I MET A FRIEND of mine at a bar one day during my senior year of college. The economy had just crashed and most people in Washington were still stumbling around in a fog, trying to adjust to the new reality. Our graduation—the ceremony that would hurl us into the maw of The Real World—was only months away. All things considered, a little (cheap) drinking seemed to be in order.
The conversation turned to politics, and my friend, a fairly committed Democrat, started railing.“They tell us we’re going to get Social Security when we retire, and they’ll have the money for it. But it’s bulls—t. It’s bulls—t. Where do they think the money is coming from?”
I was startled. Anyone who paid attention knew Social Security was going to have problems… eventually…decades away, by which point surely someone would have fixed it. But the program was always presumed to be permanent. Social Security would exist as it had since the sepia-toned days of FDR. My friend’s vitriol was something I hadn’t heard before.
We all graduated in 2009—the first class to experience the full bore of the recession right out of college. And we still feel it. Young people, the Millennial Generation, were hit particularly hard. The unemployment rate for those ages 18–29 is 12.7 percent, well above the national average. One-third of Millennials are underemployed, unable to find fulltime work. The idea of a career—stable advancement in a single job or industry—is going out of fashion. Instead, work life has a by-the-seat-of-your-pants feeling. And even for those with jobs, the economy has stunted adult life. Young people are increasingly delaying marriage and putting off buying a house. After college, 6 million of us moved back with our parents.
All this has many economists wondering whether Millennials are a “lost generation,” doomed to a lower quality of life than our parents. Newsweek put it more bluntly, calling us the “Screwed Generation.”
And yet in the teeth of this economy, Millennials are also expected to fund the lavish retirements of the same generation that created the crisis. It’s an outrageous injustice—and one that’s gradually dawning on the young. Having supported big-government policies for years, Millennials are now stumbling out of bed with a hangover. It’s a shift that could affect our politics for decades to come.
Doomed to Fail
I INTERVIEWED SEVERAL YOUNG PEOPLE for this article, all of them between the ages of 24 and 27. With the exception of a Ron Paul supporter, they were all political centrists. None of them were passionate about either party. None of them worked in politics. And all of them agreed on one thing: Social Security as we know it won’t exist when they retire.
“I don’t think [Social Security] will be there in its current form,” said John, 25. “I think it will exist in some form with reduced benefits, that sort of thing. I don’t think it will really be of much support.”
That attitude matches recent polling. Half of young people aged 18–29 believe Social Security will be gone when they retire, according to a 2011 iOme Challenge survey. Of those who see the program surviving, only 5 percent think it will exist in its current form.
Young people don’t pore over every Social Security trustees’ report or monitor every unemployment rate downtick. But the abstracts speak for themselves. The Baby Boomers, all 72 million of them, are starting to retire. And Millennials, struggling just to find a job, are expected to foot the bill. When something is too top-heavy, it collapses.
Politically, the importance of this can’t be overstated. America’s youngest generation now believes that Social Security, the left’s most exalted accomplishment, is going to implode.
“In being in the middle of such an economic slowdown over such an extended period of time, obviously It has an exponentially damaging effect on Social Security. So we can’t keep going like this for too long before it does just crap out,” Monica, 26, told me.
This fear of a Great Crapping Out has many on the left panicked. The Economic Policy Institute (EPI), a think tank with such independent arbiters as Richard Trumka on its board of directors, rushed to reassure everyone that Social Security is just fine. “Young people are uninformed and therefore misinformed,” EPI declared. “They do not understand how Social Security works, who it affects, and how it fits into their future plans.”
Admittedly, economists are more likely to know the finer details of Social Security funding than barely employed Millennials. But we actually do have an understanding of how it will fit into our future plans: It won’t.
“I’m at the point in my life where I have a plan to be able to live without it, should that become the case,” Monica said. “It’s kind of like, hoping for the best, planning for the worst.”
Monica is part of a minority in that she’s even contemplating retirement at all. According to a Scottrade survey from last year, 55 percent of people ages 19 to 27 haven’t started saving for retirement, and 64 percent say they don’t think about retiring at all.
Typical is Allison, 27. She has a limited 401(k) plan through her job, and the money automatically filters in. But that’s the extent of her planning for post-65 life.
“I’m doing a little better now, but for so long, it was just like, you’d break even, you know? Your paychecks would come in and then disappear for rent, groceries, student loans, everything else. You can’t save for anything when you’re breaking even to pay the bills in front of you.”
A Fundamental Transformation
EARLIER THIS YEAR, the annual Social Security trustees’ report came out with more evidence that the program is crumbling. Initially expected to exhaust in 2036, the program’s trust fund is now expected to run dry in 2033. The Boomers began retiring in 2011, and the program was already strained. One million more people collected benefits in 2011 than in 2010.
Joe Weisenthal, a writer for Business Insider, swooped in to disarm the alarm, declaring cynical Millennials to be wrong: “If the ‘fund’ goes bankrupt in 2035 or whenever, then your Social Security check will just come out of general revenue/expenditures. No big deal. Nothing changes.”
In other words, if Social Security runs out of money, we just won’t have it be Social Security anymore. That’s not meant to sound flippant; it actually hints at an attitude that’s been held by Millennials for a long time.
Social Security was initially sold as a property right. “Beginning November 24, 1936, the United States government will set up a Social Security account for you….The checks will come to you as a right,” declared a 1936 government pamphlet. President Franklin Delano Roosevelt said the fundamental terms of the program were that contributors had a “legal, moral, and political right to collect their pensions.”
In other words, you contributed your money that was kept in an account for you and then returned to you when you reached retirement. None of that messy collectivism here! Social Security was established as individual retirement savings accounts, not a from-each-according-to-his-means glob of a welfare program.
And that’s the difference today. Young people don’t think of Social Security qua Social Security anymore. The definition has changed. Every Millennial I interviewed told me they didn’t see FICA as an investment, returned to them as theirs when they retired.
“I think of FICA as another tax that comes out of my paycheck,” John said. “I don’t really see it as mine.”
Steve, 25, expounded further. “It’s a tax because I’m not likely getting it back. It’s like a welfare transfer. Of course you want to honor the obligations of people who have paid into the system for that many years. But at the same time, it’s like, what the heck? This is not fair. And literally, if it’s a direct wealth transfer, what is this?”
Part of such feelings might be attributable to the way FICA taxes, which fund Social Security, are collected. Most employers pay half of each worker’s FICA. The half paid by the worker is extracted automatically and listed alongside more orthodox taxes like the income tax.
But the driving force behind this attitude is that young people don’t expect to Social Security to pay them much in return. So how can it be an investment? It’s a tax to fund retiring Boomers, taken from the same pot as everything else the government spends money on. In other words, it’s just another redistributive program, a far cry from FDR’s Great Idea. In identifying this, my generation has predicted its own future: having massive amounts of our wealth siphoned to fund the elderly.
Social Security Is Dead, Long Live Social Security?
STEVE, UNLIKE THE REST of my interviewees, is a libertarian and part of that most curious of Millennial movements, the Ron Paul Revolution. The Paul subculture stems from a growing skepticism of big government among young people. The Great Statist Dream—whether in the form of FDR’s New Deal, LBJ’s Great Society, or Obamanomics— came crashing down in 2008. The idea that government could fine-tune its people and businesses to achieve better results suddenly seemed foolish. The European Union, slowly burning to the ground, embodies the ultimate failure of government utopia.
The Millennials, scarred by Barack Obama’s failures, are starting to break with orthodox liberalism. Polls show young people are more skeptical of the Hope-and-Change fraud this time around. The reflexive liberalism and idealism of the young is running up against the failures of big government. Forget grand schemes; we’d just like a job.
But there’s one stumbling block Millennials haven’t cleared yet. Even though we understand Social Security’s failures, even though our generational tab is sky-high, we can’t quite abandon the idea of entitlements. Polling—and comments from many of my interviewees—shows that young people still support the core idea of Social Security and don’t want to junk it. They also don’t blame the Baby Boomers that the program lies in shambles. It’s an egalitarian fatalism. This thing exists, so we have to pay it off, even if it’s going to hurt us in the long run.
But it’s not just going to hurt us in the long run. It’s going to ruin any hope of prosperity for our generation. Even with a robust economic recovery (which is unlikely to swoop in anytime soon), how are we supposed to pay off untold trillions in entitlement debt when we can barely pay our student loans? Even if we turn Social Security into a welfare program completely, we’re just transferring the debt to the rest of the government. How can we pay that off? And yet the entitlement machine grinds on. The left, and many on the right, are unwilling to make even the smallest alterations. Among Democrats, the slightest peep of concern about Social Security is considered blasphemy.
The only hope for Social Security is if my generation, the Millennials, loudly demands change. We’re already part of the way there. We see the problem looming in the distance. But how much longer before we finally put our feet down? Young people love to talk about fairness. But when will we acknowledge the unfairness of an older generation that creates a crisis and then rides off into the sunset on our dime?
All this will happen eventually. As millions more Boomers weigh down the Social Security payrolls and the bill starts coming due, Millennials will react at the voting booth. The fact that Congressman Paul Ryan’s Path to Prosperity even exists shows that public opinion is shifting. Many of the president’s political masquerades—the War on Women, his gay marriage “conversion”—have been aimed at young people. He sees the writing on the wall. His economic policies have failed, and Millennials are feeling it.
My generation is waking up slowly, drowsily. But wake up it will. And when that happens, it could pre- cipitate the greatest ideological shift away from stat- ism in American history. But until then, we’re groping in the dark. There’s an economy for us to rebuild, a $16 trillion national debt for us to pay down, and a burgeoning student loan bubble. Who really has time to think about retirement anyway?
“I don’t think I’m really going to retire,” John said. “I think I’ll work until the day I can’t anymore, honestly, out of necessity. I don’t think [retirement] is going to exist the way it did for our grandparents.”