? U.S. Universities Still Lead |
| Rising Wages in China ?
March 20, 2006
Young Americans Take It on the Chin
I'm an optimist, but I'm forced to admit that this has not been a good decade for young Americans. See my story here.
TrackBack URL for this entry:
This many years of "falling behind" means this entire generation will never, ever catch up and have the living standards their parents had. Not even close. Are things really any better for the generation coming into the workforce, behind them? It seems like a systemic problem to me; a permanent one that will change the standard of living in this country forever.
Posted by: Brandon W at March 20, 2006 08:58 AM
Their parents will have fewer children to support them in their old age, but they stand a better chance at inheriting much of that wealth in the future.
Posted by: Lord at March 20, 2006 03:04 PM
The wealth experienced by the baby boom generation marked a high point that is not being experienced by their children. It's good you speak of optimism/pessimism, Mike, since the books that you mention in your article (like "Strapped" and "Generation Debt") demonstrate that more than anything, the <35 age group feels pessimistic about its prospects.
With education and homes costing more and more every year, with a president who stresses we should not expect social security to be any useful, and with real wages depressed, mood is a very critical point to discuss.
The main reason bubble-chatters cheer so eagerly for real-estate prices to crash down is because of the symbolic value such a "correction" entails. It's not about wanting other people to lose their homes - it's about wanting see an attainable and affordable future.
Posted by: Yariv at March 20, 2006 03:41 PM
It has been especially difficult in Metro Detroit. We never had the recovery after 2001. Now I am considering looking at other states for work but I would have to come up with cash equal to 7.5% of my home's value in order to close a sale on it. That makes leaving the state a bit tough. I have a management degree and experience (though getting out dated) working with military aircraft electrical systems and the best thing I can find is a fast food, or retail job that pays somewhere between 25 and 30 K. I've been looking for something better since I graduated from NMU in December of 2001.
Posted by: Joe at March 20, 2006 09:37 PM
Yariv is correct. I am in the under 35 crowd (barely) and am hoping for a crash in the real estate market - or at least a reasonable decline - because a house is completely out of the range of reasonably affordable right now. By the time I add in property taxes, PMI, and covering of maintenance of the house I'm pushing $2000/mo on a pretty average home. And that doesn't even count the extra cost of utilities that are built into my rent. I pay $650/mo renting a small 1 bedroom apartment. Now, I understand you can tax deduct a certain amount of interest at the end of the year, and I understand the equity gains (well, once you work past the front-loaded interest), but that's still an extra $1350/mo or $16,200/yr (POST-tax money) coming out of my pocket. By the time I pay my rent, bills, car payment, student loans (through grad school), and eat, I don't have another $1350/mo.
And I'm hardly a special case.
So the under-35 crowd continues to cross their fingers and hope wages will pick up, or home prices will come down... or SOMETHING to make the standard of living that our parents have feasible. But I'm afraid it won't happen.
Posted by: Brandon W at March 20, 2006 10:06 PM
Increased productivity per employee has not been a return to wage deal. The U.S. is a transactional economy, doing the final sale of imported products, the consumer the driver of the economy. The trick is to add purchasing power without removing profit.
Bad place to start, but to return money to consumers, tax adjustments can be made to work, flat tax, or extra relief at lower incomes levels can be put money into consumer hands. Young or retired. The political will to add money into consumers hands is past due.
More tech companies want to add business process into the hands of more small local companies.
By the way take a walk on New Tech in Asia blog, they promise more and more new tech to consume, or to sell into the U.S. transactional economy to consumers.
Posted by: Mike Reardon at March 21, 2006 02:31 AM
I was also in the <35 crowd a few years ago and I took a good hard look at the situation... and said goodbye to US shores. Now I live overseas, have lowered my tax burden to zero, while I have the equivalent earnings of over $80,000 if you consider the taxes that I'm NOT paying and the ever-lowering excnange rate. How did I do it? I teach English in Asia at a university and do proofreading on the side - that's all. I do have a grad degree and can speak the language (some elbow grease does help), but we save over $3500 per month without trying. Oh, did I mention that I only work 3 days a week, plus that I get 20 weeks of paid vacation during which I travel anywhere I want? I'm surprised that more folks haven't caught on to this life, but I rarely see another American here, and I live in a city of nearly a million people. I had 4 offers after the last job hunt - and there are always universities looking for teachers. There are 3 countries (Japan, Korea and Taiwan) where people can do this, and once you're set up (including the social network, the degree and the language skills), the money rolls in, and the taxman leaves you alone. Funny thing: I've seen more of America's vacation spots SINCE I left compared to when I worked in America, and had relatively NO vacation time.
Posted by: Jim C at April 9, 2006 09:49 PM
The youth of society reap the rewards of prosperity and receive the drawbacks to being at the back of the line. They pay more for real property and less for technology. Everyone has a choice of whether to go into debt or not. Some debt is related to college, some debt could be to start a business, and
other debt could be a mortgage larger than most people's inheritance over a lifetime. The last debt is credit card debt that treats all consumers equally by granting the short term a long term reality.
There a many ways to the top, and many can fall from a safe plateau
Posted by: Frank Drake at August 17, 2006 01:44 PM