The Screwed Generation

[GoodEnoughForMe]

A longform and prettily dressed up analysis by HuffPo's fancy-named team dove into the details of how decades of policy and decision making by those who were in power at the time, has, quite simply, totally f'd millennials. And particularly millennials of color. Some tidbits, although the article is chock-ful and it's well-worth a read.

There are millions of Scotts in the modern economy. “A lot of workers were just 18 at the wrong time,” says William Spriggs, an economics professor at Howard University and an assistant secretary for policy at the Department of Labor in the Obama administration. “Employers didn’t say, ‘Oops, we missed a generation. In 2008 we weren’t hiring graduates, let’s hire all the people we passed over.’ No, they hired the class of 2012.”

You can even see this in the statistics, a divot from 2008 to 2012 where millions of jobs and billions in earnings should be. In 2007, more than 50 percent of college graduates had a job offer lined up. For the class of 2009, fewer than 20 percent of them did. According to a 2010 study, every 1 percent uptick in the unemployment rate the year you graduate college means a 6 to 8 percent drop in your starting salary—a disadvantage that can linger for decades. The same study found that workers who graduated during the 1981 recession were still making less than their counterparts who graduated 10 years later. “Every recession,” Spriggs says, “creates these cohorts that never recover.”

But the real victims of this credential inflation are the two-thirds of millennials who didn’t go to college. Since 2010, the economy has added 11.6 million jobs—and 11.5 million of them have gone to workers with at least some college education. In 2016, young workers with a high school diploma had roughly triple the unemployment rate and three and a half times the poverty rate of college grads.

The decline of the job has its primary origins in the 1970s, with a million little changes the boomers barely noticed. The Federal Reserve cracked down on inflation. Companies started paying executives in stock options. Pension funds invested in riskier assets. The cumulative result was money pouring into the stock market like jet fuel. Between 1960 and 2013, the average time that investors held stocks before flipping them went from eight years to around four months. Over roughly the same period, the financial sector became a sarlacc pit encompassing around a quarter of all corporate profits and completely warping companies’ incentives.

The pressure to deliver immediate returns became relentless. When stocks were long-term investments, shareholders let CEOs spend money on things like worker benefits because they contributed to the company’s long-term health. Once investors lost the ability to look beyond the next earnings report, however, any move that didn’t boost short-term profits was tantamount to treason.

The new paradigm took over corporate America. Private equity firms and commercial banks took corporations off the market, laid off or outsourced workers, then sold the businesses back to investors. In the 1980s alone, a quarter of the companies in the Fortune 500 were restructured.

Today, they’re almost all indirect hires, employees of random, anonymous contracting companies: Laundry Inc., Rent-A-Guard Inc., Watery Margarita Inc. In 2015, the Government Accountability Office estimated that 40 percent of American workers were employed under some sort of “contingent” arrangement like this—from barbers to midwives to nuclear waste inspectors to symphony cellists. Since the downturn, the industry that has added the most jobs is not tech or retail or nursing. It is “temporary help services”—all the small, no-brand contractors who recruit workers and rent them out to bigger companies.

The effect of all this “domestic outsourcing”—and, let’s be honest, its actual purpose—is that workers get a lot less out of their jobs than they used to. One of Batt’s papers found that employees lose up to 40 percent of their salary when they’re “re-classified” as contractors. In 2013, the city of Memphis reportedly cut wages from $15 an hour to $10 after it fired its school bus drivers and forced them to reapply through a staffing agency. Some Walmart “lumpers,” the warehouse workers who carry boxes from trucks to shelves, have to show up every morning but only get paid if there’s enough work for them that day.

Between 1970 and 2002, the probability that a working-age American would unexpectedly lose at least half her family income more than doubled. And the danger is particularly severe for young people. In the 1970s, when the boomers were our age, young workers had a 24 percent chance of falling below the poverty line. By the 1990s, that had risen to 37 percent. And the numbers only seem to be getting worse. From 1979 to 2014, the poverty rate among young workers with only a high school diploma more than tripled, to 22 percent.

Since 1996, the percentage of poor families receiving cash assistance from the government has fallen from 68 percent to 23 percent. No state provides cash benefits that add up to the poverty line.

Forty-one percent of working millennials aren’t even eligible for retirement plans through their companies.

But this fail-safe, like all the others, isn’t equally available to everyone. The wealth gap between white and non-white families is massive. Since basically forever, almost every avenue of wealth creation—higher education, homeownership, access to credit—has been denied to minorities through discrimination both obvious and invisible. And the disparity has only grown wider since the recession. From 2007 to 2010, black families’ retirement accounts shrank by 35 percent, whereas white families, who are more likely to have other sources of money, saw their accounts grow by 9 percent.

Back in 1970, according to a Harvard study, an unskilled worker who moved from a low-income state to a high-income state kept 79 percent of his increased wages after he paid for housing. A worker who made the same move in 2010 kept just 36 percent

The article goes on to suggest generally progressive and wonkish policies (although they're still probably more left than where the Dem party is now).

I'm not gonna RD this because I love a good wisecrack. Feel free to chime in with thoughts, policy to enact to try to prevent what is going to be a massive, massive drag on the economy for a long time if the financial health of the largest living generation isn't figured out, or how Soylent Green sounds pretty damn delicious. If you are just going to complain about the youth or entitlements or whatever and be old just leave an address for where you'd like to be picked up to be converted into meat product.

 

[Arwon]

There's similar generational issues with a different complexion in Australia.

We haven't really had the deep employment issues the US does, but if anything our housing market is more insanely overheated than all but the worst parts of California (Sydney is more unaffordable than San Jose, Los Angeles and San Francisco and everywhere else looked at except Hong Kong), largely due to tax policies that strongly encourage speculation. That wouldn't be so bad, except that tenant rights are very limited in Australia due to the historical assumption that renting is temporary til you buy a home.

Additionally, decades of anti union policies have led to completely stagnated wages, to the extent that business groups are fretting about it.

Plus, and this is a sleeper issue in this emerging topic so far dominated by concerns about livable secure shelter, the effectively climate denialist policies of our governments are their own form of generational warfare.

 

[metalhead]

On the other hand, do we really want guys named Scott to succeed?

 

[JollyRoger]

I am certainly out to screw my fair share of millennials.

 

[Lexicus]

I'm not gonna RD this because I love a good wisecrack. Feel free to chime in with thoughts, policy to enact to try to prevent what is going to be a massive, massive drag on the economy for a long time if the financial health of the largest living generation isn't figured out, or how Soylent Green sounds pretty damn delicious. If you are just going to complain about the youth or entitlements or whatever and be old just leave an address for where you'd like to be picked up to be converted into meat product.

These issues need to be solved by class conflict, not inter-generational conflict. What the article describes is capitalists reasserting the control they enjoyed before the Second World War temporarily forced them into compromises with the rest of society. The Boomers are only richer than us because they had the good fortune to be born during the period of this compromise. We can make things better than they ever were in the 60s and, honestly, it wouldn't even be that difficult from a technical perspective. The major hurdles are political and can be summarized by the word "oligarchy."

 

[Zkribbler]

... can be summarized by the word "oligarchy."

..."plutocracy/"

 

[hobbsyoyo]

Basically every single large company stands up today and says that they can't find the 'right' workers and need to import cheap foreign labor on temporary visas. The government has so far been all-obliging in this regard. They regularly increase quotas for migrants and promote the H1-B visa program which turns the immigrants into complete dependents of their corporate sponsors.

The big lie is that the talent is out there, just not at the price point that companies want to pay. And as long as the floor is set low ($7.25/hr federally, not much better in most states), they will get away with this. Practically the entire work force of Wal Mart qualifies for food stamps and government assistance. Think of all the shops that used to support decent wages that were driven out of business thanks in part to predatory labor practices and replaced by jobs that pay the equivalent of fast food workers. (And the fast food workers used to make livable wages too!)

The only upside I can see to all of this is that if things continue on this awful trend and we get a seriously progressive government as a result, the following policy changes that might be enacted will cushion us for the enormous shock that AI will force on the system. We are going to need a basic income because pretty soon no one but the corporate owners will be able to benefit from our economic system. We're already on that track but AI is going to compound the problem many times over.

We best figure out how to manage the coming state change before it's too late.

 

[hobbsyoyo]

Separate post because I type a lot and the topic is different enough to justify it-

We need to seriously, as a society, confront the looming demographic problem that is just now picking up steam. It's not just that young people are being screwed - they are being screwed to the point where they cannot afford to start families. Thanks to birth control, they can make that choice. Unfortunately, they are making that choice not entirely of their own will but of necessity. You cannot feed a family when government assistance is next to non-existant and every job requires a $50k degree and pays $10/hr and the housing market is being manipulated to benefit older generations and the wealthy at the expense of everyone else.

My parents continually pester me about grandchildren and I have to remind them that in addition to my sky-high rent, I'm paying for the equivalent of a second house in student loans. There is no money to maintain a decent lifestyle and bring up kids. An entire generation is facing this choice and the loser will be the entire country.

 

[GoodEnoughForMe]

These issues need to be solved by class conflict, not inter-generational conflict. What the article describes is capitalists reasserting the control they enjoyed before the Second World War temporarily forced them into compromises with the rest of society. The Boomers are only richer than us because they had the good fortune to be born during the period of this compromise. We can make things better than they ever were in the 60s and, honestly, it wouldn't even be that difficult from a technical perspective. The major hurdles are political and can be summarized by the word "oligarchy."

..."plutocracy/"

I mean I kind of jokingly complained about olds here because it's fun but I also, on another site, said we could just take Soylent Green but make it wealth based instead, and I'm cool with that.

 

[Lexicus]

I mean I kind of jokingly complained about olds here because it's fun but I also, on another site, said we could just take Soylent Green but make it wealth based instead, and I'm cool with that.

I dunno, I'm pretty squeamish about eating the rich, I might get some kind of disease

 

[Broken_Erika]

I dunno, I'm pretty squeamish about eating the rich, I might get some kind of disease

You'll probably catch capitalism, unfortunately removing capitalism from rich peoples meat requires such high temperatures that the meat is essentially incinerated.

 

[Birdjaguar]

For sure the 80s made a sea change in how businesses operated and they found new ways to screw employees to the benefit of the owners and shareholders. Talk radio of the 90s began the terrible partisanship we see today. A baby boomer social split created that opportunity as the left leaning hippies aged into liberalism and the anti hippy religious conservatives drifted further right. As they aged, their differences hardened. Obama solidified fear that the white America of the 1950s was going away. That brought us to the Tea party and Trump. And the hollow campaign of Hillary Clinton.

Millennials, you have been betrayed by corporate greed and our political schism. Don't look outside yourself for a solution. As Hobbs said, bigger changes are coming. Jobs and skills needed to support yourself are undergoing a significant change. You need to prepare. Pensions disappeared during my working life and we have had to rely on IRAs and 401K accounts as part of our planning. Business will be changing that formula again. You need to start young with your own retirement accounts. AI will steal all the the jobs it can. You need to be nimble, skilled in what computers cannot do and looking ahead. Don't expect to live the life of your parents. Your future will be very different. My kids were born in the 80s and are both millennials.

 

[hobbsyoyo]

PBS again played the clip of businessmen keeping their hands down when asked to raise their hand if the tax cuts will lead to them raising wages.

 

[hobbsyoyo]

For sure the 80s made a sea change in how businesses operated and they found new ways to screw employees to the benefit of the owners and shareholders. Talk radio of the 90s began the terrible partisanship we see today. A baby boomer social split created that opportunity as the left leaning hippies aged into liberalism and the anti hippy religious conservatives drifted further right. As they aged, their differences hardened. Obama solidified fear that the white America of the 1950s was going away. That brought us to the Tea party and Trump. And the hollow campaign of Hillary Clinton.

Millennials, you have been betrayed by corporate greed and our political schism. Don't look outside yourself for a solution. As Hobbs said, bigger changes are coming. Jobs and skills needed to support yourself are undergoing a significant change. You need to prepare. Pensions disappeared during my working life and we have had to rely on IRAs and 401K accounts as part of our planning. Business will be changing that formula again. You need to start young with your own retirement accounts. AI will steal all the the jobs it can. You need to be nimble, skilled in what computers cannot do and looking ahead. Don't expect to live the life of your parents. Your future will be very different. My kids were born in the 80s and are both millennials.

I said this in another thread but I'm an engineer and do not have a 401K. My company has a 401K but no matching whatsoever. It's no different than a 401K I could get on the private market. This is the new normal even though it was unheard of even a decade ago.

And thanks to sky high rent and student loans, I cannot yet afford to open a 401K and begin serious retirement saving. That isn't to say that I don't save; I just can't save for retirement and an emergency fund at the same time. And I'm still paying down the $15k in credit card debt I had to take out just to survive college. That's almost payed off though so it'll be nice to have an extra $700/mo to put into savings.

But I'm one of the most fortunate of my generation. I'm white, male, educated, from a middle class (and upwardly mobile) family and had the luxury of graduating after the recession was over. I'm no longer struggling to make ends meat but I'm still in a precarious position and a lot of possibilities for my life are rapidly closing.

I point to my example and say that if someone of my background and privilege can't afford to save for retirement or have kids, our country's future is ****ed.

Edit: It is really nice to see older people taking responsibility for their generation's actions. It's just too bad there's not enough like you to actually take corrective action.

We shouldn't be financing trillion dollar war machines; we should be cancelling student loans, providing health care and housing for our people. We are an astoundingly rich country with equally astounding spending choices. They say budgets are moral documents and ours show just how morally bankrupt we are as a country.

 

[Lexicus]

We shouldn't be financing trillion dollar war machines; we should be cancelling student loans, providing health care and housing for our people. We are an astoundingly rich country with equally astounding spending choices. They say budgets are moral documents and ours show just how morally bankrupt we are as a country.

We need to make moves to turn finance, the internet, housing and education into public utilities. We simply cannot allow these things to be controlled by organizations which see them all as revenue streams.

 

[Farm Boy]

Kids are never going to be cheap Hobbs. They will always cost. There is only willingness, or unwillingness, to pay*. The prices are only kinda accurately listed in dollars. The safety nets still work at least that well. And that's out here in what is, I've been hearing for the past year or so, the terribad Midwest.

*Not a judgement. Just being realistic.

 

[hobbsyoyo]

We need to make moves to turn finance, the internet, housing and education into public utilities. We simply cannot allow these things to be controlled by organizations which see them all as revenue streams.

Agreed.

I find myself going the opposite direction of the old proverb that there are no old progressives; that everyone gets more conservative as they age. I find myself inching closer and closer to outright communist views on a lot of things. I already call myself a socialist.

Kids are never going to be cheap Hobbs. They will always cost. There is only willingness, or unwillingness, to pay*. The prices are only kinda accurately listed in dollars. The safety nets still work at least that well. And that out here in what is, I'm told for the past several years, the terribad Midwest.

*Not a judgement. Just being realistic.

You've said this before and I've kind of ignored it to stop from getting to personal but whatevs -

I know kids are expensive. That's the not the problem. The problem is that I can't pay $3K in rent, $1K in student loans, $.7K in credit card debt, maintain a comfortable lifestyle, save for retirement and have a kid. Tell me how you make that math work dude. I know my maths, my livelihood depends on it and I can assure you it doesn't add up.

And the safety net is not there. I make too much to qualify for any assistance now and when I was desperately poor (Ever had your debit card turned down at Aldi buying Thanksgiving dinner? I have) I still didn't qualify for assistance. MO is one of 2 states that check your savings and if you have any savings at all (i.e. you are responsible), that disqualifies you from food stamps. It doesn't matter how poor you are, if you had any savings they expect you to drain it all before you get any help.

Then my wife got a slight pay raise, not enough to change our situation, mind you, but enough to put us over the income threshold for food stamps even after our savings were gone. The safety net is a joke dude. There is no assistance for raising kids in most of the country - especially so if you are not completely destitute. And then if you are destitute then suddenly paying for childcare is the last of your worries.

Finally, I do not live near relatives that count (we don't speak to my in-laws) so there is no family assistance to speak of. I would say a bunch more about the family situation but they aren't posters here and it wouldn't be fair to them.


Anyways, like I've said to civver before, please step outside your own experience and realize that it doesn't fit everyone else's reality. I would also plead with people reading this to understand that my story isn't unique. Some variation of my story is playing out right now in millions of millenial households (or their parent's basements) right now. We are screwed as a country. Our future was sold off to the highest bidder along time ago.

I am not asking for pity. I count myself very fortunate. I am asking for understanding for how badly our system is failing the current and future young generations.

 

[Farm Boy]

Hun, who's saving for retirement? I'm going to work until I get the grabber. And I think I know it.

 

[FriendlyFire]

Kids are never going to be cheap Hobbs. They will always cost. There is only willingness, or unwillingness, to pay*. The prices are only kinda accurately listed in dollars. The safety nets still work at least that well. And that's out here in what is, I've been hearing for the past year or so, the terribad Midwest.

Back to the old system of extended families, have the kids look after and support the grand parents
Might as well start now, because I doubt social security or medicare is going to exist much longer

 

[hobbsyoyo]

And if I tried to have kids on not pay for stuff, the debt collectors would be out in force. I'm not an irresponsible person anymore than I am bad at math.