Millennials and the Elderly - The American Spectator | USA News and Politics
Millennials and the Elderly

Disinherited-Washington-Betraying-Americas-Young/dp/1594038090">Disinherited: How Washington Is Betraying America’s Young
By Diana Furchtgott-Roth and Jared Meyer
(Encounter Books, 152 pages, $17.99)

Diana Furchtgott-Roth and Jared Meyer are, respectively, a senior fellow and policy analyst with the Manhattan Institute. They make a generally strong, articulate, pithy, and well-researched case in Disinherited that liberal policy makers from Washington to City Hall have been hamstringing the aspirations and bank accounts of America’s younger generations.

The general perception that millennials are the first American generation with dimmer prospects than their parents is bolstered by the authors, who point to the shock of an $18 trillion national debt, bloated by the President’s Affordable Care Act, with the bill for this record spending being handed to our young to pay.

In their “Keeping Young People Uneducated” chapters, Ms. Furchtgott-Roth and Mr. Meyer correctly point to the sadly pivotal role played by teachers’ union leaders in protecting poorly performing educators, while blocking mostly younger, more effective teachers from advancing. And in opposing expansion of charter schools, these same forces directly thwart the desperate hopes of mostly low-income parents and children for an escape from failing public schools, and a shot at effective learning.

The authors also illustrate problems created by the well-intentioned college loan program. Nearly 40 million young Americans carry student loans, and the cost of federal student grants now stands at $169 billion per year. Since 2004, the number of those owing $200,000 or more has tripled! Yet 54 percent of recent graduates are unemployed or underemployed, raising questions as to the efficacy of all that borrowing and even fields of study chosen.

High school seniors should be steered to vocational education, say Furchtgott-Roth and Meyer, as well as to “high return” fields of university study (engineering, sciences, technology) and to community colleges. Yet as the high return majors have gained in popularity, liberal arts study has declined. This has civic consequences, though, as we complain about “low information voters” and those man-in-the-street interviews where many Americans fail to identify current U.S. vice presidents by their photos or names.

Opting for community college over expensive private universities could indeed benefit more than a few students, but it will shift even more of the cost for higher education away from student families and over to already suffering taxpayers.

One illuminating chapter focuses on how overregulation and “excessive occupational licensing” thwarts the aspirations of the young, by enshrining older professionals in businesses and jobs without full free market competition. The authors suggest that “excessive occupational licensing… will affect 4 out of 10 workers,” harming not only millennials unable to break into professions, but driving up prices for services to all Americans. Who knew that some jurisdictions require licenses to become interior decorators? Louisiana licenses florists, and the “pass rate” for the florist license there is lower than the state’s bar exam pass rate! Not surprisingly, “The strictness of occupational licensing laws is correlated with the rate of young unemployment” across the U.S., say the authors. Florists, plumbers, hair stylists, and many other small business professions are honorable careers to pursue. But with nearly everyone espousing their support for entrepreneurs, how about actually unleashing young people to enter jobs and businesses that interest them and serve the public?

As someone who concurs with most of Ms. Furchtgott-Roth’s analyses and writings, I nevertheless take issue with some of this book’s suggestions that older Americans have benefitted unfairly at the expense of the young.

The authors point to the anemic job creation of the U.S. economy, but cite statistics to claim that older workers have gained more in recent years than their younger counterparts. That is not the whole story, however. During the depths of the recent great recession, older workers were dispatched and laid off in record numbers, often replaced with lower wage young people. Today, the biggest share of the long-term unemployed consists of those 55 and older.

Fewer than 25 percent of mature workers who lost jobs in 2008-09 found work within 12 months, and when older people do find re-employment, it is often at much lower salaries. If an “excessed” corporate executive can only find work as a 62-year-old Home Depot greeter, he is “re-employed,” but is that an unvarnished victory?

When I was Mayor Giuliani’s Commissioner on Aging, my staff and I expanded re-training programs for people 55 and over, creating partnerships with retail sales firms, the fast food industry, and supermarket giant Waldbaum’s. Most of our 1990s trainees were recent immigrants and low-skilled workers. Little did I imagine that in the 2015 U.S. economy, excessed white-collar workers and managers would be seeking entry into these lower-end employment fields.

The authors clearly demonstrate how high minimum wage laws contribute to youth joblessness, as the Congressional Budget Office has corroborated. That, however, is not the fault of older people. Recent large spikes in minimum wages in Seattle and San Francisco have already resulted in job losses and business closings.

Furchtgott-Roth and Meyer are on the mark in highlighting “runaway pension plans for public sector employees” as another fiscal time bomb that current and previous generations are handing to today’s and tomorrow’s taxpayers. New York City’s pension expenses ballooned by over 1,000 percent during the Bloomberg mayoralty, and annual retirement payouts in some city agencies now exceed total salary expenses. More than one-quarter of Illinois’ state budget is now devoted to pension expenses.

Pension costs are already crowding out the abilities of cities and states to repair infrastructure, hire police, and perform often basic functions of government. Without reform and reductions in future costs, young Americans (90 percent not having pension program options) will be facing significant tax hikes for the foreseeable future so they can pay for their civil service neighbors’ retirement bonanzas.

The authors, however, will lose some readers when they advance the notion that young people have been wrongly “conscripted” to pay for older Americans’ needs through Social Security and Medicare. Both programs need reform to ensure their solvency, but it should not be a shock that the young defer current gratification (income) in the hope of some future retirement benefit (Social Security, IRAs, 401[k]s, private pensions), and that all health insurance programs, public and private, experience higher utilization by the elderly than by 25 year olds. I was not alone in implicitly knowing this when, at age 24, I received my first employer-supplied health insurance benefits.

Insurance nearly always taps the resources of those whose predicted usage will not be great, to subsidize those who are more likely to utilize the insurance benefits. Homeowners near our oceans and major rivers benefit from flood insurance that is partly subsidized by people residing comfortably above sea level. Middle-aged and older drivers subsidize younger drivers who are much more likely to drive recklessly and to cause accidents. Medicare has taken its own body blows from the President’s ACA, as the authors’ Manhattan Institute colleague, Avik Roy, points out. To fund Obamacare, says Mr. Roy, Medicare will have $853 billion drained away through 2022.

Does that mean that the old have been “conscripted” to fund the health needs of the young, the poor, and other populations?

The ACA requires that everyone pay for “essential health benefits,” but most of this coverage largesse serves younger people: contraception, newborn care, and pediatric care, for example. Obamacare is clearly harming the job prospects for millennials and Gen-Xers; 64 percent of franchise managers expect that the law will have a negative effect on their business, say Furchtgott-Roth and Meyer. It certainly deserves some of the blame for the increases in those finding only part-time work, while the labor-force participation rate, now 55 percent for younger people, continues to shrink.

A leader as wise as President Reagan would see the need to convene Republicans, Democrats, and others to devise long-term reforms to save Social Security and Medicare. The larger challenge is clearly Medicare, which will consume 7 percent of our entire Gross National Product later in the century, if current trends continue.

In 1983, Ronald Reagan enlisted Democrat then-Speaker of the House Tip O’Neill and other leaders from both parties to agree on a plan to extend Social Security’s solvency into the 21st century. The system was in imminent danger of not fully meeting obligations within the decade, and the agreement was immune to potential criticism, since all parties had signed on.

One reform that President George W. Bush advanced, but which was opposed in Congress, is the idea of establishing private retirement accounts to give people more control over retirement savings, while enabling middle and even low-income people to take advantage of booming stock market returns. Perhaps “progressives” who opposed private accounts in past years might see them today as a way to address one of their pet complaints: that of “income inequality.”

Sooner or later, Medicare and its escalating costs will have to be addressed. If sooner, there is more hope that an agreement can be reasonably fair to taxpayers of all ages, beneficiaries, doctors, health care institutions, and other stakeholders. If today’s young people can visualize a Medicare program and Social Security that will be delivering for them in the 2040s, 2050s, and beyond, political support for both programs can be maintained. And reformers will be justly lionized.

In Disinherited, Diana Furchtgott-Roth and Jared Meyer make a strong case that America’s young people are being handed unprecedented public and private debt, after many suffered through inferior public education, just in time for excessive public spending, taxes, and overregulation to suppress their job and career opportunities. I simply add to these truths by noting that “progressive” overreach hurts not just the young, but the old, those in between, and nearly everyone as public spending, debt, and taxation continue to balloon while private sector job growth remains stagnant.

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