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Debt to America: twenty-somethings complain they've been shafted. And they're right
Washington Monthly, May, 2006 by David Madland
Generation Debt: Why Now Is a Terrible Time to be Young By Anya Kamenetz Riverhead, $23.95
Each generation seems to be genetically programmed to pooh-pooh the problems of those who come after them, often invoking historical tales of woe in an unending game of one-upmanship. When I was your age, we had to walk everywhere--uphill, both ways. We lived through rations and war. We had phones with cords and our computers ran on dial-up. The young adults of 2006 may enjoy technological innovations their grandparents never imagined, but by most other standards--paying for school, securing a good job, affording a home, and supporting a family-their ascent to self-sufficient adulthood is steeper than at any other time in the past 30 years.
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Anya Kamenetz, a 25-year-old writer for the Village Voice and author of Generation Debt: Why Now is a Terrible Time to be Young, is at the age when, not so long ago, many young adults were already married, buying their first homes, and settling into family life. But Kamenetz knows that those milestones are more difficult for her and her peers to achieve, and that it will take them longer to reach the next level of official adulthood. Unlike many older observers, however, she does not blame this on a slacker generation of adults kids who prefer to leech off their parents and avoid long-term commitments to relationships or real estate. Instead, writing in short vignettes that relate the frustrations of young adults struggling to become financially stable, Kamenetz identifies economic and political structural changes as the source of the problem.
Ultimately, however, Kamenetz's generational cynicism prevents her from imagining ways to turn this situation around, and she restricts most of her solutions to embracing her peers and teaching them how to cope with their lot in life.
The members of what Kamenetz calls "generation debt" aren't putting off settling down just to annoy their grandchild-craving mothers. Once they leave their parents' houses, these young adults start falling into a hole that will take them the next decade or more to crawl out of. Start with college: Previous generations enjoyed a government support structure that gave many working and middleclass students the means to attend college, through such programs as the GI Bill and the Higher Education Act, which created the Pell Grant. Today, as tuition costs have risen exponentially, government support has withered away. Federal grants, which once covered most of the costs of college, now barely make a dent.
Over the past 30 years, Pell Grants have gone from paying three-quarters of college costs to covering about one-third of the costs. State governments, which used to heavily subsidize in-state tuition, have significantly cut back funding, making state schools much less affordable. In the late 1970s, average tuition for a four-year state college was less than $2,000 in 2003 dollars; today, it is about 30 times higher. As a result, twentysomethings from middle--or lower-income families take on incapacitating levels of student loans; the average college student graduates with $20,000 in debt.
When college graduates do enter the job market, saddled with a hefty loan payments, they earn less than their parents--or even their older cousins--did at the same age. Young male college graduates today earn about $3,000 less than they did a generation ago. For the majority of people who do not have a four-year degree, the situation has gotten even worse. The median annual salary for a worker between the ages of 25 and 34 without a college degree is $10,000 less than it was 30 years ago.
For these struggling workers, buying a house is often the final nail. As housing prices rise by double digits annually, twentysomethings who do purchase a home shoulder housing debt that is more than 50 percent higher than it was for their parents at the same age. Throw in the high cost of raising children, pensions daily becoming a thing of the past, and debates about the future of Social Security, and retirement--already a long way off--seems like just a pipe dream. Even if, as these young adults age, they find ways to increase their earnings enough to support themselves, their future looks bleak.
Nor is it clear what the broader consequences of this shift will be. It took a generation for Chinas one-child policy to produce an enormous gender imbalance and accompanying social problems for that country. Delayed adulthood could have demographic and sociological effects in the United States that are not clear for many years.
Kamenetz spends most of her book laying out this grim picture before turning to consider possible solutions. She proposes everything from student loan reform to simple living to entrepreneurship. Perhaps her most radical suggestion is to promote "un-schooling" plans, in which each person develops his or her own life curriculum. The problem with all of this is that Kamenetz appears to have taken on another characteristic of her generation: cynicism. She is so convinced that the structural changes that led to the current situation are permanent and unyielding and beyond her control that she focuses her suggestions more on coping than on organizing or agitating for change.
