As a member of Generation Y, it is hard to have much sympathy for the "plight" of GenY compared to pretty much any other generation in world history. We haven't been drafted into foreign wars or had to suffer through a real depression. A third of us didn't die in an influenza epidemic. Our women and minorities haven't had to face entrenched and legally immovable workplace discrimination. We have had to face no real looming foreign threat, let alone a nuclear one. Most of us (who are called "GenY") didn't have to escape persecution or immigrate with $1 in our pockets with a chance of being turned back at the border, or get spat on by natives when we arrived.
With the help of technology, the Pax Americana and a stable world order, improved healthcare, reduced social barriers and relative economic stability, the generation born in the 80's to 90's is probably the most privileged. Generation. Ever. In history. For 15,000 years of human civilization. I mean, it's now considered normal (and even a human right by some) to take 2-3 weeks vacation every year. So when I read that "I got a $150,000 education and now I have to work for only $40,000," or (as I've heard before), "I have a college education, I shouldn't be working at Pier One," I just want to vomit. My immigrant grandparents would have killed for the chance to work at Pier One. The world doesn't owe you a living because you graduated from a top tier school with a degree in Environmental Studies, or even took out a loan to go to law school.
Look, it's not like Generation Y--or, specifically, individuals in Generation Y like in every generation--don't have any problems, but you have to have a sense of perspective. Success for any generation has always been about hard (productive) work, to better one's self and one's family. The American Dream has always been about being born into rags and working into to riches, not from being born into riches and being owed something by the virtue of your privilege, which is what this "death of the American Dream" nonsense is about. By this article's own admission, we've been so warped by our parents' relative privilege that it's hard to see the big picture. Look at the big picture.
Not that I'm defending grumblers, but I think a lot of the upset and anger comes from the fact that the opportunities aren't as readily available as they once were. The developed world is a much more regimented place than it once was, with fewer employers will to take chances on the people they employ. The classic trap a lot of Gen Y find themselves in is that they're not considered for jobs because they don't have experience, and can't get experience because they can't get the jobs. It's a pretty good catch-22.
I don't know. There have been a lot of stories how young people are just a lot less willing to take risks than they used to be. I can tell you for a fact there are wide open $120k jobs in North Dakota and they are desperate for young up-and-comers, but no one wants to move to North Dakota. Older generations just didn't have that privilege.
A generation ago, Gen Xers would leave home and move across the country just to have opportunity. Now, people are living with their parents til the age of 30. It's partially a change in culture and partially a consequence of not needing to really take risk to get ahead. The prevailing attitude is "I deserve this, so I'll just wait and it will come to me." At least that's the attitude among many of my peers.
One wouldn't doubt that there are well-paying jobs in North Dakota, but with a total of 700K people living in the whole state one immediately ask just how many $120K jobs there are, and how many applicants there are for each such job.
Lots? The whole state has about as many people living in it as the Columbus metro area, and the price of housing has been bid through the roof. ND isn't going to make a dent in the national unemployment statistics, and with a 2-bedroom apartment going at USD 2500/month no one moving there is going to get rich either.
The classic trap ... is that they're not considered for jobs because they don't have experience, and can't get experience because they can't get the jobs
This has always been a problem and IMO the solution in previous generations was that a time came when the job market was tight and companies just had to hire somebody, so they were willing to take a chance. Or people at the top had retired, and everybody moved up, and there was some slack in the budget, so they brought some new grads on board. With a persistently weak economy and people delaying their retirement, both effects are getting suppressed.
Fewer employers taking chances? What about Gen Y being the generation of job-hoppers? It's hard for a demographic to build up seniority in the workplace when they're so mobile between them.
You're saying that every generation starts with nothing, as if they were new immigrants to this country. If so, then the American Dream is dead. Most immigrants worked hard because they believed that they could pass on a better life to their children. They saved to put their kids through college so that their future generations could have a nice life, white collar jobs, take vacations, etc.
But if they knew that future generations would be worse off, they probably wouldn't have bothered.
I totally agree--the whole point of the American Dream is to pass on better opportunity to your children. The fact is, that GenX largely accomplished this (for maybe the first time in history). In terms of being able to create even a marginally better life outcome, GenY is largely a victim of our parents' success. My only point is that our "victimhood" has to be put in historical perspective.
Along similar lines, we aren't in factories building widgets. The concept of a fixed-hour working day, as opposed to "What shit needs to get done?", is something that should at least be open to question, especially in information industries.
If I can reduce the runtime of billing routines by half across the board, why the hell shouldn't I take a month off? When things are time-sensitive they're on such small scales (milli-, micro-, nano-) that you need a machine--everything else is just humans being nitpicky.
People should be able to work however much or little they need to get their work done, whenever is best for the work.
Another thing occurred to me, which is that the identifier of "GenY" usually comes with the implied notion that we are the children of GenX--in other words, that our parents were boomers, a very specific socioeconomic group that is mostly made up of the white, educated, middle class of the 60's and 70's and excludes large swaths of the American populace: both those who immigrated post-1970 and those whose ascendence didn't take place in earnest until the mid-70's (most African Americans and Hispanics). The idea that all people of our age group are members of GenY is a very GenX-centric notion, based on our supposed genealogical link to the boomers and the Greatest Generation, and the term itself is prone to subtle prejudice. Many people of our age group are not a member of this genealogy, and thus probably (although I can't say for sure) don't identify as "GenY."
The obvious implication is that for GenYs to claim persecution by the system they may not be realizing that they subconsciously exclude people that often are much more persecuted than they are, adding another myopic layer to their solipsism.
One of the puzzling parts of the current working situation is that the people who are working seem to be putting in way more hours and effort than they used to.
What I can't put a finger on is the underlying reason why me and about all of my working friends have almost zero time anymore to do recreational activities, or to spend time with our families and friends. We workers seem all over-burdened with our work. But, it hasn't always been this way. Our workloads have been slowly but steadily creeping up since the 90s.
And, the companies that we're working for are overflowing with cash. Yet, these same companies aren't hiring new people to alleviate the situation. Often, the excuse I hear is that there are no qualified people to hire.
To your employer, there's no situation that needs alleviation. They're very happy that they can get you to work more hours for the same pay, and even happier that they don't have to pay increasingly costly health benefits for an additional employee when one employee can be made to do the work of two. They obviously don't care that you're suffering.
And "no qualified people to hire" is a euphemism for "no qualified people willing to work for the low salaries that we're willing to pay them for the long hours we expect them to work." Double that salary and they'd probably have qualified candidates flying in from across the country and pounding down their doors.
At least in software, salaries are high enough and there's even enough competition on culture that this can't really be the case. Furthermore, it's not actually possible for one employee to do the work of two. There actually is a shortage of qualified people in the world.
The fact is, business has become increasingly more sophisticated and, consequently, difficult over the past several decades. Operations have become increasingly driven by increasingly sophisticated statistical techniques and modeling and much of the drone work has been replaced by computers. In the early days of digital electronics, actual engineers were paid to minimize logical expressions using Boolean algebra or Karnaugh maps. These days we use algorithms and engineers have to solve more difficult problems. If you had the chops to be a white-collar worker at Sears Roebuck corporate in 1960, you don't have nearly the chops required to be a white-collar worker at Amazon corporate in 2012, because there's been half a century of innovation in operations by dozens of firms trying to beat Sears Roebuck.
The end result is that more jobs require numeracy and specialized skills, but if anything there are fewer people with these skills because mathematics requirements were dumbed down to get more people into universities and out with degrees. The stereotypical unemployed Gen-Yner is a liberal arts graduate, and for good reason. The engineers are fine.
Says who? Consider the state of the physical sciences. Employment in physics has been problematic since a long time back, chemistry has suffered from outsourcing to East Asia for ten years, and in biology the pharmco bubble is bursting as we speak.
That leaves computing. It's not that hard to become qualified to B.S., in this very place we see encouragements to drop out of college and "just start a startup". That's not a sustainable model.
You're right that science is problematic, but I said engineering. Engineering tends to be paid for by the market, science tends to be paid for by academia and government, which means employment trends in science are slightly more arbitrary.
You are forgetting the chemical and pharmaceutical companies, which always had R&D departments that employed chemists and biologists.
Employment in discovery has shrunk, both because it has become too expensive to bring a new drug to market, and the process end was offshored to China, starting about ten years back. No need to invoke the government here.
As you're pointing out, the private sector has relatively little interest in employing scientists. That's fine--I was mainly talking about business and engineering.
First you're telling me that pharmaceuticals aren't employing a lot of scientists, and now you're telling me that they are. I'm not sure where you're going with this.
I think "relatively little" (as opposed to "very little" or "none") is a fair characterization of what you said.
It appears that your point is that science graduates have mainly found employment in academia. This is just not so - chemists and biologists have traditionally found employment in the chemical and pharmaceutical industry.
My points is this: for a few years now chemistry has moved offshore, there have been heavy layoffs in the pharmaceutical industry, and the synthetic chemistry has been off-shored to contract shops, mainly in East Asia. But the pipeline is long, and any chemist who began their studies in the early 2000s, when the trend started, is (justifiably) pissed off that then cannot find work in their field even with a solid degree.
There is talk about alternative career path, but the observation is that those pay less then the original career promised.
We see the offshoring trend continue, the biological research is moving offshore as well, the pharmacology bubble is bursting, and soon only management will remain stateside.
This heavily afflicts people with advanced degrees. Considering that the common wisdom on this website is "skip college, get to work with the equivalent of a bachelors from Coursera/Khan &c", I cannot see that demographic unaffected. In India and China you can get an excellent education, and you will work for much less than an American or European. I cannot see computer engineering unaffected by the offshoring trend.
You know, I didn't say anything directly about people with advanced degrees in the sciences in my first comment, and I think I should have left it at that because you're picking a fight with me over a topic you brought up.
You were the one who defined the "stereotypical unemployed Gen-Yner", as "a liberal arts graduate, and for good reason. The engineers are fine". This just isn't the case, it isn't by a long shot. Anyone who makes statements risks having them checked against reality.
It's hard to see how your statements about biologists and chemists is at all relevant to my statement about engineers. If I meant "STEM", I would have said "STEM", not "engineers".
I'm so sick of hearing about how bad we--us poor, lost kids from Generation Y--have it. I'm so sick of hearing about the odds, about the unemployment rate, about how everything's our fault because we're too entitled, or about how nothing's our fault because the economy you see.
I live in a rented house with several other young folks trying to get by in our industry. I'm working today instead of taking a bus home to see my family. I'd work tomorrow if I needed to. My computer equipment is worth more than I have in the bank, because that's my capital investment in myself and my work.
My roommates are all fleeing rolling boulders of student debt--a situation I'm not in only because I devoted a sizeable chunk of my old salary to paying it off. Once that debt was paid off, I quit my job, because the company was never going to go anywhere with its attitude and codebase.
We don't have or want picket fences, we don't have two cars in the 'burbs, we don't want to sit in front of the TV and veg out. That's something we inherited from the boomers and Madison Avenue.
The people I know, whether they're architects, or lawyers, or coders, or dealers, or hustlers, all are in pursuit of the same dream that our forefathers pursued. We're all good people, with strong work ethics and a desire to see our kids grow up better than we did into a world kinder than ours.
We want to live in a country where you can build a business, help your community, and do so without worrying about getting blackbagged or destroyed by bureaucracy, where you can smoke a joint or drop acid and go into work that afternoon and change the fucking world with a commit or a hammer.
(And we're doing this in the Midwest, in Texas no less--no Bay Area bubble for these views!)
We aren't afraid of evil brown people somewhere else in the world, and we don't want to cast a "supporting vote" in a system as obviously corrupt and rigged as the current US government. We don't want to take away people's rights because we're afraid for our own little lives and our stuff from Ikea. We don't care about your abortion, or your sexuality, or whatever you do in your free time.
Don't tell me, don't show me, don't bloody try to sell me this notion that the American Dream is dead--we're just returning to its roots.
An exercise in trading anecdotes isn't going to get anyone anywhere. The fact that the people you've surrounded yourself are relatively well off does not offset problems surrounding unemployment and falling wages.
I got the impression that GPs point was that the American Dream is about improving ones own fate (especially when the environment is hard) rather than complaining about unemployment and wages.
Great. Then obviously we should make life even harder for the masses so they can achieve even more glory from overcoming the even more overwhelming odds. And if they fail, they deserve what's coming to them!
I think of the American Dream as more structural: the idea that, unlike in countries with strong, hereditary class systems, anyone could succeed in the U.S. with effort, because your success was less tied to your pedigree. Imo, statistics, rather than anecdotes, are a good way of determining the extent to which that's still true.
We're not "well-off" by any stretch. We're happy, we're motivated, but we're all sitting on respective powderkegs of fiscal disaster. I'm uninsured--one slip in the bathroom and I'm bankrupt. We live in a house because we can split rent and utilities super cheaply and it lets us live next to where we like working.
I'll be the first one there with you waving signs about unemployment problems and falling wages--do you have any idea how annoying it can be to get livable rates in my area? Where are you from sir (or madam)?
My point was that some notion of the "American Dream" is far from dead or ailing--it's merely changed to something less materialistic.
This is getting rather silly. Ask any immigrant what "the American dream" is. Take an average of their responses and you'd have a reasonable approximation of the American dream. Nobody in their right minds would redefine the American dream to be 5 uninsured happy motivated apartment sharing guys one bathroom slip away from bankruptcy changing the world with their precious github commits. I lived 5 years in the texas heartland... nobody I know meets that definition. People are living paycheck to paycheck ans there is genuine concern that the American dream has passed them by.
Yes this is trading an anecdote. It is also sharing his own experience and perspective. And his hopes and dreams.
Which differ from the journalist's take. The American Dream not so much fading as changing.
Reciting the same grim statistics about unemployment and falling wages yet again is what "isn't going to get anyone anywhere." But this sort of conversation? Quite the opposite.
I hope things work out for your friends--stamps are a good temporary measure while you get back on your feet, and if they're good folks I'm sure that'll happen in no time. :)
As far as workaholism goes--cliched though it may be, the saying "If you do what you love, you'll never work a day in your life" is something I've found to be quite true.
It's true, but unhelpful. Until they're all replaced by robots and thrown out into the cold entirely as useless, unemployed bums, someone has to clean the toilets, stack the shelves, assemble the iPods, deliver the chemical supplies from one lab to another, etc. I can't abide the notion of simply condemning some fixed portion of society to suffer because the rest of us are too stingy to pay them a living wage, nor a majority of society to suffer because a combination of a deflationary demand crisis and rising automation have rendered their labors permanently obsolete.
EDIT: Speaking for myself personally, I quite like being a grad-student and researcher, but I really felt that programming in the corporate world was... just not for me. I'm actually pretty far up the skill chain and provably (ie: I've done it before) capable of bringing in a good deal more than a subsistence wage for myself, but that still doesn't mean I love the thing that makes me the most money or gives me the most sustainable career path.
(Last Sunday I spent two hours powersnaking out a clogged commercial sewer line, so believe me that I have sympathy for shit jobs.)
I completely agree with you both that we shouldn't condemn people to work annoying jobs and that we shouldn't be corporate drones (regardless of pay).
I think that the key to fixing a lot of this is to have it easier to move around and find interesting work--if I get sick of writing code, I should be able to find a gig doing plumbing, or carpentry, or stacking, or whatnot, until I'm ready to code again.
I think that the problem we're dancing around as a society is that physical jobs are not selected-for by the market as much as they once were (due to either automation or foreign labor), and professional jobs are a few JSON blobs and sorting algorithms away from being deprecated.
We need to figure out how to deal with an educated, intelligent, and most importantly easily-bored citizenry. It's no longer enough to say "Well, everybody has to work jobs they hate, so suck it up!". If we can't solve around that, well, we're in trouble.
Gen Y's and Baby Boomers are the two largest examples of irrationality that this nation has ever seen.
Gen Y for thinking that you can just do whatever you want and expect a high salary for it. I look at my peers from high school and can't believe some of the entitlement issues they have.
Boomers for thinking that they could continuously f* over an entire generation with their robbing of social welfare systems and expecting people with no right to vote to pick up the tab 30 years into the future. When payroll taxes reach 20%, Social Security Recipients will become the next Westboro Baptists.
To be fair some of the feelings of entitlement and the sense of "do whatever you want" of Gen Y come from the boomers.
When growing up I remember being told from an early age by adults that my generation would have it great, their generation was putting everything in place for peace and prosperity such as access to education, better medicine and technology etc.
The overriding message was really just to work hard and everything would come good. It didn't matter whether you studied the liberal arts, technology or just got a job straight out of school and worked your way up.
Now Gen Y have grown up and complain "getting a job with liveable pay and reasonable stability is hard, and I have a masters!" they get told "the world doesn't owe you a living!" which is technically true but non helpful.
Really? You'd think the generation that let World War I happen, or the many generations that practiced lynching as not merely a means of punishment but a form of entertainment, or the generation that thought Andrew Jackson's bank policy was a good idea, would have us beat.
I would be more worried if your peers were satisfied with drudge work for low wages. No kind of progress is possible if you're content to live in the gutter.
Also, if wages were rising, social security taxes wouldn't have to go up at all.
Many law firms are doing automated textual analysis of legal work that used to be done by associates. The fact that they are still making more profit implies that they've just gotten more efficient. I suppose that there are a set of legal software companies that are probably profiting pretty well on this.
"Similarly, the number of hours logged by first-year and mid-level legal associates -- a productivity measure of young lawyers -- fell 12 percent from 2007 at some of New York’s largest law firms, says Jeff Grossman, national managing director of Wells Fargo Private Bank’s Legal Specialty Group in Charlotte, North Carolina. Yet profits per partner climbed $50,697 to $1.5 million on revenue of $66 billion last year, according to a separate survey of 86 of the world’s top law firms by The American Lawyer magazine."
"Textual analysis" also sounds like the sort of thing that could be profitably outsourced. I understand that in the medical world, reviewing medical images may now be done by qualified technicians in lower-wage countries.
The employment problem is precisely why I do not think the housing market will ever "recover". Housing prices did not crash, they simply aligned themselves with current and forecasted salaries. Attempts at raising housing prices to "normal" levels is a fools game. Create the jobs and the salaries first and the rest will follow.
I don't understand why everyone wants housing prices to go up. As a person looking to buy a home in the near future I certainly do not hope the housing prices head towards their prerecession levels.
Because people are fooled into thinking that houses are investments as opposed to places to live. They all feel like fools for buying high, and want the world to adjust to their expectations.
Why, they're investments. Of course you want prices to go up!
You're sinking a huge quantity of money - presumably, above that of an equivalent rental unit in your region - and by golly, you need returns on that or else you're just fritting it all away.
It's all compounded by the fact that housing is the only major asset investment that the vast majority of people ever engage in.
They're only an investment if you buy more housing than you need. After all, you need housing, so when you sell that home at increased value, you will need to use that revenue to buy new housing which has also risen in cost.
In short, only if you can sell your home and buy a cheaper home can it be considered an investment. Otherwise it's just non-liquid capital.
In theory, if you buy enough housing to fit a few kids then you'll have more housing than you need by the time you're looking at retirement, so you can cash out your 'investment'.
Of course, in reality this never seems to actually happen.
Lots of people are doing this / have done exactly this.
My parents and many of their generational peers (boomers +/- 10 years) did the large house thing in the 1960s-1980s in order to raise the kids, then sold their large house and moved to a smaller house or condo as the kids moved out in the 1990s-2000s.
Economic models suggest greater economic activity around housing booms - it boosts capital flows, job creation, employment for blue-collar workers. That's why "housing starts" is an indicator watched by economists and investors. That's the macro-economic view, and is usually favored by governments, who can create economic waves by tweaking incentives in one industry.
From micro-economic perspective you're right, the cheaper the better, money you save on not paying your mortgage will be deployed somewhere else.
A lot of this country is "built out" under current zoning regimes which require auto-oriented detached single-family construction in most of the country, which is extremely land-intensive compared to traditional walkable urbanism.
Because land use in most of this country is very tightly regulated to prevent densification (or even cause de-densification in a lot of cities), most construction of new housing units has been on greenfield land at the outskirts of cities, so housing affordability has been correlated to access to new greenfield land at a city's edge, first via streetcar and street, then via expressway.
As the interstate highway system has been completed, and all developable land within a reasonable driving distance of the most economically successful metro areas has been built on, people have instead been forced to bid up existing housing, hence the ridiculously high housing prices in most coastal metro areas and ongoing gentrification of central neighborhoods in these cities. Moreover, as time goes on, many people who've grown up in single-family-only, automobile-only neighborhoods have discovered they like walkable urbanism better, and the current zoning regime guarantees it is in short supply in many markets.
Housing prices are already being "inflated" by the low cost of mortgage debt. If interest rates climbed to something like 6-7% for a 30-year mortgage you'd see values drop.
You are perhaps correct, SF Bay Area housing has pretty much 'recovered' to its 2009 levels in terms of resale. I don't agree with your assertion of the 'alignment' however. To support such a claim you would have to show that house prices were a dependent variable of salary, and my observations over the last 20 years of home ownership has not shown that correlation.
The article focuses on a couple of lawyers. Lawyers are classic parasites. They need to find money-making entities to act as "hosts". When the economy is sinking, there are less healthy hosts for the parasites to target. The few parasites who are lucky enough to find hosts that can act as hosts will be in good stead (the article admits profits have risen at law firms, even if hiring has plummeted). It's strange to think the American Dream (How do you define it? Is it home ownership and progeny?) must be funded through parasitic behavior.
Be a host not a parasite and you will always be able to live the Dream, no matter what direction the economy goes. That's because you create value instead of merely searching out others who are creating it.
Back in 2008 I was reading articles based on previous financial crises saying that after the kind of debt crisis that the USA was then going through, the average was 10 years to really recover, followed by a return to normal growth. So, 4 years in, things still suck.
If that is true, we should have about 6 years left until the American dream starts to work again across much of the country. Unfortunately for everyone who entered the work force in that 10 year period, initial poor wages tend to turn into lifetime poor earnings. A whole generation does indeed look set to lose out economically for their whole lives.
But if you can adjust to current reality, your future is likely to be better than your present. You just have to set expectations realistically low.
As population increases and resources dwindle, we get closer to subsistence living or even a population crash. The decade-long cycle might be close to breaking, then.
Yes the trick is to lower one's expectations. Ultimately we can be content with little more than a warm dry place to sleep and enough food.
Less jobs for lawyers generally seems like a good thing to me. Like investment banks lawyers do not create much (any?) value. That's a good sign for society. There may be some hope left.
Now it's not good for those who wasted a lot of money on a law school. They made a bad decision and will adjust.
And yet there are more and more law schools gleefully suckering new students into the major and getting rich off of it, while not being able to provide a return on the investment. That's a very bad thing.
Lawyers as a whole are not a symbol of malaise. It really depends on what kind of lawyers are around. You increase regulation in an industry, then companies in that industry are going to need to hire lawyers to advise the companies on how to comply. You're also going to need people familiar enough with the law to write good regulatory legislation.
You want startups to make deals with each other, and to receive investments? You're going to want lawyers who can sort out the terms and put it in writing that reflects the intent of all stakeholders. So much misery and broken friendship between co-founders could have been easily relieved by using contracts instead of handshakes.
If you're investing in a company, it's likely you'll want a lawyer to perform due diligence on the company's current contractual obligations.
Yes, by all means, let's sue the schools! I was promised a six figure job if I finished this expensive law degree, but there was a recession and now I have to shift gears.
I think this sort of view-bubble perspective adjustment is very healthy and helpful for understanding our businesses' places (and strategies!) in the larger economy.
From the article: "Three and a half years after the worst recession since the Great Depression, the earnings and employment gap between those in the under-35 population and their parents and grandparents threatens to unravel the American dream of each generation doing better than the last."
There have been many postings to Hacker News recently with similar themes. The situation described increasingly looks like the situation in the worst-off countries in western Europe, where an ossified social welfare system insulates the older generation (approximately people from the oldest people now living down to people with birth years before 1970) from the economic situation of the younger generation. The United States used to be much less like that, but the Silent Generation (roughly, the people born during the Great Depression) throughout their lives acquiesced in government policies that resulted in an enormous income transfer to people in their generation at the expense of younger people, including Baby Boomers like me.
[AFTER FIRST EDIT: A friend who is a Ph.D. policy analyst for the federal government sent me a link the other day raising the question "Has the US median household income really stagnated over the past 30 years?"
(point 6 in the link). I think the statement is surely correct that actual ability to spend on the part of Americans on goods and services they desire has increased in all income quintiles over the last thirty years. Some economic statistics don't take account of tax policy and transfer payment (entitlement) policy well enough to reflect the actual economic well being of American families. Official inflation statistics have also badly overstated increases in "cost of living" throughout my adult life, failing to take into account changed consumption patterns and changing (improving) quality of many goods and services, thus making people think they are poorer than they actually are. By observation of actual consumption patterns, young people today are better off in general than young people a generation ago, which is the consistent expectation of American culture.]
I support United States policies that move in the direction of east Asian rather than western European patterns of government spending and social welfare, putting more of the investment in future generations back in the hands of families and less in the hands of bureaucrats. I'm in favor of a big boost in the minimum age for all kinds retirement benefits (Social Security, Medicare, etc.) as the only possible way to keep taxation for those programs from crippling the opportunities of my children. (Yes, I support that even though I am middle-aged and that will put off my retirement. I'm already slated to retire well after age 65 by the last Social Security reform that was passed in the early 1980s to favor the Silent Generation.)
I'm also in favor of greatly expanded parental choice in education so that families with children have the power to shop to help children gain good primary and secondary educations that launch the children into adulthood with a reasonable chance of employment. I live in the first state (Minnesota) to have charter schools, to have statewide public school open enrollment (the school district in which I live has enrolled students whose residence addresses are in FORTY-ONE other school districts around the state), and to have statewide dual enrollment of senior high school students in college-level classes. Even at that, I was a homeschooling parent here, and there is more that Minnesota and every state in the country can do to expand parental choice in education. But the parade of horribles that some people claim will happen if parents gain more choice has NOT happened in Minnesota over the last quarter century, and more states ought to at least emulate the example of my state, where educational achievement compared to educational spending is moderately high by the unambitious standards of the United States. I'm glad that through homeschooling and other alternative approaches I used to educate my children that now my oldest son, already grown into adulthood, gained sufficient work skills that he has gainful full-time employment even in today's bleak job market. His generation should be spared from the policy mistakes of my parents' generation.
ANTICIPATORY EDIT NOTICE: I posted an outline of what I think the policy problem is here first. I've been looking up some sources and may do some more edits as this thread continues to interest other participants here on HN, until I run out of time on my edit window.
> I support United States policies that move in the direction of east Asian rather than western European patterns of government spending and social welfare, putting more of the investment in future generations back in the hands of families and less in the hands of bureaucrats.
Just curious what you mean by this. East Asian and West European nations do have very different models of political economy compared to each other and the US, but both of them involve a much greater degree of state direction than even very liberal Americans would tolerate.
Also not sure how your ideas on educational policy fit there. Every East Asian nation I know of regulates education with extreme top-down strictness from the national level, even where they do allow/subsidize non-state schools.
You've picked on the worst-off countries in western Europe, but tell me about the best-off like Germany or Scandinavian countries. As far as I can tell, they have pretty generous social welfare schemes but are pretty sound economically. How does that factor into your model? Could it be that other cultural factors are at play?
I think that may be a hint that he's blaming the wrong things: it's pretty strange to blame the U.S.'s social-welfare system for the country's disparities, when the U.S.'s social-welfare system is so stingy. Social Security is not why the older generation has so much more money, because it's pretty impossible to get rich off a social-security check in the first place (I know elderly who live off social security, and they live at a subsistence level). The well-off older people with huge retirement accounts got them from the private sector and the stock market.
What's changed is that the '60s-'90s economic/employment situation is probably not going to repeat itself. My dad had basically a guaranteed-for-life job once he got a college degree, and a generous defined-benefit corporate pension, neither of which really exist anymore. And if you didn't go that route, you could apprentice in a skilled trade and also have a good middle-class job.
The most ossified countries are the ones with the most expensive real-estate (places like urban italy, japan) where the birth rate collapses because the young cant afford to raise/support urban families. The US is now entereing that phase. The older generations are grandfathered (excuse the pun) into cheaper asset bases (10x incrrease in housing pricing in 40 years, etc) so even if they are not making $$ income they are controlling the much of the critial assets. Gen Yxz etx are just increaing their asset values (through externalities) by being young and hip and beautiful and in the neighborhood. That kind of think.
On the other hand, the income streams of the younger generatonis look much more like annuity than perpetuity. Iven if you make nice earning for a couple of years, housing/college debt is predicated on 30-50 years of consistent earnings. The consistency of any person X earnings today is pretty unlikely to persist. Even a successful person can be made obsolete in a 5 yrs timespan (say--company is sold, market changes, etc). This is thus leading to entirely odd outcomes as there is a mis-match of earnings/liabilities for personal balance sheets for teh yound. ie, moving jobs/et vs massive debt it takes to run housefold/pay for future kids school, etc.
Its also an equity problem for texes. one or two good years get taxed and two or three lean years later, you lost a bit chunk of earnings to takes. if you had smooth earnings, you would pay lower taxs, etc. whereas the older generation is sitting on tax-free capital gain on housing, so low income/low taxed, yet they are conrolling massive asset value.
This system is what killed japan culturally. zero percent interest rates will do that to you. so the future looks bright if you think the lottery style outcome is a good one to play, but on average it is losing bet except for those selling tickets.
Just look at the US tax code to figure out why most of the money in the hands of old white people. The tax benefits of IRA/401K accounts really favor people who have the guts to cut back on consumption and save over the years.That is all money that didn't get spent. Some say it increased the savings rate but did the increased savings really help the country?
Based on talking with Norwegians, who are quite numerous in my part of the UK, the relative health of their social welfare schemes compared with the UK's mostly due to a much, much higher level of taxation, and a huge cultural difference regarding levels of entitlement.
The `professional' unemployed, for example, don't appear to exist in anything like the same numbers in Norway, which removes a significant source of drain. Early retirement, which was fashionable here for a good number of years, is almost unheard of there. The expected level of pensions in Norway is lower too; here, people employed in the public sector routinely expect their pension to be ~50% of their final salary.
Taxation on nearly everything makes it much more expensive than it is over here. One notable example was the sports car of a man I know: here, it cost him about £30k; in Norway, the exact same model would have cost him more than three times as much. (That's an apples-to-apples comparison -- I'm not erroneously comparing a Kroner amount to a Sterling amount.) Another thing he was amazed about was how `cheap' cigarettes and alcohol are in the UK; somewhere between one-half and one-third the price they are in Norway.
I don't know enough about Germany to explain their success, but my impression is that it's partially a cultural thing, and partially that they still have a strong, manufacturing-based economy.
I'm from the UK, recently moved to work in Germany. The tax is high by the standards I'm used to but the infrastructure and quality of life is much better and things are much cheaper to buy (food, rent & many household goods). There are major cultural differences though. Personal debt is frowned up - good luck in trying to use a credit card there and they don't have the culture of borrowing to buy (invest in) real estate in the same way.
There is also a subtle sense that sharing resources and participating to make them as good as possible is the logical approach to things, and it feels 'socialist' in a modern sense. I'm struggling to describe it but there is definitely something there when they prioritise what, where and how to spend money that is difficult for Brits to get their head around.
Also, I know a fair few Swedes and they all comment that they like our country but it's where they come to slum it and have fun. We were described as 'charmingly rough.'
This doesn't counter your main point (taxation in Scandinavia is much higher, as part of their social-democratic system), but your specific examples are "sin taxes" and not really intended to raise significant revenue. The Nordic countries all have very high alcohol taxes due to problems with alcoholism, and all of them except Denmark restrict alcohol sales to the state liquor monopoly, which has high prices, and purposely restricted hours to attempt to discourage binge drinking (e.g. the Swedish stores close at 3pm on Fridays, and don't open at all on weekends). There was a strong prohibition movement in the early 20th century, around the same time that the U.S. had one, but in the Nordic countries the tax/monopoly model narrowly won out over outright prohibition. Automobile and cigarette taxes are also there primarily to discourage greater use of those products.
The main taxes intended to actually raise revenue are corporate/personal income taxes, and the VAT.
> I support United States policies that move in the direction of east Asian rather than western European patterns of government spending and social welfare
This is going to be very difficult to pull off without a massive cultural change. The Confucian influence on East Asian culture has resulted in a much higher degree of filial piety (孝) than in the West, which makes it possible for people to live in old age without social welfare. I just can't see Americans taking care of their retired parents, nor can I see the parents being OK with depending on their children.
> I'm also in favor of greatly expanded parental choice in education so that families with children have the power to shop to help children gain good primary and secondary educations that launch the children into adulthood with a reasonable chance of employment.
This is also untenable in most of America due to the lack of good public transportation and the low population density. In fact, such a system already exists (to a degree) in NYC, the one place where population density and public transportation infrastructure is quite similar to Asia. But in most American cities, the good schools are in the suburbs, which are usually in separate counties from the city.
And the minute that you try to make the schools children attend unrelated to where they live, the wealthy parents will simply pull their children out of public schools and send them to private schools instead (we saw this before with forced busing). And without the well-off students as their peers in the public schools, the poorer students won't improve, no matter how much money you throw at the situation.
In fact, I saw this problem in the (good) public suburban school system I was in. Despite it having a desegregation program that brought poor black students from the city (by way of a 45-minutes-each-way bus ride) to my school, I almost never interacted with them in the classroom because of separate tiers of education for gifted students starting in the 7th grade.
And don't forget that once the wealthy have pulled their children out of the public schools, they'll vote for ballot initiatives and candidates that reduce funding for public schools. The poor, who care less about the quality of education their children are receiving, won't bother to fight back.
> the parade of horribles that some people claim will happen if parents gain more choice has NOT happened in Minnesota over the last quarter century
You're ignoring the fact that Minnesota has one of the whitest populations of any state in the country. I can assure you that an undercurrent of socioeconomically-associated racism still exists in large swathes of the US where there are significant black and Hispanic populations. While most people don't mind if their children associate with middle class black and Hispanic children, they certainly don't want them associating with minority children from the ghetto. And for the most part, the kids follow their parents' lead. At my school, there were some children of African and Hispanic immigrants, whose parents were highly educated and had jobs in engineering, medicine and science and kept their children on the straight and narrow (usually much more so than the white parents did). They were treated exactly like any of the white children, and often used as examples of how racism had been "eradicated" from the school system. But in reality, people wanted nothing to do with the students from the ghetto.
This is the reason why charter schools have become so popular in Minnesota, but remain politically untenable in so many other parts of the country. And I don't know how it is for those students in your school district from the 41 other districts, but the poor students in the ghettos where I grew up don't even have 1 car in the family, let alone gas money for the long daily trip to a good school.
> I'm in favor of a big boost in the minimum age for all kinds retirement benefits (Social Security, Medicare, etc.) as the only possible way to keep taxation for those programs from crippling the opportunities of my children.
I'm pretty sure this is a foregone conclusion. There's simply no way around the math other than increasing the retirement age. If you go back 50 or 100 years, people didn't sit around for 20 or 30 years after retiring doing nothing - they simply died earlier. So if you're going to live until 80 or 90, you'd better work until at least 75.
And without the well-off students as their peers in the public schools, the poorer students won't improve, no matter how much money you throw at the situation.
I'm curious - are you postulating that the only way to cause poorer students to improve their educational outcomes is via peer effects with richer students?
I'd love to see data on this one way or the other.
While most people don't mind if their children associate with middle class black and Hispanic children, they certainly don't want them associating with minority children from the ghetto.
If the peer effects you seem to postulate above go both ways, there is a very good non-racist reason for this: while their children might improve the ghetto children's outcomes, the ghetto children might harm the richer children's outcomes.
> I'm curious - are you postulating that the only way to cause poorer students to improve their educational outcomes is via peer effects with richer students?
What I'm really postulating that the only way to improve the educational outcomes of students that come from families who don't emphasize education is to surround them with students who come from families that do emphasize education.
So my initial statement assumes that poor students come from families that don't emphasize education, while rich students come from families that do. That is a generalization that applies primarily to black and Hispanic students, as there are many poor Asian immigrant families who emphasize education - their children have gone on to be quite successful. But as we all know, the educational problem is with black and Hispanic students. When you eliminate them from the picture, American students do quite well in comparison to European and Asian students[0].
> there is a very good non-racist reason for this: while their children might improve the ghetto children's outcomes, the ghetto children might harm the richer children's outcomes.
Yes, this is certainly possible, and is the most common argument utilized by the rich parents when faced with charges of racism towards poor blacks and Latinos.
>What I'm really postulating that the only way to improve the educational outcomes of students that come from families who don't emphasize education is to surround them with students who come from families that do emphasize education.
I was the product of one of these experiments. The school district I lived in was the result of a redistricting to pull in us white students into a large neighboring nonwhite school.
I can guarantee I didn't improve the educational outcomes for any of my classmates. And all I received from it was random beatings, violent attacks against me, and a subpar education. I did learn something though... Once out, I studied my ass off and work as hard as possible so that neither I nor my children will live through such an experiment again.
> The school district I lived in was the result of a redistricting to pull in us white students into a large neighboring nonwhite school.
Sounds like this was done the wrong way around. What percentage of the students at your school were white?
You got your ass beat because you were in the minority, and you were in their school. The best way to change behavior is to intimidate the students through intense peer pressure. If the minority students are going to a school where they are the minority (and properly integrated into the student body), the results will be very different from what you experienced.
"In perhaps the biggest surprise, Armor's studies found that black elementary students who go to magnet schools (which have the highest percentages of whites) score no better on standardized tests than do blacks who go to all-black nonmagnet schools.(97) In short, Armor found that, contrary to the notion on which the whole desegregation plan was founded--that going to school with middle-class whites would increase blacks' achievement--the Kansas City experiment showed that "integration has no effect."(98)"
First of all, one person's opinion does not make a truth. Second, and more importantly, many of these desegregation programs do not achieve true integration. Sure the black students are in the same school as the white students, but they're not in the same classrooms as the white students who are doing well in their studies. This is exactly what I experienced.
You also have to ask questions like "Are these students receiving extra help to make up for what they aren't getting at home? Do they feel isolated because they're the only poor black student in the class, or do they feel motivated to find a way to fit in with the high-achieving white students?" That is the difference between desegregation and integration.
Yeah, I'm in a similar camp. I'm white, and a product of the LAUSD (Los Angeles) magnet program, which attempted to integrate schools well. Problem is, you're mostly integrating white kids with the minority kids who have parents motivated enough to put them in the magnet program.
My schools had both magnet and non magnet kids in them. What this wound up accomplishing was pretty obvious, there was segregation between the two populations. Walking out at lunch one could see the school was divided by a stark line, a line that was about 70% white where the magnet kids hung out, and mixed elsewhere.
It probably helped some people from minorities in the magnet, but I'm sure the dividing line just reinforced race and class barriers in the minds of those on both sides.
This idea also brings up a moral question - how do you justify forcing children of the rich to suffer in order to counteract the bad parenting habits of the poor?
It's not justifiable, but more than that, it's not even tenable.
Rich "enough" parents (for some value of enough) will invest to send their kids to boarding school in London or Zurich rather than let them be the "beneficiaries" of a social engineering experiment.
The same way you justify progressive taxation, I suppose. Moreover, the government already does many (other) blatantly immoral things in the name of the (expected) results.
But I am less concerned with the morality of it and more concerned with the practicality. If the children of the rich do start suffering, they will simply pull their children out of the public schools, putting you back at square one.
The poor are poor because they have an average IQ in the 80s, barely above mental retardation. Their children are the same way because it is genetic. The school busing amd integration programs are about political subjugation of the high class, not assistance to the lower class.
The standard work is The Bell Curve. They studied many thousands of Americans of every race and subculture. They found that the only significant predictor of earned income was IQ. Race, location, parental income, and so forth did not matter (on average). College attendance in particular had little affect on income, it just determined whether the career was in an intellectual-style field.
The school bussing and integration programs were tried starting in the 1960s. No benefits ever materialized, such as improved test scores, imprisonment rates, cumulative earned income by age 30, or any other standard psychology metric.
Yet the programs were continued. Clearly the purpose in continuing them had nothing to do with "disadvantaged" students, because nothing changed for them. The only explanation remaining is that the real purpose was what was being done to the non-disadvantaged students. Their schools were being filled with yahoos to knock down their potential for achievement.
You could dismiss my claim as raving racism except for one thing: you know that at the same time they also introduced word-shape memorization reading instead of phonetics, New Math, eliminated practice drills, and so forth. They really did want to knock down intellectual achievement. School integration fits very nicely into those plans.
You wrote "The standard work is The Bell Curve" and that tells us that you haven't been reading on the subject since 1994, because The Bell Curve has long since been supplanted as a source on the subject. (It was decried as stupid by anyone who knew genetics from the moment it was published.) More recent sources on the issues of income, race, IQ, and related issues can be found in the publications of Eric Turkheimer, recent president of the Behavior Genetics Association, most of which he kindly shares as free full text on his faculty website.
Note particularly his recent co-authored publication
Nisbett, R. E., Aronson, J., Blair, C., Dickens, W., Flynn, J., Halpern, D. F., & Turkheimer, E. (2012). Group differences in IQ are best understood as environmental in origin. American Psychologist, 67, 503-504.
that directly disagrees with The Bell Curve on several points and yet was published in a leading journal for professional psychologists.
Many, many other researchers have gone beyond the amateur level of research published in the popular book The Bell Curve to grapple with the issues that book brought up and refute it. A good bibliopraphy on the general subject can be found in Wikipedia userspace at
What I'm really postulating that the only way to improve the educational outcomes of students that come from families who don't emphasize education is to surround them with students who come from families that do emphasize education.
The other way is to turn the family that doesn't emphasize education into one that does.
>What I'm really postulating that the only way to improve the educational outcomes of students that come from families who don't emphasize education is to surround them with students who come from families that do emphasize education.
I think this works to some degree, but could depend on ratio. One can't ship underperformers into PaloAlto High or Cupertino and overwhelm the student body --it's not as if the influence is one-way.
>Yes, this is certainly possible, and is the most common argument utilized by the rich parents when faced with charges of racism towards poor blacks and Latinos.
I think looking at homogenous societies (or even states) and looking at achievers vs performers attitudes in those societies. How do parents there deal with these issues? If this argument is used, and those societies are homogenous, then it can't be racist but classist (or even pedagogical).
>There's simply no way around the math other than increasing the retirement age. If you go back 50 or 100 years, people didn't sit around for 20 or 30 years after retiring doing nothing - they simply died earlier. So if you're going to live until 80 or 90, you'd better work until at least 75.
That works out mathematically, but it's not going to work in practice. Just because you don't die before you're 90 doesn't mean you can work any longer than your grandparents did, even assuming somebody still wants to employ you.
>Why not? People are healthier than ever before...
There's no evidence this is true. You realize in the US 30% of the population is obese and almost 10% of us have diabetes, right?
>...and are working jobs that require much less physical endurance.
Right, because sitting at a desk for forty years is the key to good health.
>Again, if you're living longer, your usefulness is decaying at a slower rate.
And again, there's no reason to believe this is true. Modern medicine isn't the panacea you seem to think it is, and the fact that your heart doesn't stop beating doesn't mean you're still in shape to work.
Even aside from physical maladies (which is a big aside), it's normal to be a bit forgetful when you're seventy purely through age-related cognitive decline. It doesn't matter much if you spend your days puttering around the house, but if someone is paying you to do a job the situation is different.
Maybe before the money runs out we'll see enough medical advances to make working to 75 doable for the average person, but without those advances that's just not going to happen.
You realize in the US 30% of the population is obese and almost 10% of us have diabetes, right?
A couple of points worth making:
1) 10% of people have diabetes because the definition of "diabetes" has been tinkered with extensively over the last couple of generations. Blood sugar levels that wouldn't have resulted in a diagnosis in the 1950s are now grounds for panic in your doctor's office. I'm not qualified to judge this as a good thing or a bad thing, overall, but it's obvious that it renders basic statistical comparisons impossible. We've seen similar abuse of statistics with other conditions such as autism.
2) If people are heavier now than we were in the past, it could be for the same reason that we're taller than our ancestors: better nutrition (as opposed to the usual claim of worse nutrition.)
> You realize in the US 30% of the population is obese and almost 10% of us have diabetes, right?
Those people are probably going to die at 60-70 y/o anyway.
And besides, that's self-inflicted. Once people realize that it's preventing them from reaching their full lifespan, they'll change if they want to. And if they don't, well, I'm not gonna complain if I get better retirement benefits as a result.
> Right, because sitting at a desk for forty years is the key to good health.
Once again, this is largely self-inflicted. You can stay relatively healthy while working a desk job. Stop buying junk food and get a gym membership. Try getting up and walking a bit during your workday - take a stroll outside during lunch. You can certainly be healthier than people were 50 years ago working at a car factory.
> And again, there's no reason to believe this is true.
There's no reason to believe it isn't true. Society has just accepted that people have to stop working at 65. Why not try increasing the retirement age gradually and see what happens? People don't suddenly lose the ability to work when they turn 65.
>Those people are probably going to die at 60-70 y/o anyway.
Maybe, though doctors are getting pretty good at treating obesity-related problems. In any event they're going retire in their fifties (or earlier), so from a social services standpoint we're not coming out ahead.
> You can stay relatively healthy while working a desk job.
The key word being relatively. Taking a walk at lunch and spending an hour at the gym isn't going to make you as healthy as someone who does physical activity all day.
>There's no reason to believe it isn't true. Society has just accepted that people have to stop working at 65.
Actually, yes, there is a reason to believe it isn't true. We have made effectively zero progress in arresting age-related cognitive decline. Until we do you can raise the retirement age to whatever you want - even people who are still pretty sharp aren't going to be able to find jobs because employers won't want to chance hiring a madogiwa.
I would suspect that there is quite a high variability in capability and survival prospects at age 70. The ones least able to be likely to afford to retire might be those that need to the most.
I don't have a particular solution to offer but looking at averages oversimplifies issues like this.
This is actually a problem in modern China as well. Called the four-two-one problem[0], China's one-child policy has resulted in many adults having to care for 2 parents and 4 grandparents, since they have no siblings.
This may not be as big of a problem in America, since it has a slightly higher fertility rate than China (2.05 children per female, versus 1.79 in China). But given stagnating wages and skyrocketing healthcare costs, it could very well turn out to be worse on the whole.
I'm pretty sure this is a foregone conclusion. There's simply no way around the math other than increasing the retirement age. If you go back 50 or 100 years, people didn't sit around for 20 or 30 years after retiring doing nothing - they simply died earlier. So if you're going to live until 80 or 90, you'd better work until at least 75.
If you go back 50 or 100 years, productivity-per-hour was a tiny fraction of what it is today. Why do we decree by fiat that everyone has a moral obligation which we will enforce via the economic system to spend at least half their waking hours working for most of their lifespan?
If you're going to finance your own retirement, feel free to stop working whenever you have enough money saved up. However, if you're going to demand that future generations of workers finance your retirement through taxation (which is how the U.S. Social Security system works), then what you're saying is that future generations have a "moral obligation" to spend ever-increasing fractions of their salaries to fund prior generations as life expectancy increases. Keeping the retirement age the same while life expectancy goes up results in an increasing transfer of wealth from younger generations to older generations, with older people having an increased standard of living at the expense of younger ones.
By the way, higher productivity per hour doesn't necessarily mean that people can afford to pay higher taxes to fund your longer retirement. In many cases, it means that employees are expected to work more hours (e.g., work 50 hours a week and answer e-mails from home) for the same salary. Also, productivity per hour is only likely to have increased in jobs that are based on technology. It's not likely that the productivity per hour of a mail carrier or a teacher or a waiter is much higher than it was decades ago.
If you go back a 100 years, people shat in outhouses and died of TB. Only the rich retired.
Why do we decree by fiat that everyone has a moral obligation which we will enforce via the economic system to spend at least half their waking hours working for most of their lifespan?
>The Confucian influence on East Asian culture has resulted in a much higher degree of filial piety (孝) than in the West, which makes it possible for people to live in old age without social welfare.
Kind of an aside, but filial piety tends to break down when there are no children around. With the birthrate in Japan and China this system will break down. It has begun breaking down in Japan (and Taiwan to some extant). For example, all age groups but the one above seniority show declining crime statistics; the older age group shows an increase in crime, mostly petty crime such as food theft, bikes, etc. There is a school of thought which blames elder alienation from society (i.e. no descendants who care for them --or in some cases live just too far)[1]
>the wealthy parents will simply pull their children out of public schools and send them to private schools instead
This is also the case in Japan. On the other hand, in Taiwan, public schools are the better schools. I'm at a loss for the divergence, but would be interested in some insight into that.
>While most people don't mind if their children associate with middle class black and Hispanic children, they certainly don't want them associating with minority children from the ghetto.
Agree with the general statement. That's also evident in Japan and Taiwan, from what I know. It's all socio-economic than racial, in TW and JP, as there are negligible a mounts of "other" in both countries. The Zainichi problems not withstanding.
> There's simply no way around the math other than increasing the retirement age
Sure there is- ease immigration quotas for young people. You could solve the problem in five years. It's politically nightmarish, but the math is great.
Argh. A link to the AEI as a point of authority. And some unsubstantiated opinion as fact. Some stuff about homeschooling. Wanting to be like "east Asia" (there are a lot of countries in Asia). Let me know how 3-4 generations under one roof works out for you.
Official inflation statistics have also badly overstated increases in "cost of living" throughout my adult life, failing to take into account changed consumption patterns and changing (improving) quality of many goods and services, thus making people think they are poorer than they actually are. By observation of actual consumption patterns, young people today are better off in general than young people a generation ago, which is the consistent expectation of American culture.
It is an unending source of frustration to myself that smart people lump "consumption", "real income" or "GDP" into one amalgamated mass. Then we get in this endless arguments over whether "income" is going up or down, when in reality purchasing power consists of the ability to purchase all sorts of goods, some of which might be getting cheaper relative to income and some more expensive.
It is undeniable that the median purchasing power of luxury and entertainment goods - movies, books, music, computing power, video games, sushi, gourmet coffee, cars with AC, etc, has massively increased in the past forty years. (However, from a hedonics standpoint it's not clear that there has been much improvement - the bowling leagues, poker nights, and bridge clubs of the 1960's seem plenty enough to maximize happiness, video games are not necessarily any better from that standpoint).
It is also true that the median purchasing power of the necessities of life - transportation and fuel to get to work, a home in a neighborhood with low crime and friendly schools, health insurance that covers the basics care, nutritious food - has gone down. Try building a basket of goods consisting of the cheapest automobile that can you get an average person to work every day, the gasoline to power that car, natural gas to heat the home, the median home amortized with a mortgage at the contemporary interest rate, the cheapest healthcare plan on the market, and balanced food diet of grains, meat, and vegetables. Then compare the price of that basket compared to the median wage of a full time, 30 something, male worker in 1970 to that in 2010. I have done that math, and found that the purchasing power of the median worker has decreased substanitially ( by about 23%). Most of this decline in purchasing power came from the rapid rise in the cost of housing, oil, and healthcare.
The normal reubttal is that the quality of the cheapest car in 2010 has nicer amenities than the cheapest car in 1970. The median home is much larger than the median home in 1970. This is true. But there is no existing option in 2010 to buy the 1970 car or 1970 home at a cheaper price. And from a hedonics standpoint, trading financial stress for a bigger home is not a good trade.
Because the decrease in median purchasing power is concentrated in the basic cost of living, many young adults have made a decision to defer or forgoe raising families. This gives a surplus income which can then be spent on all manners of luxuries unknown to the typical worker in 1970. So from outside appearance, it can appear that the standard of living has improved greatly.
So from my opinion it is great that we have the internt and kindles and such.
But real life is not GDP statistics - the growth in one area does not necessarily negate the decline in other.
The existence of kindles does not negate the problem of declining purchasing power of the base necessities of living. This decline is still a huge problem that must be addressed.
I've heard many gen Y'ers talking about how baby boomers screwed it up for them but I had never heard baby boomers saying the same about their parent's generation. It doesn't make that much sense to me since boomers are retiring better off than their parents while gen Y is the first generation that will be worst off.
You know, there is a generation that's between boomers and Y, right? Are you saying that X will be better off than the boomers, before it tailspins to the Ys? Shouldn't the blame lie on the X's then?
Except that four out of five jobs lost during the recession were employees with less than a college diploma [0]. Rather than dropping out, I strongly recommend transferring to a lower-cost school or switching majors.
The article talks about law school students. A huge number of students entered law school right at the start of the recession. There just wasn't market demand for that many new lawyers when they graduated in 2011. [1]
Law (which OP focuses on) is a bizarre profession, because it used to be driven by an arms race dynamic. Most of what lawyers do, at the top of the profession, isn't intellectually difficult. The game is about being able to generate work for the other team faster than they can adapt to it. When litigation happens between large corporations, it's about playing the process, not arguing or interpreting the law itself. It devolves into brute-force process playing. It's not what you see in the movies, since cases so rarely go to trial.
So, even though the work itself isn't challenging, large law firms have traditionally sought very qualified people, not because of the work, but because there's a complex, ever-evolving game in this war of attrition. The winning team is the one that generates work faster than the other can keep up, and you need to be smart, driven, and brutal enough to work the angles. This also explains the 70-hour weeks that became the norm in biglaw. The game is about beating the other side to death with excess work, so the best hires are people who can do huge amounts of boring, procedural work and not get completely exhausted.
What changed is that there's now less work to go around, due to cost-cutting and "demand destruction" among these firms' Wall Street clientele. There's no longer 70 hours of work per associate. Now the firms are overstaffed relative to the actual workload. Well, the partners want to keep their lifestyles, so associates get axed. What's most disgusting about it is the recent trend of "stealthing", which is disguising a layoff as a performance-based firing.
There's also a bimodal income distribution. There's "biglaw" which has a hard salary floor of $165k per year, and "everything else" where the average might be $50k. Law is one profession where it's not at all uncommon to be making less at 35 (after not making partner, and being lucky if you crack 120k) than at 26.
White-shoe law is melting down. So is investment banking, on which it relies, but banking's degradation is more graceful. Banking is just hiring fewer people and reducing bonuses, while law has this problem of large numbers of marginally qualified people who've spent large amounts of money on JD degrees.
What have we learned from the Law Crash? (Yes, there was a Law Bubble, and boy has it crashed.) I think the lesson is about how of an influence respectability has over peoples' work lives. The attraction of the legal profession wasn't just the money, but also the prestige. You're not some plumber or computer programmer-- occupations whose average members now seem to be doing better than average attorneys-- you're a lawyer. Even now, with law imploded, I think that impulse is strong. What we're out of touch with is that most upper-middle-class Americans would see it as weird and risky for a young person to go off to Silicon Valley, and upper-class would only approve it if you were a VC, not an entrepreneur.
People are desperate for the credibility and respectability of being a "professional", but the professions are under attack. Doctors are being pillaged by health-insurance barbarians, the law bubble is collapsing, and academia's a non-concern by this point. Which means that the best (and, for many, only) ways for most people to make a decent living are in formerly "unrefined" lines of work. For a lot of people, it's a shock.
Millennials, for their part, often feel cheated out of this. They should. They were put through a 16+ year game to lead them to believe they'd have a certain kind of elite life, and then most were dumped into a featureless landfill of confusion and mediocrity. They've been pumped and dumped.
Most academic jobs available these days are low-paid, part-time, non-tenure-track adjunct faculty positions, which don't bring a lot of prestige. The academia bubble burst quite a while ago, leaving lots of people with PhDs feeling the same as the law school grads feel today.
The academic career and the "life of the mind" are done-for in this society. The US has already decided that it doesn't care about these things, and there really isn't an option to turn back. There will be demand for teaching, for sure, but basic research is gone and the academic career no longer has the resources to create enough decent positions that would entice the top people to stay.
What's happening now is that the best people are going into industry, and spending time in academia after they are rich enough to retire. I wouldn't be surprised if that's the future of academia: a place where successful older people teach the young, but not a lifelong career.
We're employing more academics than ever. The problem is that we're producing even more grad students than we have academic positions, because academia's self-replication behaviors have metastasized.
With the help of technology, the Pax Americana and a stable world order, improved healthcare, reduced social barriers and relative economic stability, the generation born in the 80's to 90's is probably the most privileged. Generation. Ever. In history. For 15,000 years of human civilization. I mean, it's now considered normal (and even a human right by some) to take 2-3 weeks vacation every year. So when I read that "I got a $150,000 education and now I have to work for only $40,000," or (as I've heard before), "I have a college education, I shouldn't be working at Pier One," I just want to vomit. My immigrant grandparents would have killed for the chance to work at Pier One. The world doesn't owe you a living because you graduated from a top tier school with a degree in Environmental Studies, or even took out a loan to go to law school.
Look, it's not like Generation Y--or, specifically, individuals in Generation Y like in every generation--don't have any problems, but you have to have a sense of perspective. Success for any generation has always been about hard (productive) work, to better one's self and one's family. The American Dream has always been about being born into rags and working into to riches, not from being born into riches and being owed something by the virtue of your privilege, which is what this "death of the American Dream" nonsense is about. By this article's own admission, we've been so warped by our parents' relative privilege that it's hard to see the big picture. Look at the big picture.