Young people today are facing a rare combination of circumstances that have led to an economic phenomenon that’s never happened before in the industrialized world: Millennials are the first generation of Americans to be worse off than their parents. In this year’s election season there seems to be a lot of surprise about the rise of populism and the revival of American socialism on the left, but if we look at current economic trends it isn’t that shocking at all.
What does “Worse Off” Mean?
When this point is made in the media it’s often met with derisive scoffs about how young people today have access to technology that would have been unthinkably expensive in the 60s and 70s, when baby boomers were joining the workforce. However, iPhones and computers have little to do with overall economic power.
Millennials Earn Less Money
Adjusted wages have visibly decreased since the turn of the century, and are now at the same level as they were in the early 80s. In the entire central and western United States, wages are actually even lower than they were in the 80s, with numbers being propped up by the urban industrial northeast.
Education Costs Increased
The last time that wages were this low college tuition fees were much more heavily subsidized by the government. Additionally, labor markets were much more accessible to workers, meaning that people who couldn’t afford to go to school even then could find middle-income jobs without going to college because of the U.S.’ strong manufacturing sector.
As a result, millennials are forced to go to college for degrees that they won’t be using in order to qualify for jobs that don’t even pay enough to service the debts racked up to go to college.
What This Means for Social Class
Millennials are the most highly educated group of workers in American history, but they’re rapidly falling out of the middle class because of their desperate financial situation. I’ve previously written about how this results in the collapse of the backbone of the middle class, home ownership. The middle class is built around the financial stability that comes with home ownership.
Because of this, more and more young people are simply unable to build the capital to purchase homes, leaving them stuck in the significantly more expensive rental system.
Those who do their research and make use of FHA loans, down payment assistance programs, and other mortgage grants to help dig themselves out might find themselves in a bit of hot water if Republican presidential candidates win the White House. Ted Cruz has named HUD (Housing and Urban Development) as a program that he wants to eliminate entirely, which would leave young Americans in particular in an even worse situation.
Young people are looking for a way out of a seemingly hopeless situation, and they feel that they’ve been let down by establishment politicians. Until that changes we can expect a lot more political activism on all sides.