Why young Americans are getting poorer
Folks ages 29 to 37 have watched their net worth plummet over the past few decades, and there are several reasons.
But younger generations are just getting poorer, according to a new study from the Urban Institute. People younger than 47 just haven't been able to accumulate much money or build up their net worth through homebuying or other investments.
The authors looked at how Americans' average net worth has changed from 1983 through 2010 and found a dramatic difference between older and younger generations.
Those 56 to 64 and those older than 74 more than doubled their net worth, with gains of 120% and 149%, respectively. The picture was still rosy for those 47 to 55 and 65 to 73, with a rise in net worth of 76% and 79%.
But all that progress comes to a halt with younger generations. Those 38 to 46 saw their net worth rise by just 26%, and those 29 to 37 saw their net worth drop by 21%.
Why are young people getting left behind? One of the study's authors, Gene Steuerle, says there are several factors:
The housing bubble. Younger homeowners were more likely to have the steepest mortgage balances and the least home equity built up. Consider a home that fell in value by 20%, Steuerle writes. A younger owner with only 20% equity would see a 100% drop in housing net worth, but an older owner with the mortgage paid off would see only a 20% drop.
The stock market. Older investors were more likely to invest in bonds and other assets that have recovered or gone up in value since the Great Recession.
Lower employment. Younger Americans are seeing higher unemployment rates. They're also seeing lower relative minimum wages.
Less savings. Younger people are seeing a bigger cut of their pay taken out to pay for Social Security and health care.
"Maybe, more than just maybe, it's time to think about investing in the young," Steuerle writes.
The vast majority of them, however, like to spend above their means. They want everything their parents have, but lack the income to achieve it. They also want everything NOW and refuse to accept, their parents worked decades for what they have. Years ago, you didn't go out or take elaborate vacations, unless you had the cash to pay for it. Today, many young people simply charge it. They choose to overlook the fact that the bill needs to be paid eventually. Those with the entitlement mentality are not going to fend well long term. But then again, many have enabling parents that will bail them out financially.
Yep, keep the average workers wage flat for decades and let the corporations, CEO's and all the "1%" income climb year after year.
Evidently the conservatives today that support keeping average workers wages flat while the rich get richer don't remember the 50's, 60's, 70's when a family lived quite well with dad working and mom staying home to raise the children, that state colleges and university education was virtually free, the health insurance was affordable and covered everything and medical costs were appropriate and doctors even made house calls. Companies were expanding, workers were treated with respect and usually had paid health insurance, pensions were fully funded and the CEO still made a nice living, took fabulous vacations, and was happy to simply live in the biggest house on the block and was satisfied with his standard of living.
Then the 80's arrived Reagan was voted president and since then the tables have turned. Workers and unions have been demonized, CEO's have demanded obscene income, benefits, and golden parachutes just in case, corporations wanted more profits so factories were closed and moved off shore, corporate welfare grew, politicians owed the "1%" for contributing to their re-election campaigns and now the propaganda machine has convinced a whole bunch of Americans to trust the **** is spews on Fox News and PAC. Americans have been "hoodwinked" and they can't even see that.
Look out Serfdom, here we come.
Folks want to complain about food stamps but now about the massive outsourcing of jobs and lower wages of this era. Pay folks a living wage and most of these problems would simply vanish.
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