out a place for themselves in the middle class.
Kai and her friends have prepared themselves for the future better than any other generation in history. They are more educated: today a higher proportion of young people graduate from high school, graduate from college, and even pick up postgrad degrees. They have more part-time work experience from their high school and college years. They are computer savvy, and their experience with technology often makes them teachers rather than apprentices to people a generation older.
As young people enter the job market and begin to put shape to their lives, they should be flying high. But they aren’t.
The unemployment rate for people sixteen to twenty-four years old who are actively looking for jobs is 12 percent—almost three times higher than for their older counterparts.
The $1.4 trillion burden of student loan debt that’s being carried by those who went to college is unlike any in history—and the amount keeps climbing, at a rate of about $100 billion a year.
For the first time in modern American history, more people between eighteen and thirty-five live with their parents than have a place of their own.
The odds that a young person today will earn more than their parents have gone from a near certainty a generation ago to a coin flip today.
Despite their better educations, today’s millennials earn about 20 percent less than boomers earned at the same point in their lives.
Young people—America’s future—have been dealt a terrible hand. Those who don’t make it through college have little chance of making it into the middle class. And those who make it through college are often so swamped with debt that they begin their adult lives in a deep financial hole. College is the big divide between those who will have a lottery ticket for the middle class and those who won’t, but in the end, even for those who get a diploma, it’s still only a lottery ticket. Millions of college graduates today are unemployed or working at temp jobs or part-time jobs or jobs that don’t require a college degree, trying to get a foothold in an economy that is no longer providing expanded opportunity for anyone who can flash a diploma.
Today twenty-five-year-olds start their adult lives in an economy where the most sustained job growth is in minimum-wage and near-minimum-wage work. Many have no realistic chance of ever owning the kinds of homes their parents purchased or ever starting the kinds of businesses their parents did. Today’s young people may be the first generation in American history to end up worse off than their parents.
Kai’s story breaks my heart—and the unfairness of it makes me want to spit. How can the country that once gave a kid like me multiple chances to do something with my life now shut out a talented and hardworking young woman like Kai? How can any country expect to build a future if there’s no room for a person like Kai to get an education, start down the road toward a good career, and build the foundation of a good life?
THE SQUEEZE NEVER STOPS
When she was younger, Gina worked hard to build that foundation. As she’s aged, however, it has all but crumbled. She is fifty now, and when she thinks about retirement, she seems to be at a loss. “In a perfect world, I can retire to Key Largo,” she says, and then she gives her throaty laugh. But in her real world? “You know what? I don’t really know.” She notes that climbing up and down ladders and carrying loads of shingles is taking a toll on Darren. He is really feeling his arthritis. “He said he’ll probably die outside,” she tells me, trying not to sound too downbeat. Mostly, she tries not to think about the future too much. “Just hope for the best,” she says.
The economic punches that have hit America’s middle class have reverberated through their retirement years. Once again, the numbers that lurk just underneath the overall good news about the economy tell a grim story:
Bankruptcy filings for people sixty-five and over have increased almost fourfold since 1991.
For fifteen million seniors, Social Security is all that stands between them and poverty.
Among seniors who live in nursing homes, 62 percent don’t have enough money to cover the cost of their care.
Nearly half of all families don’t have a single dollar put away in a retirement account.
Part of the economic problem starts with good news: people are living longer. The fastest-growing age group in America is known as the “old-old,” the term coined to describe people eighty-five and up. The next-fastest-growing group includes those aged seventy-five to eighty-four, and the one after that is for those sixty-five to seventy-four. Yes, there’s a pattern here.
That’s heartening for everyone who is facing old age and for everyone who loves to have a grandma or grandpa around to buy ice cream and admire every crayon drawing the kids produce. But it also means that retirement now costs more than it used to, a whole lot more. People retiring today at sixty-five need enough money to sustain them for an average of twenty more years. That’s about four years longer than they needed in 1970.
Retirees also need to worry about the rising expenses of those final years, particularly for health care and nursing homes. Today, the average cost of a semiprivate room in a nursing home is more than $82,000 a year, and the costs just keep going up.
Rising costs: sound familiar? In fact, many of the problems facing those who are approaching their later years are a lot like the problems facing other working families. But for older people, the punches land just as they are ending their working years and heading into retirement.
It starts with savings. Once again, the top-line number looks great: Americans have saved a total of $25 trillion for retirement. Wow! Let’s order a double round of desserts from the Denny’s senior special!
Not so fast. “Retirement savings” includes a lot of fancy investments that are held by folks at the tippy top of the income scale. A handful of CEOs and superstars have socked away large fortunes, but for most workers, the numbers are still surprisingly grim. The median worker—the person right in the middle of all those who have retirement accounts—has only $18,433 tucked away. And they are the lucky ones. About half of families have nothing saved. Zero. Zip. Hmm: maybe we should change that celebratory dessert to one small dish of ice cream with two spoons?
And what about those employer plans? By the 1960s, about half of all private sector workers had retirement plans that guaranteed benefits for life. Today that number is down to about 13 percent. As corporate executives figured out that they could boost profits (and their own compensation packages) by squeezing rank-and-file workers, generous retirement plans were put on the chopping block. With every passing year, those employer plans look more like an endangered species headed for extinction.
But Social Security can make up the difference, right? Wrong. Social