The economic generation gap

One of the promises of American life is that each generation should have a better material standard of living than the generation that went before.  That was true of me and my parents.  The house I live in alone is larger than the house in which my parents raised my brother and me.

But this is not true of the generation coming after me.  Younger people face a more restricted world than the one I grew up in.  When I was in high school and college, anybody could get a job of some kind.  The high school graduate got a better job than the high school dropout, and the college graduate got a better job than the high school graduate, but nobody who really wanted to work went without work very long.

Education at a state university was affordable for the middle class, and working your way through college was do-able for poor students.  Nowadays students graduate with a crushing burden of debt that can take decades to pay off; it is a form of indentured servitude.  Yet the need for educational credentials is greater than ever.

When I became a business news reporter for the Rochester (NY) Democrat and Chronicle in 1978, my qualification was that I was a capable reporter and that I wanted the job.  By the time I retired in 1998, we were getting job applications from young people with MBA degrees.  I often remarked in the 1990s that if I had been applying for the job I had, I would never have been able to get it.

Labor unions accepted two-tier (and sometimes three-tier) wage contracts, in which younger workers started at a lower wage rate than their seniors did, and would never catch up with the older generation.  We see a similar philosophy with proposals for so-called Social Security reform, in which the reductions in benefits are supposed to fall on those still in the work force while existing retirees such as myself were “grandfathered” in.

All these things have been going on for a long time, but the current recession makes things much worse.  The economy is still bleeding jobs, and it is not clear when, if ever, this can be made up.  It is no joke to be middle-aged in this economy, but it is tough to be young and competing with middle-aged people for entry-level jobs.  No matter so many young people are living at home.

All the things that are necessary to wean the country off debt will mean a slower-growing economy and less opportunity for young people.  It will not be possible to bring the federal budget under control without reducing military spending, and the military is a major employer of young people.

There is a good article on the impact of the recession in the March issue of The Atlantic Monthly.  The author, Don Peck, points out that many members of the younger generation are psychologically unprepared for the harsh world they will face.  I came of age in the greatest economic expansion this country has ever known, but remembering the admonitions of my parents, based on their experience of the Great Depression, to work hard, save my money and be prepared for the worst.  The generation coming of age now has been taught to expect the best, but faces the worst economy since the 1930s.

[Update 9/5/10]  This infographic shows how college students are being exploited by lenders.

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