Compared to the efforts to restore prosperity that followed the 1929 stock market collapse, the measures this country took to repair the damage done to these younger Americans were feeble, at best. Unlike the Europeans, who instituted widespread youth employment programs to try to curb anticipated social unrest resulting from millions of unemployed young people, our government’s response to the crisis that crashed down on millennials was muted, especially after the economy finally recovered for everyone else. Democratic measures such as the American Recovery and Reinvestment Act, signed by President Obama in 2009, were geared toward restoring the entire economy from the malfeasance and neglect of the Bush era. While such efforts successfully jump-started economic recovery, these measures weren’t specifically dedicated toward any particular generation affected by the crisis.
There was never any serious planning in this country to address that generations’ future economic security as they passed out of their working years, even though their lifetime earnings would, in most cases, suffer a permanent setback. Lisa Kahn, a Yale economist quoted in Thompson’s article, explains how high national unemployment translates into lost future earnings for those unfortunate enough to be caught in the middle of it: “For every one-percentage-point increase in the unemployment rate, new graduates' starting income falls by 7 percent.” During the Great Recession, millennials saw their unemployment rates soar to a record 19.5% in 2010, with people of color faring the worst by far. The unemployment rate for young African Americans (age 16-19, for example) was over 40% in 2010-2011, while black workers in every older age group saw roughly double the unemployment of their white peers. Latinx millennials were also disproportionately unemployed, although their rates were not as high as African Americans.
Some of those caught in the peak of the crisis sought refuge by staying in school, but for many, that proved only a temporary respite. Unemployment rates for millennials did not magically fall after the Great Recession was over, but instead a new category—the “underemployed”—emerged. As late as 2014, the unemployment rates of millennials were still triple the national average, “leaving many of them unable to rent apartments and purchase or furnish homes.” By 2016, 51% of millennials could count themselves among the ranks of the “underemployed.” Even those who were employed as of 2013 were making 43% less than their Generation X counterparts had made nearly 20 years earlier. Add to that tens or hundreds of thousands of dollars in student loan debt incurred since the recession, and it’s hardly surprising that, as of May 2019, millennials “have less wealth, less property, lower marriage rates and fewer children than any other generation of young adults born since the Great Depression.”
Sadly, this outcome was wholly predictable; beyond some Democratic legislation to rein in the worst and most reckless bank behavior that led to the crisis (legislation that has already been denuded by the Trump administration), virtually nothing has been done to account for the damage done to the futures of millions unlucky enough to have spent their initial earning years barely treading water in a shipwrecked economy. The Affordable Care Act (“Obamacare”), passed in 2010 by a Democratic Congress, has been one bright spot for these young people, with millennials outpacing all other demographics in obtaining healthcare coverage through the ACA. Other than that, the economic fate of an entire generation was more or less left to the tender mercies of the free market.
Now, more than 10 years later, the country is supposedly enjoying “full employment.” Many of those fortunate enough to have money invested in the stock market are currently enjoying the highest returns (on paper) that they have ever experienced. The amount of home equity for homeowners is soaring as well. But as the adage goes, it takes money to make money. Someone who hasn’t been able to invest significantly in the stock market, through a 401(k) or otherwise, is not benefitting much, if at all, from these returns. Someone unable to purchase a home because of their student loan debt is not seeing any increase in their home equity. To the extent that millennials are reaping these dividends at all, they’re seeing them years later than they “normally” should have expected to.
The problem goes beyond this single millennial generation. At the peak of the Great Recession (2007-2009), older millennials (along with the micro-generation born on the cusp of the millennial generation, dubbed the “Xennials”) were entering their late twenties.The oldest of these are now entering their forties, and in spite of being “the most educated generation in history”—or perhaps because of that—millions of them continue to be burdened by crushing student loan debt. In this burden, millennials join both Xennials and the youngest members of Generation X, who carry even more loan debt, much of it also incurred during the crisis and its immediate aftermath.
The average student loan debt, by age, in the U.S., is as follows, according to Credit.com:
24 and younger: $120.1 billion
25 to 34: $494.2 billion
35–49: $548.4 billion
50–61: $224.1 billion
62 and older: $67.8 billion
But unlike the millennials, the eldest members of Generation X did not have their future earnings skewed at the outset by the Great Recession, nor were Generation Xers consigned to years of “underemployment” at the very start of their careers.
Younger millennials also continue to incur student loan debt at staggering levels. Today, a whopping 45% of Americans aged 25-34 carry student loan debt (when baby boomers were that age, the figure was 16%). Interest rates for student loans, set by Congress, have been subject to the same dysfunction that permeates the rest of our politics, with rates on Stafford loans, for example, doubling in 2005, and doubling again in 2013 before Congress ultimately agreed on legislation lowering them, at least temporarily. The impact of heavy student debt has forced many young Americans to postpone purchasing a home. For many, it has postponed having children. One in three student loan borrowers report that the monthly amount owed on their loans exceeds their monthly rent or mortgage bill. Meanwhile, the cost of housing continued to rise dramatically, particularly in the urban and suburban areas where millennials typically try to find jobs, making the prospect of building any “home equity” a virtual non-starter for these younger workers, most of whom continue to rent.
The financial press acknowledges the rules have changed for this generation. According to the Wall Street Journal, “Americans entering the workforce in the decade since the financial crisis face a starkly different landscape than their parents did at the same age. They often have far higher student loan debt. Housing eats up a bigger chunk of each paycheck. And young households have lower incomes and fewer assets than previous generations did at the same age.” Beyond these general statements, the actual figures are breathtaking: College tuition has risen 1,375% since 1978; student loan debt is four times what it was in 2005; rents are at an all-time high; and a typical home now costs four times the national median income (from 1980-1999 it was three times median income). Two-thirds of millennial renters would need to work 20 years just to save up a 20% down payment on a home.
For those in later stages of life, the obvious question arises: How can this generation, dumped into the employment ranks during the worst economic downturn since the 1930s, expect to fare when it comes time for retirement?
No one in the federal government seems to have the answer, and in our current ossified political climate it doesn’t seem likely one will be forthcoming soon. The Republicans have controlled at least one branch of Congress or the White House for the past 10 years. As a result, any legislative initiative by our federal government to address what is increasingly looking like a looming retirement disaster—not only for millennials but also for the generation behind them (Generation Z)—has been dead on arrival. No federal living wage, no adjustment to Social Security, and no comprehensive forgiveness of loan debt (all good ideas that Republicans have found ways to kill, stifle, or otherwise repudiate) have materialized. Meanwhile, just a few short years from now, millions of Americans are set to run headlong over a fiscal cliff.
But fear not! There is no shortage of advice from the private sector, the MBA-industrial complex that got millennials (and everyone else) into this mess in the first place. It’s impossible now to scan any business-related website without seeing some reference to the fact that people aren’t on track to save enough for retirement. Unfortunately, that happens to be the truth.The total retirement “nest egg” for the median millennial is $23,000. That’s not enough to last most people six months, let alone an anticipated 20-plus year retirement. The financial industry never, ever tires of pointing this out.
Their solution? Work, Work, Work. In fact, work until you can’t possibly work any longer. The nearly universal consensus among those who forecast Americans’ retirement prospects is that millennials must cheerfully, without complaint, embrace a new reality—they must prepare for employment in perpetuity, or something close to that. This verdict is now repeated and reinforced with such regularity by the business/financial press that it has become the prevailing “common wisdom.” Often accompanied by helpful financial planning suggestions spun from the rarefied air that apparently sustains these publications, these solemn warnings, intoned constantly by the financial services sector, are telling both for what they advocate as “solutions” to this pending disaster … and for what they don’t.
For example, John Stoll of the Wall Street Journal authored a recent piece celebrating his own emancipation from the "retirement mindset." Stoll urges, among other things, that retirement itself should no longer be regarded as so desirable since people who retire tend to miss the “social connections” they once enjoyed through work. “A job, historically seen as simply a way to make money, is increasingly the source of the types of friendship and stimulation that are hard to find in bingo halls, on beaches, or riding a golf cart,” according to Stoll.
Forgetting for a moment the anachronistic stereotype of old people dawdling about on golf carts or playing bingo, speaking just for myself, if I really wanted to socialize with someone from my old workplace, I would find a way to do it.
Stoll also quotes several learned academics, such as Olivia Mitchell, a professor at the Wharton School of Business, who coldly declares that young Americans need to prepare themselves for work well into their mid-70s: "When people leave school it's not going to be for 25- or 30-year careers, it's going to be for a 50-year career," she says.
Neither Stoll nor Mitchell are alone in this view. Everywhere, it seems, millennials are reassured that it’s not only okay, but downright necessary for them to work until they more or less drop dead. Outside the financial sector, there is plenty of academic data suggesting the same thing.
The financial sector, of course, has plenty of useful suggestions to help millennials navigate this brave new world. In an article titled “Your Parents’ Financial Advice is (Kind Of ) Wrong,” Julia Carpenter of the Wall Street Journal recommends this generation cut back on its expectations. Instead of pursuing a three-year law degree, for example, she suggests obtaining a less-costly “Masters of Legal Studies,” apparently unaware that most people hoping to go to law school actually want to practice law. Other tidbits of wisdom from the same article include placing whatever money you can save in a “high interest savings account.” (Good luck finding one of those!) Additional advice, like investing in the stock market through 401(k)s or IRAs, assumes that someone has extra funds available and omits the possibility that anyone “jumping in” to the stock market at present may well be “jumping in” at its peak.
All of these paeans to the joys of working in perpetuity make for fascinating reading—until one actually contemplates what a future of working to and past age 70 actually means. The reality, as opposed to the bold visions of these financial writers, is that the vast majority of the American population is not equipped emotionally, physically, or psychologically to continue working up to and past the age of 70. The reality is that around age 60-65, and certainly by age 70, human beings, particularly those who have engaged in physically demanding occupations, begin to decline. They get physically weaker. They get tired sooner. Their minds begin to wander. And many of those lucky (or genetically blessed) enough to be healthy at that age historically had the luxury of others to do the "heavy lifting" for them. Someone accustomed to a white-collar career may find, for example, that standing all day as a Walmart greeter or Safeway bagger brings with it a whole new panoply of ailments. While we can all point to astonishingly youthful septuagenarians, there are far more people that age who, for reasons either genetic or environmental, are infirm, disabled or otherwise simply incapable of working. There also is the issue of age discrimination in an economy increasingly geared toward extracting value only from younger, more active and healthy workers. And, of course, automation looms: some suggest it could eliminate one-third of U.S. workers’ jobs as early as 2030.
There are some worthy incremental solutions under consideration for fixing this country’s retirement crisis, but the current political environment is incapable of handling it—because ultimately it involves a complete overhaul of the social safety net. Absent a Guaranteed Minimum Income, Social Security, which was never intended to be a primary source of income for retirees, will have to be expanded to provide a decent standard of living for tens of millions of Americans entering their senior years without adequate funds to sustain themselves. Medicare will have to be more generously funded to include more long-term care for an influx of so many new elderly people. Prescription drug prices will have to be reduced. Fully subsidized child care will have to become a right, not a “privilege.” After all, it will fall upon the children of these millennials to care for their parents when the government cannot, and they aren’t going to be too happy about it—particularly as they’re trying to raise children of their own. Affordable housing will have to be guaranteed. In essence, American society will have to be reinvented in less than four decades, in a way that ensures these folks are cared for.
And if you think any of that sounds crazy, nutty, or like some pie-in-the-sky “socialism,” you might just want to wait about 15 years or so. That’s when the Xennials and eldest millennials will reach age 55 and start thinking about what kind of world is waiting to embrace them in what their parents used to refer to as their “golden years.” As of 2019, millennials already passed baby boomers as the largest percentage of the population, and they are only beginning to sense how meaningful those numbers are. Less than two decades from now, millennials will hold most of the political power in this country, at every level. Millennials will be the first to realize how badly they’ve been shafted by their country, and they will change things profoundly—whether corporate America or the Republican Party like it or not—because they’ll have to.
Just like every generation before them, millennials are not going to “work until they drop” ... as long as there’s a chance in hell they can do something about it.