How Bad a Deal Is Social Security For Young People?

Really bad.  According to a piece appearing in the Wall Street Journal young Americans will only get back 75 cents for every dollar that they put into social security.

First, the country's existing entitlement programs are not just unaffordable, they are also profoundly unfair to those who are taking their first steps in search of opportunity. Social Security is one example. According to Social Security actuaries, the generational theft runs deep. Young people now entering the workforce will actually lose 4.2% of their total lifetime wages because of their participation in Social Security. A typical third-grader will get back (in present value terms) only 75 cents for every dollar he contributes to Social Security over his lifetime. Meanwhile, many seniors with greater means nearing retirement age will pocket a handsome profit. Health-care spending through Medicare represents an even less equitable story.

Britain Shortchanges Young People

This week's Economist points out that it is the young that are bearing the costs of austerity measures while at the same time, politicians keep making entitlement programs for the elderly sweeter.

Britons below retirement age are indeed in it together. The working-age poor are being pinched by a cap on welfare payments. Wealthy parents have been stripped of child benefit. University tuition fees have rocketed. Everyone is paying more VAT. But austerity seems much less austere if you are old. Pensioners, who fared notably well in the boom years, have been coddled in the bust.

Whereas public-sector salaries and benefits for working-age people are set to rise by a miserly 1% a year over the next few years, pensions have been “triple-locked”: they increase by average earnings, inflation (currently 2.7%) or 2.5%, whichever is higher. Perks such as free bus passes, free television licences and winter fuel payments have not been touched (although Mr Osborne is daringly pondering whether to axe fuel subsidies for Britons who have retired to sunny Spain).

This week another gift arrived. At present old people who need long-term care for conditions like dementia must pay for much of it. Some have to sell their houses and run down their savings until they are left with £23,250—at which point the state steps in. Jeremy Hunt, the health secretary, finds this intolerable. On February 11th he announced that the state will take over when people have paid £75,000 towards their own care. And nobody will be forced to sell their house.

Yes, Definitely

Nick Gillespie: State of the Union: Will Obama Tell Young People He's Screwing Them Big Time? Probably not, but they should listen up anyway.

if the proprietor of the most open and transparent and clean-smelling administration of all time wants to make some real news, he might speak honestly to the segment of the American electorate that he is screwing over six ways to Sunday: Young voters between the ages of 18 and 29. Listen up, kids! Your parents are robbing your futures blind and you're chumps enough not only to go along but to say - like the adorable title orphan in the classic baby boomer musical Oliver! - please, sir, I want some more.

Obama Screws His Base (i.e., You)

Ben Smith writes at Buzzfeed about how Obamacare shortchanges young people by forcing young people to subsidize the coast of health care for oldsters.  Smith writes:

The second is a lesser-known policy to limit the practices of charging different premiums to different ages, known as age-rating. Many states currently set a limit on this difference, often mandating that an old person shouldn't pay a premium more than five times a younger person's, even if she's expected to use more than five times as much health care. The ObamaCare provision kicking in next Jan. 1 would reduce that ratio to three-to-one, essentially limiting what the elderly pay in part by forcing young people to carry a larger share of the total cost of national health care. 

And what are young people doing about this generational theft (sound of crickets chirping)?

The near-total silence on this issue is a mark of a class that is either utterly selfless (hard to believe, honestly) or, as usual, singularly bad at seeing and defending its interests.
And so this vast transfer or resources from young to old — just the latest in a long line of these transfers — hasn't been discussed much because it is totally uncontroversial. Compare it to the footnote that has at times turned into a national obsession: Religious conservatives' objection to a provision favoring the young (and possibly saving money), the new requirement for private coverage of contraception. 

They don't call today's young people the Sucker Generation for nothing.  

College Grads Dropping Out of the Labor Force

Labor force participation in the United States has been dropping steadily since 2000.  Often times this is dismissed as a blue collar phenomena--factory jobs disappearing with nothing to take their place.  Wrong!  Data from the U.S. Bureau of Labor Statistics shows that labor force participation has been declining steadily for college degree holders as well (via Zero Hedge  ).  Indeed, there is little difference in LFP between high school (red series) and college graduates (blue series).

VDH On the Terrifying New Normal

Victor Davis Hanson has a brilliant (as usual) piece on the struggles facing young people in America today. 

Unemployment rates of those 16-24 are now officially over 50%. Even the cohort between 16 and 29 suffers from 45% unemployment. In short, in four years we have become Europeanized: young people with no jobs who are living at home and putting off marriage and child raising — a “lost” generation in “limbo,” etc. etc. They may have a car, borrow their parents’ nicer car for special occasions, watch their parents’ big screen TV, and have pocket change for a cell phone and laptop by enjoying free rent, food, and laundry, but beneath that thinning technological veneer there is really little hope that they will ever be able to maintain that lifestyle on their own in this present day and age. Meanwhile, just like some Middle East tribal society, “contacts,” “networking,” and “pull” are the new gospel, as parents rely on quid pro quos to offer their indebted, unemployed (and aging) children some sort of inside one-upmanship in the cutthroat job market.
 

This is the part that really hurts:

But these days, the game has changed somewhat — or rather been downscaled: the PhD is not being hired for anything other than part-time teaching; the JD is reduced to the law library gofer; the freshly minted MD is the equivalent of a salaried, high-paid nurse; the credentialed high-school teacher is subbing; the engineer is a draftsman; the carpenter is cobbling together home repair mini-jobs. The new plum job? Landing one of those federal or state regulatorships, inspectorships, or clerkships, which are paid for with borrowed money, produce little, and grow as those they audit and fine shrink.
 

Read the whole thing.  

Romney Ryan Polling Well With Young People

Mitt Romney and Paul Ryan are making headway in wooing young voters to the GOP.  A Zogby Poll finds that Romney now has over 40 percent of the vote among voters under the age of 30:

For the first time since he began running for president, Republican Mitt Romney has the support of over 40 percent of America's youth vote, a troubling sign for President Obama who built his 2008 victory with the overwhelming support of younger, idealistic voters.

Pollster John Zogby of JZ Analytics told Secrets Tuesday that Romney received 41 percent in his weekend poll of 1,117 likely voters, for the first time crossing the 40 percent mark. What's more, he said that Romney is the only Republican of those who competed in the primaries to score so high among 18-29 year olds.

The Zogby poll is not an anomaly.  According to a poll by CIRCLE Romney was already doing much better than McCain among young voters even before the addition of Paul Ryan to the ticket.

Peter Levine, the director of CIRCLE -- a nonpartisan group that conducts research on young Americans’ political participation -- said that Romney clearly has improved over McCain’s standing with young voters but that the Arizona senator’s campaign set a low benchmark at a time when Republican youths were particularly unengaged.

“I don’t believe the fact that Ryan is relatively young himself has that much of an appeal,” Levine said. “There’s a tendency to think young people are just into superficiality, but I tend to find they vote based on their policy views.”

In a nationwide poll conducted online and released weeks before the addition of Ryan to the GOP ticket, CIRCLE found that Obama was leading Romney by a 55 percent to 42 percent margin among 18-to-29-year-old voters.