30 somethings, a lost generation? The Urban Institute has recently put out a report, the describes the dismal state of the next generation (30 somethings). Americans in their 30s are worse off today than their counterparts three decades ago. A lost generation?
America as a whole has regained all the household wealth it lost in the 2008 economic crisis and then some, thanks to higher stock and home prices. Yet because of inflation and a rising population, the average household has recovered only about 63 percent of the wealth it lost, according to separate calculations by the Federal Reserve Bank of St. Louis. But of course all things are not equal.
30 somethings have accumulated less wealth than their parents did at that age over a quarter century ago. Their average wealth in 2010 was 7 percent below that of those in their 20s and 30s in 1983. The recent economic crisis’s impact on home values and retirement accounts, two keys to savings, certainly has played a big part in this. But the young, on average, were falling behind even before this crisis. Factors likely include their reduced job prospects, lower employment rates, and lack of educational attainment (partial due to tripling of its costs) that was higher than previous generations.
Despite their relative youth, they may not be able to make up the lost ground. If this generation can not accumulate wealth, they will be less able to support themselves when they eventually retire. This financial uncertainty could reverberate throughout the economy, since entrepreneurial activity, saving, and investment tend to build on a base of confidence and growing wealth.
The baby boomers have committed generational theft on the coming generation. Folks on the right accuse the government and social programmes. Those on the left accuse the greedy corporatism that has engulfed the economy and the government. This is basis of the ongoing political fight today. Regardless of your belief, the next generation will be the first generation in America that will do worse than the previous. This will push the world’s last remaining super power either into a state of mediocrity or toward an extremist political state – either way, there will be no stable steady growing economy – volatility will be with us for as far as the eye can see.
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