November 7, 2011

How the post 80s economic policy screwed younger people

Pew Research - Older adults have made dramatic gains relative to younger adults in their economic well being during the past quarter century, according to a new Pew Research Center analysis of data from two key U.S. Census sources.

In 2009, the median net worth (all assets minus all debts) of households headed by an adult ages 65 or older was 42% more than that of their same-aged counterparts in 1984. By contrast, the net worth of a typical household headed by an adult under the age of 35 in 2009 was 68% less than that of their same-aged counterparts in 1984.

People generally accumulate wealth as they age, so it is not unusual to find large age-based gaps on this measure. However, the current gap is unprecedented. In 1984, the age-based wealth gap had been 10:1. By 2009, it had ballooned to 47:1.

These age-based gaps widened significantly during the sour economy of recent years, but all key trends are several decades old, indicating that they are also linked to long-term demographic, social and economic changes that have affected different age groups in different ways. These changes include structural changes in the labor and housing markets; delayed marriage; delayed retirement; and the changing racial and ethnic composition of the population.

6 comments:

Anonymous said...

This isn't about left verses right.

Net worth is not an indication of the income that's come through your fingers it's an indication of your choices in what to do with that income.

The older generation often denied themselves or at least delayed the latest things and kept investing wisely while the younger generation fell for the instant gratification lifestyle that puts that XBox today ahead of being able to retire comfortably.

Just compare the savings rates of the same groups...

Anonymous said...

Stagnate wages and higher debt tend to have the effect of lowering savings.

Previous generations had the same opportunity to waste money, but at one point more opportunity to save reasonably. If money wasn't exchanging hands as frequently then why was the economy in a much better position during the 50's and 60's?

Go almost anywhere and you'll see the cost of everything is high, an Xbox isn't that unreasonable, people have the right to an expendable income.

Anonymous said...

There seems to be some conflation going on here, which is unusual for Pew.

Many older White men are doing better, but only if they did better from the beginning of their working lives.

Older women on their own, and older non-White men are not doing better.

Many US White men of the WW2 generation did very well in the aftermath of the war, when Europe and Asia were battered and poor. The wealth those men amassed is now being/has now been transferred to their heirs.

But racism and sexism guaranteed that few non-White people or White women had access to those opportunities for pelf, and thus their heirs are in the same boat they were, or one that's even smaller and leakier.

Connor said...

"This isn't about left verses right."

As soon as I saw this statement, I knew that everything else you wrote would be complete bullshit. Oh, and whaddya know, I was right!:

"The older generation often denied themselves or at least delayed the latest things and kept investing wisely while the younger generation fell for the instant gratification lifestyle that puts that XBox today ahead of being able to retire comfortably."

Uh huh...are you getting paid to shill for the wealthy? I hope so. I hope you're not just making a fool of yourself for free. Cause then you'd be a chump.

Please show me when Millennials signed up for "iPods" over "affordable college tuition and living-wage employment with health insurance coverage." Please. Show me.

radii said...

wage gains closely matched productivity gaines in the post WWII era and housing was much cheaper there was the GI Bill etc etc ... the decision was made by the globalists that with Reagan and the Republican Party in America (and later Clintonian Dems) that "free trade" would be the tool to equalize (lower in the West) all wages - pitting workers of the Third World against the First ... benefiting trans-national corporations only ... over 85s through 105s had a very different experience: we created Social Security so they wouldn't have to eat shoestring soup and live on the streets impoverished as they aged - SS has worked pretty well, eh? Reagan and the free-traders shifted us to a deficit/debt economy opportunities dried up ... time to tax the rich, raise capital gains to 35%, one-time asset charge-off of 15% of total assets on top 1%, lift the cap on what people earning over $106,000 pay into Social Security ...this would raise a couple Trillion we could energize the economy with ... then DOUBLE Social Security payouts and seek early retirement by those 60 and older - opening up jobs to their Xer and Y kids and grandkids

Anonymous said...

Oh anonymous 1, how ironic.
It's the boomers who really began the system of buying shit you can't afford and worrying about how to pay for it later.