the lost generation gets some media attention
Last year, riots in parts of Europe, especially in Greece, became disturbingly commonplace. By attributing the chaotic spasms of public fury to protests against austerity measures and unfocused anger at public officials blamed for financial malaises which put nations on the brink of defaulting on their foreign debts, or facing the imperative to cut costs to avoid the same fate, the media may have missed a very important group feeling the brunt of today’s economic turmoil according to the NYT. That group? Young college graduates who can’t find paying work in Southern Europe thanks to long and unproductive apprenticeship programs, low job growth, and unions interested in protecting their political sway and their most senior members. In Spain, nearly 40% of college grads are unemployed and there’s no telling how many have jobs that pay well below what they will have to earn to build a career and afford to live independently. No wonder some take to the streets to riot.
Even in the United States a similar problem will be looming since the Great Recession hit college students, grad students, and college grads very painfully and experts have warned that today’s bad economy is likely to permanently put younger generations behind in their incomes. By starting out at suppressed wages, future jobs using their previous wages as a point for negotiations are bound to pay lower. With millions of jobs lost for the foreseeable future, fewer opportunities, small wages, and in the United States, with tens of thousands in toxic debt used to pay for their now ignored education, they’ve even earned a label from writers who decide to examine their problems; The Lost Generation. Meanwhile, older managers who held on to their jobs in the financial turmoil and maintained their salaries will have access to a cheap, highly educated workforce in the future, and they have no plans to retire anytime soon since the same recession wreaked havoc on their 401k funds and investments. This turn of events has made quite a few young workers pretty upset. To them, older generations took them on a ride and are taking advantage of some of the most literate and educated workers around at bargain basement prices while waxing poetic about “paying one’s dues for a good job.”
As the younger generations see it, they’ve been paying dues by studying, working as interns, and starting out by running errands for older workers on a full time basis. When is all this dues-paying going to result in a job with which they can move out of their parents’ houses and stop living paycheck to paycheck? And in American colleges, students are wondering how they’ll ever repay their loans if they can’t find work while in school, then can’t find work after they graduate because they weren’t able to find work while in school and now come with a degree which often requires a premium on their salaries. A lot of undergraduates are wondering if they would be better off just going straight to work, skipping out on the debt, and maybe going back to school later, when they have the time, the money, and the need. Unfortunately for them, however, few companies looking for full time white collar employees are even willing to give an intern’s position to anyone who’s not at least enrolled in a college program. But a workforce made of younger, worse paid college grads with more and more older managers is eventually going to backfire on the older corporate achievers who’ll be picking and choosing the most educated and talented new workers at a lower price tag. Smaller earnings for the young means that the taxes they pay towards Social Security funds are smaller, and with Earth’s population graying and set for an almost imminent decline, retirees will have ever smaller pensions as a result.
Now, in the United States, where Social Security payments are supplemented with investment funds, this will not necessarily be a complete disaster. It will still take decades for this trend to start and until then, the older generations could begin refilling their coffers to acceptable levels. But since so many would definitely have no other choice but to rely on steady pensions to help ends meet, there will still be plenty of pain. In Europe, the savings rates may be higher and seniors could have more put away for the future, but state pensions are still the default source of their income and as they shrink, their finances will suffer substantially. This is why many European nations are starting to tighten their belts as much as possible and the United States would have to follow suit soon after, no many how politicians have to be forced to let go of their vast earmarks, discretionary funds, riders, and spending bills, kicking and screaming. Oddly, it’s in the older generations’ best interests to give younger, college educated workers jobs which pay a decent living wage so they can comfortably retire in due time. But since right now, they have certain lifestyles to maintain, they’re much more focused on the short term and setting themselves up for a nasty financial body blow twenty to thirty years down the line…