Here is a list of generous men
Whose good works have not been forgotten.
In their descendants there remains
A rich inheritance born of them.
- Ecclesiastes
Where is the rich inheritance we leave our children? We, the baby boom generation, how generous have we been? Who will sing our praises?
The news reports tell us that for the last 20 years, only we... and people older and richer than we are... have made financial progress. In 1984, the median net worth of households 35 and younger was $11,500. Households of people 65 and older had over 10 times as much: $120,000.
As of 2009, the net worth of the median household under 35 had been divided in three. It was only $3,600. But the net worth of older households went up - to $170,000 - 50 times as much.
According to a chart from the Economic Policy Institute, it looks as though households of Americans between 35 and 55 years old also lost ground - with the 50-ish households dropping from a net worth of around $150,000 in 1989 to about $110,000 today.
Hmmm... Twenty years is a long time. We're not sure whether the ages apply to the people today or 20 years ago. But don't worry about it. You get the idea.
Two Big DowndraftsEconomists explain that young people got caught in two big downdrafts. First, the dot-com bust shook out their meager investments. We older people avoided it. Probably because we couldn't understand what they were talking about.
Then came the housing bubble. Younger people were unlucky. They were trading up at the wrong time, with little equity in their houses. We, on the other hand, already owned our houses - often with large unrealized capital gains and little or no mortgages left.
Many of the younger people are still (five years after the crack-up in subprime) underwater with their mortgages. Some say they are drowning.
Not only did assets get whacked twice, but also the earnings of the young and not-so-young have been hit hard.
Right after World War II, wages shot up. In the year your editor was born (1948) people were earning about 80% more - in real terms - than they had 10 years before. By the 1970s these wages gains had declined sharply.
But in the Carter years our parents were still earning 50% more than they had during the Kennedy-Johnson era. In the 1980s, wage gains dropped. They bounced a bit from 1995 to 2005. Now they're close to zero.
What's worse, many young people can't get jobs. We recently read an article about newly graduated lawyers and MBAs who couldn't find work.
These professional groups have a bad tendency toward zombification. Still, it's a bad sign when some of the best educated young people in the country still find it hard to locate gainful employment.
If the young find jobs at all they are more likely than before to be low-wage jobs. Since 2001, the number of mid-wage jobs has fallen by more than 7%. Low-wage jobs are up more than 8%.
And incomes are down for practically everyone. Overall, real median incomes for American households have fallen 8%, from nearly $56,000 to barely over $51,000.
A Matter of Luck?Remember what it was like in the 1950s? A man could go out and earn a decent living at an ordinary job. He didn't have to be a genius. He didn't have to work 80 hours a week. He could manage a store. Or he could be a carpenter. Or a factory worker. And with his earnings alone he could afford a modest house, a normal car... and an annual vacation.
Healthcare? He paid for it as he went along. Education? State universities were still cheap. (In 1969-70, we were able to go for a year to the University of Maryland on money we earned during a summer vacation.)
Childcare? Household help? The woman of the house stayed home and did it. When dad got home from work she was waiting for him with a cold beer in her hand.
We make no claim that this was the height of civilization. People were oafish then too. Houses were small. TV reception was limited. Automobiles were gas guzzlers (but at 25 cents a gallon, who cared?). Restaurant menus were dull. And wine came in bottles with straw wrapped around them.
But remember the advertising from National Bohemian, a beer "brewed on the shores of the Chesapeake Bay"? It claimed to be "from the land of pleasant living."
Economically, it was pleasant. Wages went up. Jobs were plentiful. Debt. was low. Gasoline and housing were cheap.
Since then, it seems as though the young have to work harder to get started in life... and then have to work harder to keep up. The typical household works two jobs - if it can find them - racing from work to childcare.
And healthcare, which used to be occasional and reasonable, has become a major burden. The annual cost of family healthcare insurance has risen to over $15,000.
Childcare, too, used to be a negligible expense to the typical family. Now it is a major one.
Was all this a matter of luck? Good luck for us? Bad luck for them? Not exactly. The young have been ripped off. We'll explain how on Monday...
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