Show Me the Generation Me

As a colleague of mine here at SDSU regularly reminds us, Generation Me is usually thought of as referring to people born in the 1970s, 80s, and 90s, and among their key characteristics is a concern for themselves, perhaps at the expense of others. David Frum, however, a columnist and novelist, has implicitly called the elderly to task for this same set of attitudes. In essence, he is blaming the older American population for the problems that younger people are having finding a job and getting ahead in life.

In 2011 Wisconsin Congressman Paul Ryan proposed a plan to balance the U.S. federal budget over the next two decades. House Republicans adopted a version of the plan as their budget, and it has since been (nervously) endorsed by Republican presidential nominee Mitt Romney.

The essence of the plan? A gigantic off-loading of budget pain from old to young. Medicare and Social Security will be protected exactly as they are for Americans now over age 55. Younger Americans, on the other hand, will find Medicare progressively less generous, with the heaviest burden of adjustment falling on the youngest of all.

In the past, such pay-it-forward economics could be justified on the premise that—thanks to economic growth—the next generation would be richer than its predecessors. But that assumption has been breaking down as the benefits of economic growth have been claimed by fewer and fewer Americans. Virtually all of the productivity gains since 1979 have flowed to the top 1 percent of income earners. As a result, today’s 20-somethings face a future in which most of them may well fail to attain the living standards of their parents.

Is it fair to blame the older population for the economic straits of the young? Not really. What is conspicuously missing from Frum's discussion is the role played by population growth in the rest of the world. Young people in America and Europe no longer have access to well-paying manufacturing jobs because those jobs are in less developed countries (China's economy is big because of this, but the average worker in China is vastly less well off than workers in America or Europe). At the same time, we have to remember that if everything we consumed was manufactured in the rich countries by well-paid workers, we could afford a lot less stuff. In essence, our standard of living would be considerably lower. So, the aging of the populations in rich countries is a problem, to be sure, but let's not blame that on the older population itself.