The American Interest
Analysis by Walter Russell Mead & Staff
Boomers to Generation Y: Are You Experienced?

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.

Published on October 21, 2013 5:15 pm
  • seattleoutcast

    I’m sure the blame will be placed on Generation X. The boomers will squeak by one last time as they shrug their mortal coils.

    • Nick Bidler

      It strikes me that my parents and grandparents don’t want to screw over anybody, but have been living with a misconception about social security all their lives, even my conservative-to-the-bone father: that social security was essentially a forced retirement fund, and the money they put in was to be doled out to them again when they became eligible. ‘If only it hadn’t been raided to pay for other things’ was my dad’s reason for dissatisfaction.

      Funny that I, who will not see one red cent of social security, know the most about it.

      • Bruce

        My parents’ and my generation (boomer) bankrupted the country by voting for entitlements where the math didn’t work and anyone that wanted to see it could see it. There was greed and entitlement on the part of “the greatest.” Did you see what happened when Reagan and Gingrich tried to slow the rate of increase in Medicare? Mass hysteria of “granny dying in the streets.” These people voted accordingly. I would say they deserve what they get, but it’s their children and grandchildren that are going to get it.

        • John_Q_Galt

          I hate Boomers, but the lat person who seriously tried to reform SocSec was a Boomer, George W Bush. The “Ownership Society” effort was shut down by Democrats in Congress…then, of course, 9/11 happened and it hit the memory hole.

          • https://www.facebook.com/ritchietheriveter Ritchie The Riveter

            A lot of his effort was made after 9/11 … but you are still right about the profit-phobic Dems shutting his reform efforts down.

      • ThomasD

        Willful ignorance is still ignorance. SCOTUS ruled FICA a tax shortly after it went into effect.

        Anyone who didn’t understand the political, practical, and fiscal ramifications of that did so willingly.

        As with any other political promise government ‘benefits’ are, at best, pay-as-you-go and nothing more.

    • Maggie

      If you read this blog you know that the Boomers are responsible for all the evils in the world. Never mind that the Greatest Generation and Silent Generation had the same deal. They get a pass.

      • seattleoutcast

        I agree with you on that. I prefer calling the “Greatest Generation” the “GI Generation” according to Howe and Strauss. They weren’t any greater than the other generations. (Just as boomers aren’t any worse than the other generations.) And the Silents do have a sense of entitlement. I believe it came from the notion that you just shut up and did your part, and you would be rewarded by the state.

        However, I do blame Boomers for the cultural mess that we are in today. Because of the enormous size of the generation, they had a greater impact than the Silents and X-ers.

      • ThomasD

        No, enough of them had the ‘fortune’ of dying near or before the expected retirement age.

  • Clayton Holbrook

    “One of the great ironies of the Obama presidency is that it has been a disaster for the young people”

    At least now they can mooch off their parents health coverage until they’re 26. Gee thx Pres Obama…/s

    A video with Mr. Druckenmiller and Geoffrey Canada regarding the subject: http://www.youtube.com/watch?v=fbgIiAnpcPc

  • Kavanna

    GenY is not the core of Obama’s voters.

    The young who did vote voted more for Obama in 2008 (less so in 2012). But voter participation rises with age, and the young overall don’t vote much.

    The core of Obamerica is the late-middle-aged and retired Boomers and many Silent Generation types. It is they who vote in large numbers and cried for help as asset values started their implosion in late 2006. They also expect the same great deal from entitlements that the war generation got. Many of these Boomers are also reliving their long-haired youth.

    It is true that identity politics and immigration have a played a big role as well (more in 2012 than in 2008).

    But the Boomers are the core as voters, activists, and donors.

    • Kavanna

      BTW, the interview with Druckenmiller should be read by everyone:

      http://online.wsj.com/news/articles/SB10001424052702303680404579141790296396688

      He’s done some nice work with Laurence Kotlikoff of BU on entitlements — Kotlikoff is a liberal and one-time Obama supporter. Now Kotlikoff’s increasingly sounding the alarm about national bankruptcy with more conservative or center-right types (like Niall Ferguson and Druckenmiller), because they’re the only ones who will listen.

    • Clayton Holbrook

      This goes across the traditional Dem and Repub lines as well. The biggest constituency for the D’s: the Boomers. The biggest constituency for the R’s: the Boomers.

    • Andrew Allison

      Sorry, but the core of Obama’s voters were the 94% of the unheard-of turnout by African-Americans who voted for him for no other reason than he’s (half) black. Talk about racism!

    • Diggsc

      The core of people writing, speaking, preaching AGAINST Obama’s socialist policies that are hurting Gen Y are Boomers. Read any conservative site. The core of people supporting Obama’s socialist policies are Gen Y. Read any leftist website or blog. As a Boomer, I have no guilt. I was one of those who was blue in the face telling Gen Y folks how Obama would steal their future. Gen Y folks literally HANDED me their wallets as I told them of their voting folly. I have no regrets, nor feeling of guilt. Economic stupidity is not something instinctual, it’s learned; and Gen Y learned it well.

      • Kavanna

        I don’t disagree with your characterization of GenY activists. They are truly nutty and brainwashed. But it was their parents’ generation who brainwashed them.

        Overall, GenY voters can’t be the core of Obama’s two victories. Young people just don’t vote enough. It’s the older voters.

        It is true that conservative and libertarians are found among the Boomers. But they are a minority. The bulk of conservative and libertarian activists today are GenX-ers, under 50 or so.

  • Andrew Allison

    I trust that, “The consequences of long-term unemployment can bedevil young americans [sic] long after they find a job.” was written by an intern who is being suitably educated!

  • lukelea

    And of course mass immigration doesn’t help at this particular moment in time. WRM ought to attack this subject. Or at least address it.

    • Clayton Holbrook

      That’s an excuse. Immigration is not the issue with disproportionate gov’t investment in older folks, or the poor job training of young people.

      • Homple

        It will be an issue when another 15 million or so untrained older and young people are let into the country.

        • ThomasD

          Who, even more so than the over educated and under experienced Generation Y, will prove unable to “earn middle-class wages in their future careers, yet they will be expected to finance entitlement programs for boomers.”

          They will only be fuel to the fire, and not being as remotely assimilated in the US culture or body politic, will prove quite a destabilizing force.

  • Diggsc

    Couldn’t happen to a more deserving group. Remember the cheers when Obama said he was going to “fundamentally change America”? That was Gen Y. Remember the cheers when Obama said that college students could remain children until they were 26, by remaining on mommy’s health insurance instead of having to strike out on their own like every generation of Americans before them? That was Gen Y. Remember the lying Obamacare enrollees who weren’t really enrolled in Obamacare? That was Gen Y. As a Boomer, I’m not stealing from Gen Y. They literally HANDED me their wallet as I tried to explain to them that voting for Obama was voting for their economic downfall. I’m not feeling any guilt, and my sympathy meter is still at zero.

  • koblog

    By all means get these GenY’ers– and their 1.5 kids — employed and signed up for Obamacare, immediately!

    And get them paying, in addition to the payroll tax, an additional 10-15% of their wages as the Obamacare tax to pay for ME. The Ponzi scheme worked great for the Greatest Generation when there were 4 or 5 workers for every retiree.

    Now GenY gets to fund not only my Social Security, Medicare and, if I play my cards right, food stamps, but also preexisting medical condition insurance for me and millions of illegal immigrants, their parents and children and give me a nice, comfy retirement.

    One problem — there are only two workers paying for every retiree now.

    Forward! Transformation!

    Get working, Gen Y! Now!

  • ntw

    I got my first job in IT working for a large american steel company. They brought in many college students to work part-time 2 or 3 days a week, put us through training classes on the specific technologies, and paid good wages for a student, ($15-20/hr, usually around 24 hours a week during the school year, and 40 hours in the summer). It was a great program for the students, and since they were getting “cheap” labor, they should have been satisfied as well.

    However, about 8 years ago, they stopped giving the test that they used to determine who should get in (it was basic math and flowcharting). Apparently there was some concern that it was discriminatory.They have since cut back on this program significantly.

    I would think that there are simple solutions to the problem of “if I train them, they’ll just leave”. Provide a carrot – if you get this training and show what you’ve done, we’ll promote you in a year and give you a 10% raise. Also provide a stick – after we pay for this training, you must stay for 6 months or repay the cost.

    In addition – In the IT field, at least, you are almost always going to get a better salary by leaving to get a new job. If internal promotions and salary increases would follow this pattern, companies would have a lot less to complain about. Instead, they say they “can’t find anyone”, which is just code for “we don’t want to pay what the job commands in the market, let us hire cheap H1B labor that can’t quit”.

  • iconoclast

    The majority of college degrees have become merely unbelievably expensive intelligence tests so employers can hire confident that the employees were reasonably smart, able to reason (real reasoning, not the ability to recite propaganda characterized by virtually all ‘critical thinking’ assignments), understanding common cultural referents, and able to communicate.

    Instead, high schools and most universities have produced a generation of ignorant illiterates who can only recite foolish propaganda and are able to reliably demonstrate the 2 minutes of hate when prompted. So of course employers demand experience instead of taking a chance on one of these poor deluded young adults.

    • ThomasD

      To many employers an “???????? studies” degree is a surefire intelligence test.

      Of a sort.

      • iconoclast

        Debasing the value of a degree with majors in propaganda/social agenda has been another good reason for the difficulty in finding work for many college graduates, even ones in traditionally valuable fields (History, English, Classics).

        STEM has turned into the only remaining intelligence test, but with the Academy’s wailing about lack of diversity in STEm that may change too.

  • ThomasD

    The Boomers may think they are only shafting Generation Y, who may not catch until it is too late for the Y’s to give vengeance.

    But it is Gen Y that will rise up right about the time when Gen X is looking for their ‘entitlements.’

    So, practically speaking it is Gen X that is being set up by the Boomers in order to take the fall.

    • Rick Caird

      As I said above, these programs were created by politicians long before the Boomers had any input. In fact, there is a story about Rostenkowski being chased down by seniors in Chicago (members of the “Greatest Generation”) because he had gotten legislation passed that added catastrophic care and prescription drug care to Medicare but took a deduction from Social Security to do so. The revolt by the seniors was so hot and heavy, the legislation was rescinded 3 months later.

  • Goldenah

    They’re going to have to follow the example of Dear Leader by lying on their resume, hiding their transcripts and trashing anyone who doubts their experience, qualifications and natural supremacy over any topic…

  • Rick Caird

    Intergenerational theft is way too strong a term. Social Security was created in 1935 by the FDR generation and Medicare and Medicaid were created in 1967, before any baby boomers had any power at all. The latter two were created by the “Greatest Generation”. So, blaming boomers for being forceably placed in existing programs is looking in the wrong place. In both cases, the problem was the government, in an attempt to hide the real costs, created Ponzi schemes rather than self funding and perpetuating programs.

    You may recall Bush started his second term with an effort to transition SS to a self funding private account system, but Democrats screamed like stuck pigs. Then, just yesterday, Trumka threatened union opposition to any Democrat who attempted entitlement reform.

    The problems are not the boomers. The problems were the idiot politicians who tried to hide the real costs.

    • Bruce

      The boomers went along willingly. It relieved them of the obligation of spending any of their own money when their parents got sick. Boomers own part of this as well.

      • Rick Caird

        Not so, Bruce. The front end of Boomers were still in college when Medicare was passed. We paid little attention to politics then. None of us were even born when SS was started.

        SS was sold as some kind of personal account with our names on it. You can go back and look at the literature of the period. Medicare was sold as pre-paid health insurance for when we reached 65. As I recall, the estimated cost for the mid 1990′s was to be somewhere are $67 billion/year. However, it grew way past that, which is why I do not trust the ObamaCare estimates.

        But, in any case your accusations against the boomer are completely false. Both Medicare and SS were things taken out of our pay that we could do nothing about nor did we really question them. We were too busy trying to get our careers going, our families started, and prospering. Do you really think we thought about SS and Medicare as a way to avoid supporting our parents? If so you are mistaken.

  • disqus_MHw7a2dXsU

    Generation Y voted overwhelmingly for the economy we have. They deserve to get it good and hard.

    I have no sympathy for anyone who brings disaster on himself.

  • Russell Gold

    A lot of the damage was done by over-indulgent parents, lax teachers, and college administrators who were more interesting in keeping tuition-paying customers than actually teaching. Too many Gen-Y’ers now have a strong sense of entitlement, a poor work ethic, and little in the way of usable skills. I know several employers who have had bad luck hiring them, and are reluctant to do so again.

  • 0bamasnought

    Ok, how many of you “Boomers” have put off retirement because you understand how much more money you will need for said retirement?

    Here’s my deal, I retired at 45, but went back to work because I was bored. My friends think I am crazy for working, but I would be crazier if I didn’t.

    I am the person that recruits new employees, and the company I work for actually DOESN’T want to hire H1-B’s, because they feel an obligation to the community that provides the profits.

    But the second thing I had to do, was set up a program to access the candidates actual knowledge, so we could hire the very best.

    So the news flash is this; the majority of the recent grads I deal with cannot read, write, or communicate at what used to be considered a collegiate level.

    I have had more luck with for-profit training centers. Usually an instructor will get a real hotshot, and refer them to me.

    No bounty paid, no gifts given.