Millennials Really Are Suffering

As the age profile of Republican voters has risen, a certain note of complaint about young people has become a more prominent part of conservative conversation: Why are millennials so entitled and socialist? Maybe they should quit buying so much avocado toast and pay down their student loans instead. So it’s refreshing to read a book by a right-of-center author who takes the side of the generation born from 1981 through 1996. The millennials aren’t whiners, Wall Street Journal editorialist Joseph Sternberg writes in “The Theft of a Decade”: They have legitimate complaints about economic trends that have hit them particularly hard.

People in the middle of that generation reached adulthood just as the economy fell into the most severe recession since the Great Depression. That recession was followed by a disappointingly slow recovery. Sternberg notes that the effects of entering the labor force in a weak economy are not transitory: Lifetime earnings are measurably lower.

Compounding that problem, millennials also have higher levels of debt from college than their elders did. Sternberg’s discussion of that issue is thoughtful and nuanced.

Eye-popping debt loads of six figures are uncommon, he points out, and often held by people who are well-positioned to pay them off over time. His concern is rather for “students who borrowed ‘only’ $15,000 for a degree they thought would yield a higher-paying job but who either wasn’t able to complete the degree or discover they misjudged how the labor market would reward their education.” It’s an understanding of the problem that points toward a need to change our system of higher education, not just the way it is financed.

Sternberg also lays out the depressing choices that financing entitlements will entail for today’s thirtysomethings, who may have to pay higher taxes, take lower benefits in their retirement, or both. Boomers, he writes, “are imposing a miserable fiscal burden on their children.”

He is less persuasive when he attempts to fit monetary policy into his theme of baby boomer depredations against their children. His argument is that the Federal Reserve has long held interest rates too low, with doleful consequences that include raising home prices beyond what millennials can afford. But he overestimates the extent to which trends in interest rates have reflected policy choices, let alone ones made with a pro-boomer bias. Mortgage rates in the mid-2000s were lower than in the 1980s, as he says, but much of the difference disappears after accounting for inflation and risk premiums.

The low interest rates of the last decade, meanwhile, are largely a consequence of the Fed’s reasonable judgment that a depressed economy has pulled down the natural interest rate. Seeking higher rates prematurely would not necessarily have helped younger workers; it did not appear to do so when the European Central Bank tried.

You could make a better pro-millennial, anti-boomer case in roughly opposite way, arguing that the Fed held back from providing additional monetary stimulus – which would have revved up labor markets – because of excessive worries that higher inflation would erode the wealth of affluent older people.

But that still wouldn’t be a very good argument, because boomer self-interest doesn’t go very far in explaining policy mistakes. Boomers largely inherited existing entitlement programs from their own elders, for example, and their main sin has been inaction rather than an attempt to change the laws in their favor. If our society has placed too much emphasis on increasing the number of people who enroll in college – as I believe we have – it has been because of a broad social consensus that has spanned several generations.

What accounts for some of the patterns that Sternberg notices, I think, is that certain government policies – related, for example, to housing and to higher education – have yielded worse results over time as circumstances have changed. Almost by definition, the costs of this process are bound to fall disproportionately on rising generations. They’re the people whose circumstances the policies don’t fit.

If the book falls short as a prosecutor’s brief against a whole generation, that’s fine: We don’t really need one of those. But Sternberg successfully makes the case that millennials face real problems because circumstances have changed. Those problems should generate both sympathy and solutions.


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