As the American economy continues its crawl from the financial crisis, members of generation Y are being left behind: Almost 6 million young Americans aged 16 to 24 are neither in school nor working, according to a new report by the Opportunity National Coalition.
The consequences of long-term unemployment can bedevil young americans long after they find a job. Skills depreciate, savings either empty out or fail to accumulate in the first place, and lack of experience or a professional network can make it even harder to find work. Worse still, it’s no secret that the current structure of Social Security and Medicare is unsustainable, and generation Y will bear the brunt of the shortfall.
Perhaps an unlikely spokesman for the interests of young people, Wall Street billionaire Stanley Druckenmiller is leading a charge to illuminate the issue he has termed “generational theft.” In a recent interview with WSJ, the former money manager laid out several of the ways that boomers are sticking it to young Americans:
While many seniors believe they are simply drawing out the “savings” they were forced to deposit into Social Security and Medicare, they are actually drawing out much more, especially relative to later generations. That’s because politicians have voted to award the seniors ever more generous benefits. As a result, while today’s 65-year-olds will receive on average net lifetime benefits of $327,400, children born now will suffer net lifetime losses of $420,600 as they struggle to pay the bills of aging Americans.
One of the great ironies of the Obama presidency is that it has been a disaster for the young people who form the core of his political coalition. High unemployment is paired with exploding debt that they will have to finance whenever they eventually find jobs.
Whether or not Druckenmiller has the right answers to the problem, his outcry is well placed. The dearth of investment in young workers has them in a Catch-22: employers are less willing to make the effort to train recent college graduates—pulling up the ladder they once climbed to labor market success—and at the same time they cite inexperience as the operative fault of generation Y.
The longer millennials are out of the work force, the less likely they are to earn middle-class wages in their future careers, yet they will be expected to finance entitlement programs for boomers. Perhaps the boomers don’t recognize this trend, or perhaps they are, as Mr. Druckenmiller suggests, deliberately thieving from younger Americans. Either way, at some point members of generation Y will heed this warning. When they do, let’s hope their indignation generates the political pressure needed for serious reforms.