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- Author, Katty kay
- Author's title,
It is not easy to be young today. I see it when I talk to my children and friends. Many send hundreds of employment requests and are then rejected by an algorithm. The cost of buying a house is unattainable and the cost of having a child seems even greater.
Lately, I have been remembering my time as a young adult. I graduated from the University in 1988 and got a well -paid job. The following year, I saved enough money for the entrance of my first house. Before meeting the 30, I already had my first child. When I see the experiences of today's young people, sometimes I feel that I grew up on another planet, instead of another generation.
So, who is the fault that it has become so difficult to be able to pay for life? I wonder that often. I called Kyla Scanlon to get answers.
Scanlon, 27 years old, is an American writer specialized in economics. She is the founder of the Personal Financial Education company BREAD and has accumulated a huge presence in social networks as a content creator.
In 2022, he coined the term “vibecession” to describe the state of the US economy during the presidency of Joe Biden (when many people had a negative state of mind regarding the economy). Many of their followers are young people looking for answers about their finances. His latest book is “In this economy? How do money and markets really work.”
Our conversation focused directly on how life became so disabled for young people in the United States, especially, and if there is a clear response about who to blame and what can be done to solve it.
If you are young or have one in your life, you should definitely read our conversation below.
Let's start with what seems like a kind of tension among people about how the economy is working. To be sincere: I am 60 years old. You do not have 60. I graduated from the University in 1988. I went directly from the university to a reasonably well paid job in the British public administration. At 29, I had my first child, and it wasn't something that made me think: “My God, I will never be able to allow myself this.” When I look at my children and their friends, it is almost as if they lived on another planet.
I am 27 years old and I graduated, basically, in full pandemic. What you say is very strange, and also the people I know. For the elderly population, there was a kind of equation to follow. The homes were much cheaper. Education had a more predictable profitability. Things were not so expensive.
Of course, each generation has its own challenges, but the younger generation, those under 30, currently faces an arduous battle in the property of housing, savings, labor market, inflation and a worldwide pandemic that is affecting much of youth. So I think it has been a challenge.
When you see what my generation had, you think: “What the hell? They took everything?” Were we the generation that took everything and we left you with nothing? Did we do anything deliberately to harm them?
It is a generalization: 43% of baby boomers (Those born between 1946 and 1964) have no savings for retirement. So, if I go out and say: “Oh, all baby boomersthey took all the money. “No! Some did. baby boomers They have three bedroom houses is greater than that of Millennials. And one would think that millennials have those houses because they need to have family, children and space.
All of you also faced many difficulties, but they arrived in the world at a practically perfect moment that we may never see again in history. They were very lucky. So I think we must readjust our expectations and realize that this might not be the future. We cannot blame the baby boomers for taking advantage of it.
So my generation is the anomaly? Is it only this postwar period that produced extraordinary growth, and we benefit from it, be it the generation of my parents or mine?
Yes, it is ascending mobility. Stefanie Stantcheva, from Harvard University, published an excellent research work on ascending mobility, and simply does not exist as before.
And that is the American dream: buy a house, have children, have a job and live. I think it has disappeared mainly because the economy is now suffering the consequences of the postwar boom, from which the baby boomers.
Image source, Getty Images
Was there any moment, Kyla, in which the situation began to get worse? Were there something that the political leaders did or stopped doing to exacerbate that change?
What has happened from the political point of view is that, such as baby boomers They vote and have a high political representation, end up designing policies that benefit them. It has been a cycle of decades in which those who hold power want to remain in it, and those are the incentives that are presented to them.
They will design things to achieve it. They will fight against the construction of affordable homes, because they do not want their homes to devale. They may not retire at the expected age or give up their leadership positions. They will simply stay. That creates an element of stagnation for those who try to inherit what is coming later. The baby boomers They have between 73% and 75% of the total wealth of the United States. Simply, there has not been a generational transfer.
There has also been a lot of regulation and bureaucracy, so we cannot attribute only to the baby boomers Many of the things. But if we analyze the United States and analyze GDP, we see that it is the richest country in the world and, sometimes, refuses to support its citizens. We saw a lot of support during the pandemic, such as helping people with the suspension of the payment of rent and suspension of student loan payments.
But in the United States, the life of citizens is a matter of fighting or dying. And part of this is undoubtedly due to the policies created by the older population. It does not start with the baby boomersbut it has a great impact on how people move in the economy.
Does that make you, your generation, want to disconnect from the system? Does it produce a level of cynicism that you think runs the risk of becoming permanent?
There is an expression called “financial nihilism”: basically, it is the idea that people are totally disconnected from the idea of saving for retirement. They are disconnected from progressing in their career because they do not believe there is a future for them. That is something that worries me a lot. If we lose hope, what comes later? How to make people recover it? What can we give them to have hope if the system does not provide them with the opportunities they anticipated?
David Brooks published an excellent article in the New York Times On the economy of rejection and about constant rejection -from appointment applications to universities and jobs -, the cognitive burden that entails and how it can end with any hope in people. So I worry a lot.
Image source, Getty Images
Is there any country in the world that is doing this well, or at least that is doing better, and that we can take as an example?
We can learn from all kinds of countries. The United States must really reconsider its social security network, and Europe is a relatively good example in that regard. Many countries have difficulty deciding what to do with their young people, because at the moment in developed countries the population is living many years.
Austria has done a good job in housing construction. They have social housing, but with things like that, can we simply help people make their way?
When you analyze the things that could change in terms of politics, what things would you highlight?
It is a simple answer: fix the zoning (of the cities) and the housing. You have to build homes. It is one of the only exits to this.
Another factor is child care costs. They have shot in the United States. It is very difficult to calculate how to finance it, but if we want to encourage people to have children and to continue building their lives in the United States, we have to calculate the costs of child care. Another factor is the costs of care for older people. I think, on average, the care of an older person costs about US $ 10,000 per month. It is also very difficult to calculate how to finance it.
And if we simply think about stabilizing the population, you have to give them a place to live, help them have children and then take care of those who age. Those would be the three things I would concentrate.
