Baby boomers robbed young of all hope – ‘A heritage of economic carnage’ by ‘investment bankers, tech oligarchs’ that have ‘undermined chances of upward mobility’
How the boomers robbed the young of all hope
Younger generations inherit a world in which the middle ranks are struggling almost everywhere
April 18, 2022 | 12:00 am
FROM THE MAGAZINE
Written by: Joel Kotkin
“Young people do not degenerate; this occurs only after grown men have already become corrupt.” — Montesquieu, The Spirit of Laws, 1748.
The great test of a generation is whether it leaves better prospects for its descendants. Yet by virtually every indication, the baby boomers, and even the Gen Xers, are leaving a heritage of economic carnage — as well as a growing social and cultural dissipation that could shape our future and the fate of democratic self-rule, and not for the better. This legacy comes not from outside forces, but the investment bankers, tech oligarchs and their partners in the clerisy who have weakened their national economies and undermined the chances of upward mobility for most young people.
About 90 percent of those born in 1940 grew up to earn higher incomes than their parents, according to researchers at Harvard’s Opportunity Insights project. The same is true for only half of those born in the 1980s. In contrast to baby boomers’ massive rise into the property-owning middle class, millennials inherit a world in which the middle ranks are struggling almost everywhere, notes the OECD. According to a recent study by the Federal Reserve Bank of St. Louis, American millennials are in danger of becoming a “lost generation” in terms of wealth accumulation.
It is no surprise that recent college graduates report the highest levels of anxiety in the country; suicides, particularly among young girls, have soared to record levels according to the Centers for Disease Control. By one measurement, one in five teenage girls suffered “a major depressive episode” in the years before the coronavirus pandemic, and two in three college students reported problems with loneliness. This pattern appears in virtually every advanced country. In 2017 the Pew Research Center found that poll respondents in France, Britain, Spain, Italy and Germany are even more pessimistic about the next generation than those in the United States. Concern for the next generation’s prospects is also widespread in such important developing countries as India, South Africa and Nigeria. The Japanese are even more discouraged: three-quarters of those polled there believe that things will be worse for the next generation.
This sad state of affairs is doubly tragic for having been largely self-inflicted. Over the past half century, our corporate elites have shifted many activities, notably manufacturing but also technology, to other countries. Since 1990 the US deficit in trade in goods with China has ballooned from less than $10 billion annually to a high of $418 billion in 2018. This has enriched many of our leading manufacturing companies — notably Apple — while costing an estimated 3.4 million US jobs since 2001. During this period China increased its share of world manufacturing from less than 10 to 30 percent. Our corporate elites, and their enablers, have embraced the notion that production — whether energy or manufactured goods — is old-fashioned and does not hold a central role in economic prosperity. Economist Christina Romer, who chaired President Obama’s Council of Economic Advisers, once dismissed concerns about industrial losses as reflecting merely “sentiment and history.”
It was not the Chinese or the Russians who forced deindustrialization, but high-paid consultants and financial hegemons, suggests Tom Mahoney, a principal figure at Mforesight, a firm that studies and advocates for manufacturing innovation. The shift away from production was sold largely by high-end “experts” who offered higher short-term profits and sold the idea that a manufacturing firm could maintain itself long-term without controlling its own production. “McKinsey is the great evil empire,” he contends, “along with anyone with an MBA.”
The next generation will pay the price for consultants’ private jets and lush retreats. According to a Deloitte study, millennials in the United States will hold barely 16 percent of the nation’s wealth in 2030, when they will be the largest adult generation by far. Gen Xers, the preceding generation, will hold 31 percent, while boomers, entering their eighties and nineties, will still control 45 percent of the nation’s wealth. If anything, the pandemic helped older, wealthier people, while young people, particularly in the working class, saw their economic prospects, not to mention their mental health, decline.
The betrayal of the young starts with education. Whereas in the past college graduates could at least feel assured of a better life, this is no longer largely the case outside the elite schools. The vast majority of young people, according to surveys by the consulting firm Emsi, now prioritize finding a well-paid job over the social uplift and hefty tuition associated with four-year colleges, which have been losing students for years.
There’s ample reason for younger people to feel frustration with the educracy. A recent analysis of Federal Reserve data shows that young Americans with a college degree today earn about the same on average as their boomer grandparents without degrees did at the same age. Upwards of 40 percent of recent college graduates now work in jobs that don’t typically require a college degree at all. Indeed, a 2020 survey found that only a third of undergraduates see their educations as advancing their career goals and barely one in five think a bachelor’s is worth the cost.
Unlike their forebears, the next generation seems likely to live increasingly as propertyless serfs. Homes today account for roughly two-thirds of the wealth of middle-income Americans, and homeowners have a median net worth roughly eighty times that of renters, according to the Census Bureau. Until recently, homeownership rates in the United States grew rapidly, from 44 percent in 1940 to 63 percent thirty years later. Now the trend is in the opposite direction. According to Census Bureau data, the rate of homeownership among young adults aged 25 to 34 was 45.4 percent for Generation X, but dropped to 37 percent for millennials.
Similar trends are seen in other high-income countries. Australia historically has had high rates of homeownership, but the rate among those twenty-five to thirty-four years old dropped from more than 60 percent in 1981 to only 45 percent in 2016. The proportion of owner-occupied housing has dropped by 10 percent in the last twenty-five years.
In Britain, large financial institutions like Lloyds Bank are working overtime to make it even harder for middle-class families, gobbling up apartments and even single-family homes in a frenzy of acquisition. Only a third of British millennials own a home, compared with almost two-thirds of baby boomers at the same stage in their lives. On average, UK millennials will need nineteen years to save for a home deposit — a recent suggestion by wealthy TV presenter Kirstie Allsopp that it could be done by cutting out Netflix and gym memberships was met with howls of pain and derision. At least a third of the cohort are likely to remain renters for life.
The investor-acquisition trend is already pronounced and growing in the US as well, led by firms like BlackRock. In the first quarter of 2021, investors accounted for roughly one out of every seven homes bought, a marked increase from previous years. Analysts predict that soon most middle-class people will be “priced out” of ownership in a “rentership society,” where homes, furniture and other necessities are turned into rental products offering endless cashflow to the oligarchs. The architects of the World Economic Forum’s corporatist “great reset” put it so nicely: “You’ll own nothing. And you’ll be happy.”
The dependency of the expanding serf class is also supported by green-advocacy groups, which have little interest in single-family-owned housing. In the UK, the government’s Climate Change Committee is putting forward proposals that would make it impossible to sell single-family homes — including those built mere decades ago — that do not meet stringent energy standards. Sadly, President Biden’s administration seems to be determined to push this agenda across America.
Such policies are likely to accelerate a concentration of ownership that has grown in both Europe and in post-Brexit Britain. Even in the United States, a country that never experienced feudalism, property ownership now increasingly depends on what one writer calls “the funnel of privilege.” In America, those in Generation Z are three times as likely as the boomers were to count on inheritance for their retirement — presumably from their boomer folks. Among the youngest cohort, those aged eighteen to twenty-two, over 60 percent see inheritance as their primary source of wealth as they age.
These tough economic conditions could stiffen the resolve of the next generation, but to a large extent, this generation seems emotionally crippled. Thanks to the pandemic and alarm about climate change, young people are bombarded by fearmongering. Alarmist messages are pushed by social media and academics more interested in political agendas than critical thinking. Many have been persuaded, largely by the relentless and well-funded green lobby — now openly paying for “journalists” at places like the Associated Press — that the future will become a nightmare of food shortages, devastated coastlines, endless droughts and irreversible poverty.
At such outlets as the New York Times searing tales of “eco-anxiety” are taken very seriously, while dissing such one-time givens as family formation, childbearing, and home-buying. The environmental magazine Grist envisions a “hero generation” that will escape the bourgeois suburban drudgeries of family and work that ensnared their parents. They may not yet have moved en masse to the cities, but they’ve rejected at least part of the package: since 2019 millennials have experienced the fastest decline in the birth rate in twenty years, with the lowest total numbers since 1979, when the country’s population was 100 million smaller than it is today.
These trends reflect not so much millennial cultural preferences — despite the headlines, most millennials want to get married and have children — as the financial worries discussed above. American millennial attitudes to family are not significantly different from those of prior generations, albeit with a greater emphasis on gender equality.
Part of the difficulty with family formation may have to do with the various triumphs of the virtual over real-world human interaction. Today’s tech-savvy children clearly have problems relating to the opposite sex, a phenomenon traceable in part to their immersion in social media and easy access to internet porn. In the US, Finland, Sweden, Denmark, Japan, China and the United Kingdom, younger people are disproportionately falling into what researchers have called a “sex recession.” Artificial beings even appear poised to replace actual people in the most intimate of human activities. One LA entrepreneur invested in a sex-robot shop to fill a perceived need for “a safe space for men to practice healthy sexual interactions ‘without the complexity of a normal human relationship.’”
This does not bode well for the next generation’s ability to meet tomorrow’s challenges, especially as they become less assertive and more risk-averse than earlier generations. Many lack basic “soft skills,” such as knowing how to interact with other people: in Australia, researchers have found that excessive time glued to screens has resulted in a younger generation “incapable of small talk, critical thinking and problem-solving.” A survey of American millennials found that 65 percent did not feel comfortable engaging with another person in a face-to-face conversation, and 80 percent preferred conversing digitally.
This may be a critical untold story behind the current “labor shortage.” Simply put, many jobs simply do not pay enough to keep up with soaring food, rent and housing prices; hanging out on their parents’ couches immersed in the emergent metaverse is more appealing than learning a trade or having to show up to work. The notion of a “post-work” world also fits the de-growth philosophy — a ratcheting down of consumption among the masses, reduction in the size of homes, limited mobility, heating and cooling — pushed by powerful corporations and their green allies. Reared on ever more realistic video games, this soft generation, note alarmed armed-services recruiters, are increasingly too flabby to make it through basic training.
This kind of denatured, wired existence has emerged most powerfully in East Asia. Japan’s shinjinrui (“new race”) have faced a stagnant economy and a general social malaise for decades. They and their successors have followed a pattern of avoiding full-time jobs, sex, marriage and children, preferring often to stay with their parents, spending their money on travel or digital pleasures. Many prefer to subsist on the gig economy as “freeters” rather than following the traditional path of lifetime employment.
This pattern is beginning to emerge in China, where prospects for the young often do not meet their expectations. In 2017, eight million college graduates entered the job market, for many to find they could only earn salaries they might have gotten by going to work in a factory straight out of high school. Rather than grow up to be good communists, or useful businesspeople, many younger Chinese, in the words of author Zijia Song, choose to “lie flat” rather than engage in the country’s intense rat race. Guangming Daily, a CCP publication, has attacked this tendency, noting that it “obviously is not beneficial” for China’s continued economic growth.
It’s hardly productive to chastise our offspring for being discouraged. Instead, we should look for ways to restore promise to them. This will have to come from outside the elites who have, somewhat bizarrely or even masochistically, allied themselves with zealots hostile to classical liberalism and capitalist enterprise. Here there is an echo of the run-up to the French Revolution, when many French aristocrats, as Tocqueville noted, not only lived dissolute lives but supported writers whose polemics ended up threatening “their own rights and even their existence.” Ultimately our fashionably left-leaning oligarchs may discover that their embrace of woke radicals could threaten their current status. In the 2016 primaries, the declared socialist Bernie Sanders easily outpolled Hillary Clinton and Donald Trump combined among voters aged under thirty. Socialism has become something of a rage among younger people. A 2016 poll conducted by the Victims of Communism Memorial Foundation found that 44 percent of American millennials favored socialism while 14 percent chose fascism or communism. By 2024, millennials will be the country’s biggest voting bloc by far. Already, notes Jim Wunderman, CEO of the powerful Bay Area Council, some tech executives are “afraid” of militants among their own employees. The demands for draconian climate policies or enforced “equity” require a more centralized, quasi-Stalinist mindset. They do have a telling point about the hypocrisy of the green-preening overlords, including celebrities who flit around on private jets, sales of which surged during the pandemic, who post half-naked vacation pictures during a lockdown winter.
The preferred face of this new socialism is of that relatively tolerant, if conformist, variety common in Northern Europe. But such restraints are culturally conditioned and rely on acceptance of the basic principles of free speech and open inquiry now rapidly being undermined in the press, academia and among the political class. Remarkably, nearly 40 percent of young Americans think the country lacks “a history to be proud of.” Far fewer place a great emphasis on family, religion, or patriotism than in previous generations. They certainly are no devotees of the Constitution. Nearly two in five millennials, notes the Pew Research Center, favor suppressing speech deemed offensive to minorities — well above the 27 percent of Gen Xers, 24 percent of boomers, and only 12 percent among the oldest cohorts, many of whom remember the fascist and communist regimes of the past.
The Europeans are, if anything, moving faster toward anathematizing their own political traditions. European millennials are almost three times as likely as their elders to believe that democracy is failing. They display far less objection to autocratic government than previous generations, who lived either under dictatorships or in their aftermath. The 2017 “Paris Statement: A Europe We Can Believe In,” put forward by a group of scholars from several European countries, says that the EU bureaucracy is invested in an “ersatz religious enterprise” based on post-nationalism and the rejection of a distinct, historical culture in favor of multiculturalism.
“Civilizations are fragile, impermanent things,” writes the historian Joseph Tainter, and ours is no exception. A society that immiserates and demoralizes its young should not be surprised that many disdain even the idea of procedure and debate; this explains such things as attacks on the US Senate’s filibuster and proposals to pack the Supreme Court, or Justin Trudeau’s effort to turn his citizen-opponents into what the former Soviet Union would call “former persons,” designated enemies without rights even to access their own bank accounts.
The real challenge for the next generation is not to eschew their aspirations but find ways to achieve them within well-established political and legal norms. After all, reformers like Clement Attlee, John Curtin, Franklin Roosevelt and Harry Truman may sometimes have skirted traditional restraints but they did not disdain their nation’s political traditions. This may be one reason why they could bring about change in a democratic fashion while the current left, deeply alienated from much of the populace, seems to favor a bureaucratically controlled future where credentialed mandarins determine the minutiae of daily life.
Lulled by our civilization’s long period of success and stability, we may not recognize that things are shifting dangerously until it’s far too late. To maintain our traditional freedoms, particularly against the rising tide of militant autocracy, epitomized by China and Russia, we need to arm the next generation with a usable past and with hope for the future. One does not have to embrace imperial policies, racism or ruthless territorial expansionism to recognize that the West also bequeathed our societies, and the world, an enormous cultural, scientific and political legacy that should not be abandoned cavalierly.
This article was originally published in The Spectator’s May 2022 World edition.