Wallet Watch

Generation Y is in a perilous economic condition: by the time we enter the workforce, we’re saddled up with so much student loan debt we could be paying 15 percent of our income to service it. Incomes for workers haven’t risen since the 1970s, and our jobs are less likely to offer full health benefits and a good retirement plan. Baby boomers — and specifically conservative boomer lawmakers — have made sure that the safety net that keeps our wages, health care, and education secure has been shredded.

That’s why I think that Boomer journalists — including the writer of this Wall Street Journal piece “The Next Bailout: Your Adult Children?” — are misinformed about the economy when they portray Gen Y as “kids” whose “moms and dads will face tough questions about whether to bail [us] out.”

We’re not kids waiting for our mommies to come tend to us again. Rather, we’re workers contributing to near-record high productivity, but facing more economic uncertainty than boomers ever had to face. Some of the jobs that college prepared us for don’t exist any more, and we have fewer tools to mitigate the damage. Boomers didn’t have to deal with the predatory credit cards, mortgages, and checking accounts that we do, thanks to a de-regulated financial system, where one late payment means that my lender jacks up my rate to 30 percent. 

But based on the literature out there, this WSJ writer is indicative of how the boomers portray us:

Similar to questions about the overall economy,” many parents are wondering, “Should I bail my kid out? Or let him claw his own way, let him fail?” says Bruce McClary, a credit counselor for ClearPoint Financial Solutions, a nonprofit Richmond, Va., credit-counseling service.

…

But student-debt worries are “going through a lot of people’s minds right now,” says Robert Allen, a Downington, Pa., father of three young adults in their 20s who have all taken student loans. “Children are coming out into one of the worst job markets God ever made and lugging with them all this debt.”

Two of Mr. Allen’s three children succumbed to credit-card pitches on campus and took on $700 each in debt very quickly. After scolding the lenders — “Haven’t you credit-card people taken enough money from innocent young people already?” — the Allens made the large initial payment demanded by the credit-card vendor. Then, they required their children to step up their work hours and split remaining payments 50-50. “They have to have some skin in the game” to learn responsibility, Mr. Allen says.

…

“You can make speeches and say, ‘I’m going to let you handle this yourself and you’ll pay the consequences,” says Mr. Allen, an ex-Marine who works two jobs. But for parents who have co-signed the loans, “that’s stupid … because the minute they start taking water on their credit, you’re coming up in the gunsights” of creditors.

Not all of us are need coddling from our parents like these examples. If she interviewed a Gen Yer for her article, she might know that Gen Y is making its own financial decisions, albeit in a much more complex environment, and asking our parents for advice. And the intergenerational transfer of wealth isn’t new — what’s new is that the boomer’s policymakers have so shredded the safety net that we’re going to need our inheritance now to get by. Moreover, it’s obvious the WSJ’s audience doesn’t reflect reality. Not all of us have rich parents that can give us a “bail out.” Moreover, 20 percent of us our foreign-born, who likely aren’t used to parental largesse.

Boomers had it much better. College wasn’t nearly as expensive, and Pell Grants and other educational supports easier to find. After college, lower-skill jobs with good incomes were more readily available. Labor unions made sure that wages were tied to productivity, and that jobs came with good health care and retirement plans. Unemployment insurance was much stronger for times when you were out of work.

I realize that this post makes me sound like an angry, entitled young person. But, given that the government and the economy gives us far less support than the boomers for our education, health care, and retirement, I’m with those who say Gen Y hasn’t asked for enough. And I’m hoping someday we’ll might be able to express that to the boomers.