Friday, March 23, 2012
-“My Generation”, The Who, 1965
The Great Recession and the seemingly interminable aftermath have significantly reduced my generation’s economic outlook. Nearly 25% of my generation is either unemployed or underemployed. We hold approximately 75% of the nation's $1 trillion student loan debt. And, as the years of economic stagnation and exploding national debt pass, the probability of my generation attaining the previous generations' conception of the "American Dream" gets smaller and smaller. Call us Generation Y, Generation XY, or whatever you wish. Just call us lost.
People in their mid 20’s to mid 30’s are the first generation in American history to have a significantly reduced standard of living than the previous generation. As the Institute for Higher Education Policy suggests (.pdf), nearly 20% of my generation lives in poverty. Moreover, a staggering 40% of us live in “near poverty”. The really scary part: the majority of us who live in poverty are college-educated. A good many even have graduate degrees.
Due to extreme economic circumstances, my generation is delaying “life-cycle” events that should be contributing to the economy. Unlike most people our age from previous generations, many of us aren’t buying houses, buying new cars, getting married, or having children. This creates a very high opportunity cost to the economy. In fact, Dr. Patrick Fagan, a senior fellow at the Family Research Council, argues (.pdf) that missed life-cycle events can reduce one’s lifetime contribution to GDP by as much as half.
Many from my generation have turned to educational advancement to escape this depression. But it isn’t helping. As financial pundit Nick Pardini recently pointed out, higher education has a horrendous ROI for us. Nearly half of us work a job outside of our career paths, and a stunning 80% of my generation’s PhDs and law grads are either unemployed or underemployed.
Baby Boomers, fearful of retiring, are crowding my generation out of the workforce by holding onto jobs. A 2010 study by the Carsey Institute at the University of New Hampshire found that 1 in 5 Americans age 65 or older still work in their careers. The AP reports that three-fourths of Boomers plan to work after retirement. And, according to the Population Reference Bureau, by 2016 the U.S. workforce will have more employees over age 65 than from my generation.
It was much easier for displaced workers from the Great Depression to return to work than it is for my generation. In the 1930s, most workers were unskilled or nominally skilled. A factory worker, for example, didn't have to worry about his skills or credentials eroding during years of unemployment. Today, however, most jobs require training and continuous learning. Years of unemployment are much more damaging to my generation than they were to the Great Depression generation.
My generation is lost, and if history is any indication, it's going to be a while before it's found. According to Yale economics professor Lisa B. Kahn, those who experience long-term economic duress as a young adult almost always face a lifetime of significantly reduced earnings.