The Parents of Generation Y Have Robbed Their Children Blind

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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  • Report this Comment On September 23, 2013, at 2:37 PM, frellmedead wrote:

    Let's not forget the fact that the baby boomers have also screwed over gen Y and others out of sheer greed, sending tens of millions of jobs overseas to boost their profit margins.

  • Report this Comment On September 23, 2013, at 3:03 PM, lilac123 wrote:

    So what are we, the working Gen Y, to do? That's what I want to know.

  • Report this Comment On September 23, 2013, at 4:07 PM, rfox1212 wrote:

    Why aren't the baby boomers entitled to collect Social Security? They paid into it their entire lives so it should be there waiting for them to use when they retire. And it would be...if our government had left it as a savings account instead of converting it to a bond account. So now...when benefits have to be paid out, instead of using the "cash" in the retirement savings account...we have to cash in a bond to a reserve that has to borrow money from other countries to pay it. Had it been left on its own to grow and mature...there would be a HUGE surplus of Social Security benefits available. But...politicians can't stand to see a large lump of money just sitting there so they had to monkey around with it...and here we are. Yet another case of a great plan with poor execution.

  • Report this Comment On September 23, 2013, at 4:09 PM, DiesMali wrote:

    I've heard quite a few Boomers complaining that Social Security is going to collapse because us Millennials aren't paying into it. Well, NO DUH. When a national average of 55% of us are under- or outright unemployed, and only 20% of college grads are finding work in their fields, how are we supposed to pay anything in to SS or Medicare? At least 60% of us make less than $18k/year, and we aren't eligible for most safety net benefits because we are mostly young and single.

    Then they turn around and blame US for being lazy. Maybe my college and work experience have been different than some, but just I don't see the "party hard and screw off at work" attitude. We can't afford to party hard, for one thing. We aren't any more lazy and entitled than previous generations, because we can't afford to be.

    I think it will be interesting to see what happens in a couple years when the majority of Boomers have to retire due to age/illness. The economy is going to be very interesting when the housing, auto, and insurance markets grind to a halt because the older generations ensured that mine would never be able to afford such luxuries.

  • Report this Comment On September 23, 2013, at 4:14 PM, TMFHousel wrote:

    <<When a national average of 55% of us are under- or outright unemployed,>>

    I'm quite curious where you came up with this figure.

    <<how are we supposed to pay anything in to SS or Medicare>>

    The record $7.1 trillion in wages Americans earned last year is a good start.

    (Americans paid a record $1 trillion in payroll taxes dedicated to SS and Medicare in the last year.)

  • Report this Comment On September 23, 2013, at 5:15 PM, Laurettas wrote:

    My husband received a statement from Social Security every year informing us of the amount that had been paid in during his working career. He had over $160,000 paid into Social Security and over $30,000 paid into Medicare by the time he retired at 53. If interest were paid on these amounts, the money we received for most of our lives on Social Security would have been from money that we ourselves contributed.

    Contrast that with the generations older than we Boomers who paid in less than $15,000 in their entire lives but have received over $200,000 in Social Security benefits.

    I agree that the younger generations are burdened tremendously with SS costs, but it is NOT the Boomers who are the main source of these costs. Had the money we paid in been set aside for our own use, we would only be using our own money in our retirement years.

  • Report this Comment On September 23, 2013, at 6:25 PM, captaintodzilla wrote:

    The government is acting like a sixteen year old kid that thinks it knows everything."If there isn't justice for the people let there be no peace for the government." Doing the same thing over and over is insane. Fix America First. Prioritize. Recycle America ,turn things around. The Government should fear the people, opposite of how it is now. the government should protect people and regulate corporations not protect corporations and regulate people. We need to Build a good foundation then rebuild. Reinstate common sense. Create Accountability and most of all treat our cancers greed , ignorance and self-entitlement. Our society runs the way it does because it is designed that way for the rich by the rich. There are many common sense simple ways to change things to make a better world to live in. Until we can prioritize correctly , have accountability , and worry about the American instead of the American dollar things will remain perverted. Anyone can find fault -- it's not a sign of anything other than moderate brain activity. It's much harder to offer creative criticism that actually improves the situation for everyone involved, UNITED we stand divided we fall...there is only one race the HUMAN RACE all the divisions of political parties and skin color have demoralized this country into a sewage plant of lying stealing ignorant greedy self-entitled hypocritical idiots the government has had too much money power and time with too little results actions speak louder than words.

  • Report this Comment On September 23, 2013, at 8:12 PM, neamakri wrote:

    The country of Chili privatized their Social Security many years ago. Everything in their economy improved after that. All we need to do is copy them...and privatize our Social Security.

    P.S. ~ each person in their system has their own retirement account, like an IRA. Each person can increase contributions if they wish, and each can retire whenever they choose. Lastly, politicians keep their hands off!

  • Report this Comment On October 01, 2013, at 12:40 AM, Hibiscusanole wrote:

    This article was written by someone in generation Y, it would seem. Now think well and hard about when computers with stock pages for you to type on and multiply your money many times. That did not happen until the 1990's. Ronald Reagan is the person you have to thank for developing the common man's deep involvement in stock.

    Now consider that the baby boomers you are maligning were trapped between their parents who lived in an era where they could support upwards of 5 children. The baby boom era left the baby boomers in a seriously reduced set of circumstances. If you are gen Y and complaining, you are likely living in a small family, while a large percentage of boomers did not feel financially secure enough to have children. We went to school in what was for some of us, an unwanted hippie era. Being non-materialistic due to a lousy economy went against our grains, or we would not be here, investing.

    Now, after inheriting the money of our parents, we can raise our heads and look forward to growing our money, can give to charity every time an investment succeeds. You have that opportunity now, as you sit here getting great stock picks and not having anyone tell you that you are an evil business person, a selfish materialist. Except, of course, Democrats. They never spent the Kruschev years fearing being bombed or having their grandparents lose all their money. So, quiet yourselves and work, invest, and vote Republican, please.

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