Is an intergenerational conflict in our future?

| March 29, 2012 | 0 Comments

Have you ever met a parent who doesn’t want what’s best for their child, or who doesn’t care whether that child’s life will be better than their own? Probably not. So why are we so blasé about the fact that today’s young people are so much worse off than they ought to be?

In Spain and Greece, nearly half of all young people cannot find jobs. In the Middle East, young people account for 40 percent or more of all unemployed people in Jordan, Lebanon, Morocco, and Tunisia and nearly 60 percent in Syria and Egypt. And in the United States, which traditionally has had a strong job creation record, more than 18 percent of all young job seekers cannot find employment. 

-Nemat Shafik, on the IMF Direct Blog

Just when did we stop giving a shit? The following IMF graph is a bit outdated, but still: crisis or no crisis, the world has never been wealthier than it is now.

So why does  it seem like the situation of young is getting worse every day? Let’s hone in on the US:

  • Student loan debt has passed the $1 trillion mark. Students borrowed $117 billion last year, alone (Source: CFPB)
  • More than 4 million young people were unemployed in the US last year. (Source: International Youth Foundation)
  • Last month’s seasonally adjusted unemployment rate among those aged 16-19 (that is, the proportion of people who are actively searching for work but could not find it) was 23.8%. It was 8.3% for the wider population (Source: Bureau of Labor Statistics)
  • Almost 40% of young adults say that they’ve moved back in with their parents because of the economy. (Source: Pew Research Center)
And while it’s hard to make a direct, statistical link, all of the above might explain why young people are having less children and delaying marriage.
While there’s a specific Obama Administration initiative targeting the student loan issue, there doesn’t yet seem to be any urgency given to the fact that young people in America are falling behind and might never catch back up. On the contrary, one of the few recent bright spots is now in danger.
It seems that President Obama’s healthcare reform has been one of the few positive developments for younger Americans. This is what Gallup had to say in January:
The percentage of Americans aged 18 to 25 who are uninsured has been declining since the fourth quarter of 2010. This decrease has coincided with the implementation of a provision of the new healthcare law that allows this age group to stay on their parents’ plans.
As I’m sure you are aware, the healthcare reform act is now being challenged in front of the Supreme Court with a risk that it might be greatly altered or ended altogether. Talk about kicking a man when he’s down!
John Kay of the Financial Times had an interesting perspective on the this generational divide:
In 1968 we marched to change the world, and shook the self-confidence of the political elite. But when this failed to change the world, my contemporaries changed their clothes and took jobs in investment banks. Then they presided over, and benefited from, the longest bull market in securities in history.
Here Kay hints at a very interesting point that has many implications for where things go from here.
To put it bluntly, Kay and his generational cohorts were paid off. A rising tide of prosperity lifted all boats, including theirs. They couldn’t manage to change the world, but the presence of economic opportunities for them meant that they had a stake in not destroying it, either. Jobs, and an absence of debt, helped to purchase their peace.
But young people today are getting the distinct message that they’re out of luck. So, I ask you, what’s going to buy their peace this time? Do you think we can avoid an intergenerational conflict? What will it take? Share your thoughts in the comments.

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Category: inequality