lot in your banking account when you hit retirement but you will have the pleasure of living a life that gave you a lot of fun and pleasure. For me I moved to New York three times without knowing anyone and made it work. Go where the jobs are. Take temp or anything to keep the roof over your head – and live your life. It is not about money. Yes things may seem daunting now but they can clear up in an instant. For you. And yes the Sanders message got it right – it is the billionaire class that has taken the money out of the system and we need it back. And remember – hire those old grannys when they knock on your door – and be happy! For now anyway – who knows what the Trumpster has in store for us all.

      1. aab

        I don’t think it’s accurate to say “all Boomers realize how tough the going is for Millennials.” In my experience, this — like everything else — breaks down along class and economic lines. My oldest friend in the world is a lawyer who works for a health care company. When I refused to cheer for Hillary in the general election, she cut me off, and it looks like she will never speak to me again, because I got impatient and talked about income inequality in impolite terms. When she talks about her children’s career path, it bears no relationship to the crisis most Millenials are experiencing, because for the children of the affluent, it is not the same. They have no student loan debt. They can use connections to get internships, and their parents can cover their expenses. There is no fear.

        One of my other dear, affluent friends is more naturally left wing, although not particularly political. She is sympathetic, but their family’s life experience is so different that she struggles sometimes. Her son graduated from a state school into one of the best paid entry level jobs in the United States at a very, very famous tech company. He is still unhappy. What’s interesting is that the system is so broken that even affluent Millennials who are sensitive enough to want human interactions and a life are often miserable. But there’s no question that his psychological unhappiness is not the same as the millions of Millennials chained to debt, unable to find employment commensurate with their skills, often trapped living at home, unable to get on with building any kind of economic and life stability.

        The chasm between the life experience of professionals who work in the industries subsidized by fiat currency on the coasts versus everybody else is huge. Age/generation does not seem to me to be as salient as income.

        1. Susan C

          Yes but there are always going to be people who are more affluent than the rest of us and due to their lifestyles and social circles are not going to experience what the vast oceans of the rest of us are living day to day. This is how it goes. They have no clue what is really going on in this country, nor do they want know. The big shock for them is getting Trump as their president – really, they say, Hillary lost because of Michigan, Wisconsin and PA? Because people didn’t have jobs? Well, maybe this is their wake-up call.

          1. aab

            Not to be petty, but in other words, you acknowledge that your earlier statement that “all Boomers” understand how much Millennials are suffering is incorrect? Because this more recent comment directly contradicts your earlier one.

            It matters. Assigning blame and responsibility generationally is fallacious, and helps the rich and their professional class courtiers evade responsibility for the harm they have caused.

            1. Susan C

              Importantly, we agree that assigning blame and responsibility generationally is fallacious as the real divide is between the top percents with their growing wealth and the rest of us.

  14. From Cold Mountain

    I am 50 years old and have been on Disability of 17 years. I made more money than most in my youth so I get $1550/month. Over the last 8 years I have found it harder and harder to manage on what I get. I have forgone doctors, any type of personal transportation, and I live very simply and most of that time in communal housing. But yet, this month, because of rising rents and the ridiculousness of landlords asking for 3 month rent up front, my functional homelessness will likely turn in to full homelessness. I am not asking for much of a place to live, but no one builds studio apartments anymore, they all went “luxury” and renting a room gets you nowhere past the phrase; “I am on disability”. Also, people who are on permanent disability have had negligible COLA adjustments that do not reflect anything close to reality regarding the rise in rent, food, and medical care.

    In my youth, I was a lifelong democrat. I am nothing now, and this state of affairs I blame all on the Obama administration. The ACA was a FAILURE for ME and it is proving to be a failure for so many people I talk to. And Obama’s policies of bailing out the banks just mimicked those of Bush and did nothing but raise asset prices which prices people like me out of nearly every market.

    People like me, we are trapped inside of the bubble, and all we see is everyone expanding away from us, along with all the food and housing.

    And if anyone give me any guff about “getting a job”, please hire me and give me the flexibility I need without firing me at the drop of a hat.

  15. Reverb

    Oliver Stone in his “Untold History of the U.S.” Netflix series also makes the point that it was not the boomers but instead the “Greatest Generation” that voted Reagan into office.

    Not sure what you would use for footage, but an untold economic history of the US in documentary form would make the middle class’s blood boil (Stone’s work is recommended but heavy on our foreign entanglements).

  16. Corey

    Maybe if “millenials” spent less time pecking away at their cell phone toys and more time on education, developing marketable job skills, and working hard, they would experience less “hardship”. Just sayin’

    1. PJ

      No doubt about it, a troll comment like this one (which would have and did receive boisterous applause at the 2012 Republican presidential debates) would have sent me flying into a rage. Unfortunately for you we’ve developed thicker skin from years of putting up with idiots like you kicking us when we were down.

      Better hope the wheel doesn’t turn someday and your number comes up. You’re going to be facing a largely unsympathetic audience.

    2. Milton

      I know I shouldn’t feed the trolls…
      Anyways, I too am annoyed with folks that cannot “unplug” but that is an issue that is societal not generational.

      1. Massinissa

        Yeah, I’m not really so sure boomers or whoever are really all that lesss glued to little screens than the younger generations at this point.

      1. Massinissa

        “Pulling oneself up by ones bootstraps” originally meant doing something that was impossible. Try pulling your shoelaces up and see how far you can go.

        Somehow though the meaning shifted into the present form of “work really hard” around the end of the 19th century/early 20th century.

        1. Mel

          “Pull up your socks” is the old idiom that seems to have got distorted, with some connnotation of cleaning up your act and getting going.

    3. Massinissa

      Roughly translated into English as:

      “GET JAWB SKILLS AND WORK HARD!

      GET A DEGREE SO YOU CAN COMPETE IN THE MARKET FOR A JOB AT STARBUCKS!

      JUST DONT NOTICE THE FACT THAT THE RICH ARE ABLE TO MAKE MONEY WITHOUT WORK!

      I GOT MINE, SO UP YOURS!”

    4. Waldenpond

      Get off my lawn! Your music sucks, my generation’s music has a real message! Your hobbies are vapid, mine are meaningful. When we digged ditches in my day, we dug ditches. When you dig ditches, you just dig ditches.

      Good grief, I’m a semi-old but apparently not so decrepit I can still do basic math and understand that education, rent etc are higher, jobs rarer and harder to break into, etc.

    5. From Cold Mountain

      Besides the fact that people are probably using their phones because they are so under stimulated by working well below their education level…

      These phones they are “pecking around on”, you know the Apps they use on those things were designed by people who knew that addiction is the key to keeping these kids pecking away on their cell phones. That is what generates ad revenue. So I guess it is like telling an alcoholic to just stop drinking and get a job.

      But if these kids stopped pecking around on their cell phones Facebook and Apple would collapse along with the “boomers” 401ks. So careful there buddy…

      1. jrs

        “Besides the fact that people are probably using their phones because they are so under stimulated by working well below their education level…”

        most work is boring, so complaining about work being boring is about as useful and sympathatic as complaining about water being wet. And getting a degree has only so much to do with intelligence, whatever that is, so those without degrees are often working well below their aptitude and interests as well. Even the high school grad at Walmart might be capable of much so more, and deserve it as well on some human level, but talk about the suck.

    1. Massinissa

      Actually, Monopoly the board game was a concept that was stolen from a game invented by a Georgist (as in the economist Henry George’s economic theory) that was intended as a teaching tool to teach people why there needed to be higher property taxes.

  17. Paid Minion

    Everybody needs to admit that the Boomers, Gen X, and the Millenials have all been equally screwed.
    And that most whites have more in common with poor blacks and Hispanics than you care to admit.
    (See Romney’s “47%” comment, for what the suit trash really think of you)

    Many suburbanites like to blame people on making “poor choices” for their financial predicaments. It exactly the opposite. No/low income forces you into making these “poor choices”, and also keeps you from recovering from them once made. One screwup at 18-20 (and what 18-20 year old hasn’t screwed up?), and in today’s economy ans society, you are screwed for life.

    Many boomers like myself find ourselves spending our retirement money keeping both our parents and our kids out of the cardboard boxes (Paying for college, cars, subsidizing rent and house payments, emergency expenditures)

    The solution of course, is kill off the Boomers prematurely. Wipe us out early, and all kinds of fiscal/social problems take care of themselves. (Of course, it will create a multitude of other problems that won’t be evident immediately, that “nobody could have anticipated/seen coming”)

    The plan is well underway, at least for us male “Oil Embargo Boomers” Not so much because of drugs, but alcohol, stress, and 50-70 hour workweeks for 30-40 years.

    1. Tim

      Boomers had the opportunity to Earn, Save, and invest with massive returns, and collect SS
      Gen X has the opportunity to Earn, and therefore save (at least in hard assets like a home), and (likely) collect some social security in the future
      Millennials have no opportunity and no future
      Which means there really is no future after that.

      1. Elizabeth Burton

        Boomers had the opportunity to Earn, Save, and invest with massive returns, and collect SS

        I didn’t. I know a whole lot of other people who didn’t, most of them women who ended up as single parents. Part of the disinformation propagated by the propaganda machine is that “Boomers are the richest generation” as if most of them weren’t blue-collar workers whose jobs when bye-bye thanks to the neoliberals.

        There’s a reason the average income for seniors right now is barely what constitutes a livable income—and that’s average not median. That’s why all these attempts to drive a wedge between the generations is so insidious. Its only purpose is to ensure, as with all the other artificial divisions, that we can’t put our heads together and plot revolution.

      2. Waldenpond

        The majority of everyone’s (boomers included) earnings accrue to oligarchs.
        Many boomers have been stripped of their retirement benefits by corporate bankruptcy.
        Boomers exist on insufficient SS. Poverty rates are too high for all categories.

        It is a sh#tty system. Everyone is exploited.

        There are more generationx in the workforce than boomers. There are even more millenials than genxers. http://www.pewresearch.org/fact-tank/2015/05/11/millennials-surpass-gen-xers-as-the-largest-generation-in-u-s-labor-force/

        The two groups outnumber boomers in voting power. Boomers can yell it’s the system over and over but keep getting blamed for the crimes of the oligarchs.

        Rest assured, when the myth turns (and believe me, the oligarchs will) and starts pointing at the millies and xers, boomers will still yell it’s the system.

  18. Propertius

    Needless to say, the oldest Boomer voters in 1980 would have been 25

    I think that’s a typo. Shouldn’t it be “35”?

  19. G

    What I see is a system which promotes greed! If one thinks about the cost of housing and the cost of living, the landlords and the C-executives are basically raking everyone else over the coals. The economic system is set up that the bankers use your 401k funds to fund corporates which fund the companies and where the boards give big payouts to the execs (the biggest sham ever!!). As far as the landlords that’s a luck think by and large (ok lucky that back in the 70’s you have the ability to have a stable job!!), however now that most places don’t have rent control there is systemic robbing of people through increasing rents along with the prevention of people being able to buy houses due to a fragile job market providing unstable incomes to allow people to get mortgages. We live in a very testing time. I agree that all generations had it tough. However I will say that the ease of getting on the ladder was easier for the boomers. There was the ability to live on one income and one job (which was probably stable). Now it’s 2 incomes minimum !!

  20. MG

    Yet it is going to come down to a generational struggle by the mid-2020s (if not sooner) though between the Boomers vs. Gen X and Gen Y.

    You are already seeing this play out in PA politics at the state level because of its demographics especially in the rural areas that is overwhelmingly white & older. There is this completely misbegotten notion among older white folks in the state including a lot of my parent’s friends that the older citizens and especially seniors are somehow supporting the free-loading welfare recipients in the PA cities (mainly Philadelphia itself). Doesn’t matter that the Philadelphia area is far and away the wealthiest part of the state and that without the Philly metro areas the state would face huge and massive revenue and fiscal challenges. Nor you can sparse Philadelphia from its surrounding counties given the more than 150k people who commute out of Philly to the suburbs daily for work and the more than 250k who commute into the city for work daily just from the surrounding PA counties.

    This dynamic goes back a long time in PA politics yet the exact opposite is true especially since almost all retirement income in PA is exempt from PA income taxes as well as their being fairly decent programs in place to lessen property taxes for seniors.

    The state is already facing a ~$2B projected deficit yet one of the biggest issues for GOP politicians in Harrisburg (where they have overwhelming majorities in the House and Senate) is to greatly reduce property taxes in the state. Never mind the effect this would have on primary education in the state or the greatly increased income tax and sales tax hikes that would have be approved.

    Since seniors and aging Boomers in the state tend to already own their homes or be close to paying them off with no kids in school, it is great news. It still would be a flat income tax state which exempts almost all retirement income for the state income tax too.

    Never mind that one of the unintended consequences of doing this would be to further push out younger people out state who are desperately need to support municipal, county, and state programs.

    It is basically a mathematical certainty that Gen X will be worse off collectively than Boomers and Millennials facing even more of a struggle given the educational debt burdens they have. Notion of each generation doing better than the previous one in America is dead and has been for at least a decade. The realities of this have finally started to dawn on most Americans if you look at polling data from the last few years. It is one of the reasons why Trump got elected.

    The questions and discussion we should be having is acknowledging this basic fact and seeing what to do in place of it. Instead what we are set to get is even more public looting including the possibility of turning Medicare into a voucher-based program, privatizing Social Security, and using federal funds to create a voucher program for primary education. There aren’t many untapped large pools to pilfer and loot yet and these are among the last ones which I’m sure the new GOP majority will lustily go after since they have a generational opportunity to do so.

    1. KYrocky

      It is a class struggle more than a generational one.

      I am a boomer parent of two millennial young adults. I was on my own at college at 18 in 1976. With a roommate and both of us working part-time minimum wage jobs we covered rent, utilities, phone, food, beer, tuition books and fees (state university), and a mostly running car used sparingly. There is no way, absolutely no way, that can be repeated today.

      It is not a matter of millennials needing to work harder or smarter. In large part, college was affordable in my day because states funded them. But equally significant was that our labor was worth more, specifically the quantity of similar goods that 25 hours of work would buy was much larger then than it is now. A semester’s tuition (12 or more credit hours up to 24 hrs) was $250.00. Rent and utilities ran $210/month for decent 2 bedrooms with pool and on-site coin laundry. Gas was 50 to 60 cents a gallon. If these prices were expressed in equivalent units of minimum wage hours our purchasing power was multiple times more than we would have with current minimum wage. And college costs and health insurance (my student policy was quite good and very cheap though I never used it) are astronomically more.

      The economic opportunity millennials whose earnings are below median is far below what was available in my day because the bottom line is this: labor is worth less today than it was at any point during my lifetime, and probably that of my parents. And labor is worth less because those at the top have been increasing the portion they take for themselves since at least when Reagan was sworn in.

      In my minimum wage jobs myself and those I worked with felt treated fairly and with respect, and we could see that with advancement opportunities available came very noticeable gains in income and living circumstances. Those differences are much less for millennials as well, and when the typical debt load is considered such gains may appear unattainable to many.

      Lastly, too many think of millennials as suburban kids of middle class privilege. The majority of them come from modest to low income families with many from poverty. The former American reality used to allow one to survive in a minimum wage job. Today it does not. I am aware of what I spend trying to cushion my children’s existence, and that it means less for us in retirement as well as spending.I when I think about my situation being multiplied by the millions it becomes obvious as to why there is so little demand in the economy.

      1. Waldenpond

        It was hard then…. absolutely had to have roommates, better market for used texts. A car issue meant stopping for a semester, etc. and working during summers but you could quickly find a job running a cash register or waiting tables. A person can’t financially recover now with a semester off.

      2. flora

        Great and spot on comment. Thanks. I’d add that the adults running things then were Depression kids and WWII young adults and understood the importance of not crushing the next generation with debt.

        1. flora

          adding: I didn’t appreciate then the financial decency the Depression/WWII generation bequeathed us.

      3. Moneta

        Is it a class struggle or generational? Your comment shows it’s generational since you say your children don’t have your opportunities.

        1. FluffytheObeseCat

          Your comment shows it’s generational since you say your children don’t have your opportunities.

          Logical fallacy. It is class warfare, wage by the hyper-elite on the mainstream. Her acknowledgement that the decrease in opportunity can be seen across a generational divide does not change the fact that we are languishing under upper class-controlled maldistribution of wealth. That maldistribution of wealth has been up towards the powerful at the expense of the average guy.

          1. Lambert Strether

            Class warfare has to be conducted on some sort of terrain, and it works by taking differences and amplifying them. The warfare is opportunistic; generational differences are there to exploit, gender differences, racial differences, educational differences. Height, weight, and bad teeth do it, too. And of course the difference between selling labor power and buying it. Oddly, or not, this last is almost never discussed in polite society…

          2. Moneta

            Maybe there’s a link between limited resources and the upper class grab.

            It does not look like the planet could tolerate 7b people consuming like we do.

            We Westerners have consumed more than our fair share and should expect a global redistribution… meaning less for the younger generations.

            While the upper class is storing nuts at the expense lower classes, I doubt a fair redistribution at a global level will bring the lower classes what they want.

            1. Moneta

              The reality is that a large percentage of westerners still see no physical limits. They look around seeing lots of wealth and just think about the misdistribution.

              They are only looking at the sunk cost and not thinking about how much energy and resources will be needed to maintain an out of control system. This energy will be used to prop up what is there. To build more of the same because it is hard to see what should stay and what should go. And clinging to this energy intensive system means an increasing number of people falling by the wayside as resources used for inefficient projects are not available for other uses.

  21. Jason Boxman

    I finally had an opportunity to visit Birmingham last year, out of curiosity. I stayed on the side of Red Mountain facing UAB. On the flip side of Red Mountain, I’d never seen so many luxury cars in my life. Where does all the money in Birmingham come from? The only comparable area I’ve seen is where I grew up in Windermere, FL where there are tons and tons of luxury cars on the roads. (That’s true of many parts of Orlando generally, too.)

    The prices on some of the property on the UAB side amazed me, in terms of its inexpensiveness. One small house higher up the mountain over looking the city was going for only around $200k. Perhaps expensive for the area, but cheap compared to what I’m used to in Orlando. And certainly cheap compared to Boston!

  22. Jason Boxman

    Also, I can perhaps relate to UserFriendy’s situation. The student debt is certainly soul crushing and it vastly limits your options. I don’t expect to ever own a house and will probably die working or on the street. And having money to start a family? LOL

    And that leaves out the reality of climate change, so it may be that it will ultimately be irrelevant anyway.

    1. polecat

      I believe that the young adults coming up the pipe will become the ranks of future gangs, and will be lead by various charismatic leaders….. cuz today’s rich elite AND politicians are certainly doing their bestest to screw everyone !

      …. maybe the election of Donald Trump is the precursor to the beginnings of a new age of North American war band culture in the middle to latter 21st Century.

  23. Anonymous

    Every time I get close to stopping hating the Boomers out of a sense of inter generational solidarity, it lasts until I speak with my father. Over the X-Mas holiday he complained that all of his kids are lazy, shiftless ne’er-do-wells since none of us have a dime in retirement savings that we could give to him. He needs our mythical retirement money in order to pay off the third mortgage, so he could afford to move to Hawaii. (He has 3 pensions and Social Security.) When I pointed out that I have no retirement savings since I will pay about $400k in student loan debts if I ever live to see the end of it, he stated that this is not true since talk radio told him that kids these days are all lazy liars and Donald Trump will fix that real quick.

    1. aab

      For the record, that isn’t precisely a “Boomer” thing. You have a terrible parent.

      Selfish retired people have been a phenomenon for decades. There used to be a bumper sticker you’d see in the Southwest on RVs: “I’m spending my children’s inheritance!” Those people were not Boomers.

      I’m sorry you have such a dreadful father.

    2. polecat

      Oh man ! … As a boomer myself ( less the financial trimmings ) …. I don’t know what to say … except to maybe leave him to spend some time at a mountain retreat somewhere ……… minus the retreat …

    3. jrs

      if you ever get any retirement savings, it would be foolish to tell him about it (maybe that’s what some of your siblings are doing :)).

  24. VietnamVet

    Yves, thank you very much for your excellent article and this web site. The crux of the problem is that the job market went to hell since the 1980s; mainly due to offshoring enacted to end wage inflation. Since then the wealth created by productivity gains has gone solely to the oligarchs. To grease the rising inequality, the ruling elite have use divide and conquer policies and have ignored middle-America dying at an earlier age. The storm and lightening against Donald Trump is because he promised to fix this once elected President. If the looting continues or if Mike Pence is elevated to President to fight a World War with Russia, the federal government will be delegitimized. It will surely collapse just as the Soviet Union fell. I will lose my government pension that we need to stay alive.

  25. Anonymous

    The Krueger and Katz study cited above got me thinking about how many bachelors degree and above degrees were awarded in the period of the study, 2005-2015. The answer, as near as I can tell, is about thirty million (I couldn’t find the link again). That means that the odds of finding a job with salary and benefits, for the college educated and above graduate, is about sixty to one against. The higher education system isn’t going to last long if this situation continues to prevail.

    These results don’t match the anecdotal experience of my wife’s bachelor’s level psychology students. They seem to be pretty good at getting decent jobs (some of which pay better than being a tenured professor.)

  26. depressed with no way out

    I’m so depressed reading your comments bickering over who is worse off among the generations. It looks like we’ve all been screwed by the actual rich who benefited by the Reagan era and the subsequent decades.
    Probably they’re happy to see us fighting among ourselves – they are that greedy.

  27. Sound of the Suburbs

    They are coming into a world 40 years after neo-liberalism started and it has done its job.

    “All for ourselves, and nothing for other people seems, in every age of the world, to have been the vile maxim of the masters of mankind.” Adam Smith, The Wealth of Nations

    Mankind first started to produce a surplus with early agriculture.

    It wasn’t long before the elites learnt how to read the skies, the sun and the stars, to predict the coming seasons to the amazed masses and collect tribute.

    They soon made the most of the opportunity and removed themselves from any hard work to concentrate on “spiritual matters”, i.e. any hocus-pocus they could come up with to elevate them from the masses, e.g. rituals, fertility rights, offering to the gods …. etc and to turn the initially small tributes, into extracting all the surplus created by the hard work of the rest.

    The elites became the representatives of the gods and they were responsible for the bounty of the earth and the harvests. As long as all the surplus was handed over, all would be well.

    Later they came up with money.

    We pay you to do the work and you give it back to us when you buy things, you live a bare subsistence existence and we take the rest.

    The surplus produced since the earliest agricultural communities was thus extracted by the elite.

    A bare subsistence existence ensured the workers didn’t die and could reproduce, why give them anymore? The vile maxim of the masters of mankind.

    Basic capitalism was how it all started in the 18th and 19th Centuries, the poor lived in squalor and the rich lived in luxury, the same as it had always been.

    Only organised labour movements got those at the bottom a larger slice of the pie, basic capitalism gives nothing to the people who do the work apart from a bare subsistence existence.

    The wealthy decided they needed to do away with organised labour movements and the welfare state; it was interfering with the natural order where they extract all the surplus.

    2017 – World’s eight richest people have same wealth as poorest 50%

    Nearly there.

    They need a bit more fine tuning at Davos.

    Some of the world’s workers are not living a bare subsistence existence.

    A bare subsistence existence ensures the workers don’t die and can reproduce, why give them anymore? The vile maxim of the masters of mankind, currently known as neo-liberalism.

    Basic capitalism, stripped of a welfare state and organised labour movements, with a global workforce ensuring an excess supply of labour driving wages down to the minimum.

    Perfect, it’s going to be just like the good old days.

    1. Sound of the Suburbs

      Maybe not so perfect.

      “The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destruction”

      The elites always forget who buys their product and services and who it is they use for rent extraction.

      All employees = all consumers (approx.)

      Maintaining consumption with debt maxes out.

      Secular stagnation and a chronic shortage of demand, those elites are as greedy as they have always been.

      They forgot productivity reached a level where the system was in constant over-supply by the 1920s, this is when they came up with extensive advertising to shift the excess. Keynes came up with re-distributive capitalism and the consumer society took off.

      It’s not the 18th century any more elites, basic capitalism worked then because supply was limited. Basic capitalism doesn’t support a consumer society.

      We worship the high priests of neo-liberalism, the central bankers, who ensure the economic system
      delivers its bounty.

      But even they can’t get it work as the debt that maintained consumption has maxed out.

      1. Moneta

        The wealth concentration is going up the curve. Next in line to get squeezed are pensioners and those living in expensive city neighbourhoods. Then it will be those elite getting money from non essentials.

        The final winners are those who control land, energy and resources.

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