Why young people are broke
There's a narrative out there that millennials and the Generation Zs behind them are lazy.
Well, that is just bunk.
The reason a lot of young people are not doing nearly as well as their parents at this stage is that they're paying huge amounts – much more than their parents ever paid, as a proportion of their paychecks, for education, higher education or student debt, housing for rent, health care, even transportation.
All of these costs have increased faster than inflation, and at the same time, jobs are not paying that much more.
One in 10 college graduates are underemployed. By underemployed, we mean they are not spending 40 hours a week doing things that are challenging and taking advantage of their education. One out of 20 is unemployed.
In the post World War II era, we have never seen anything like this. We have always expected that we're going to do better. Individuals and families are going to do better. They're going to be trading upward, and their children are expected to do better than they have done.
For the first time now, we see the pendulum moving in exactly the opposite direction. Today, your chance of getting ahead as a young person is hugely dependent on the parents you have and their income and their wealth.
Meanwhile, we are on the verge of the largest inter-generational wealth transfer in history. You've got 74 million baby boomers. They've never done so well, raking it in. This extra resource is going to be going to those small slice of Millennials and Generation Zs who have wealthy parents and grandparents.
If nothing changes, the two-tiered society we have now is going to become a chasm between the haves and the have nots.
The most important things America can do is make college free, make healthcare cheaper, and provide more affordable housing.
We cannot continue on the way we are right now.