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At this point, criticizing Generation Y has become a cliche. In May, Time magazine labeled them the "me me me generation" and characterized them as "lazy" and "delusional." They've been criticized for being too conservative and fundamentally indecisive. Aging rocker Ted Nugent, lamenting the lack of youth protests, said they don't impress him.
Despite the fact that most of these attacks are based on anecdotal evidence, flawed assumptions, and misrepresentations of the facts, they just won't end. Yet again, a blogger on the Huffington Post has taken aim at Generation Y, calling them "special yuppies" and arguing that their sense of unhappiness is rooted in a coddled upbringing, one where everyone was told that they were special, and delusions of grandeur were reinforced.
Generation Y pays more than their fair share
Other writers have tackled the subject, noting that Gen Y suffers from a unique set of circumstances -- a terrible job market exacerbated by the financial crisis; enormous student loan burdens brought on by out of control tuition increases.
But what no one bothers to mention is the widespread theft taking place. No doubt, there are members of Generation Y, struggling to find a job and still living with their parents, that continue to depend on the prior generation. But the majority have jobs -- millions working and supporting themselves and their families -- and they're increasingly footing the bill for the extravagant lifestyles of the members of their parents' and grandparents' generations.
Baby Boomers making out like bandits on entitlements
Primarily, the theft takes the form of government entitlement spending, where wealthy seniors feast on the hard-earned spoils of struggling Generation Y employees. In a bygone era, it may have been necessary to support older Americans -- when physical work was the norm, age was a liability, and many seniors struggled to survive.
But today, that's no longer the case. In the US, the younger you are, the more likely you are to live in poverty. As an age bracket, seniors have the lowest rates of poverty -- just 12%. Children under the age of 18 have the highest, a shocking 27%.
Seniors also have the most assets. A 2011 study by Pew Research showed that households headed by someone over the age of 65 were 47 times wealthier than households headed by someone under the age of 35 -- a dramatic increase from the 10-to-one ratio of 1984. They also spend the most -- the average 90-year old spends 135% of what the average 40-year old earns, and twice what the average 30-year old spends.
While there's a variety of possible reasons to explain these trends, one thing that cannot be ignored is the lopsided benefits older Americans have received from the government.
According to the Urban Institute, an elderly couple who turned 65 in 2010 paid about $122,000 worth of Medicare taxes throughout their life, yet, they are on pace to receive about three times that amount -- $387,000 -- in benefits. In theory, a Generation Y worker should also benefit from this system as he or she ages, but that seems increasingly unlikely. According to former hedge fund manager Stan Druckenmiller, if current trends continue, by 2050, a full 20% of US gross domestic product will be spent on providing benefits to older Americans -- clearly an unsustainable trajectory.
Today, every Generation Y worker pays Social Security taxes -- that's money that's being taken from every paycheck to cover the Social Security benefits being paid out to older Americans. Like Medicare, they should also be able to take advantage of this system down the line, and yet, it doesn't seem likely.
In fact, Generation Y workers are expected to lose money over the course of their lifetime due to their participation in Social Security -- on average, about 4.2% of every dollar they earn.
Footing the bill
Most of the writers who have chosen to attack Generation Y are probably working from a similar mental picture -- a 20-something bum, unemployed and sitting at home, living off of their parents. While that's obviously true for some, in the aggregate, the money is flowing in the other direction.
Older Americans, far wealthier than their younger compatriots, are collecting trillions of dollars worth of benefits every year. Those are benefits they didn't fully pay for, and the costs to cover them come out of the paychecks of younger workers.
All in all, younger Americans have a right to be upset -- they're footing a bill for a system from which they won't benefit.
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