Embracing the new lost generation
by Herbert K. Daroff, JD, CFPMr. Daroff is a Contributing Editor for Life & Health Advisor. He is affiliated with Baystate Financial Planning, and can be reached at [email protected]
AARP represents retired people. But, who represents the generation of people ages 18 to 35 who NEWSWEEK in its double issue of July 23/30, 2012 referred to as Generation Screwed? I suspect that this group has fairly low voter turnout and as a result has been on the wrong side of a great deal of recent legislation.
Therefore, I hereby propose the formation of the AEIOU:
A Association for the
E Economically challenged
I Insurance discriminated against
O Over-educated and
Starting in reverse order:
The national average unemployment is about 8%. However, for this group, that number is about 50% higher, at 12%. But, that’s the UNemployed. What number really represents UNDERemployed, the number of bartenders and parking lot attendants with college degrees? Please don’t take any exception to these occupations, but is a college degree necessary?
I know this will sound unrealistic, but if you can’t find a job, why not create a job?
There is a lot of demand out there. Our population is getting older. They need a great many personal services that are simply not provided to them. I ask this generation to think about the needs of a generation of your grandmother and grandfather. Run errands for them. Run exercise classes for them. Run any kind of classes for them.
Help my generation fix all of our computer problems. Help us determine which apps are best for our electronic devices and guide us through how to install them and use them wisely. Become tutors for your parents’ generation.
How many of this age group should never have gone to college in the first place? What is the return on investment for the cost of a college degree measured against the future earnings capacity? As a result, they are economically challenged (see below).
However, is college designed to help you make a living, or help you make a life?
David McCullough in his John Adams biography described that John’s father studied science and war, so that John could study commerce and law, so that John’s children could studies the arts. That precisely describes my father, me, and my children. Should it matter that the cost of their private college education may be a burden to them and/or their parents? I suspect that the practical answer is, “YES!”
Insurance Discriminated Against
This group is required to buy health insurance under the new rules, or incur a tax penalty. Does it make sense for this group to pay income taxes at a higher marginal tax rate?
This group may start experiencing increases in their car insurance since many companies use credit rating as part of their pricing model. If you are out of work or under employed and have substantial student loan debt, your credit rating will be adversely affected.
One of my biggest concerns for the last several decades has been the high 5-digit or low 6-digit student loan debt BEFORE they try to get married or start a family. The NEWSWEEK article cites a statistic that one-third of this age group is putting off marriage and having a baby due to their economic condition. I got married at age 22 and by age 30 we had 3 children. This year, my children will be 30 (single), 31 (just got married this year), and 34 (single).
And, the personal bankruptcy statute was changed a few years back. They cannot declare personal bankruptcy in order to get out from under these loans. This change in the personal bankruptcy law came on the heels of another change in the tax law increasing the “kiddie” tax age from 14 to 19, or 23 if still in school. Under the previous law, once a child attained age 14, their income from all sources was taxed at their own tax rate, not their parents’ (presumed to be higher) tax rate. By moving the age out further, more income is subject to higher income taxes making the cost of funding high school as well as college educations that much harder. It specifically discriminated against this age group, and especially those who continue their education. Why make it harder for them and their parents to fund college costs?
What is the possible logic of this? I guess the answer is, if you don’t vote, then we can punish you in order to cover the costs of reducing tax burdens for the wealthier taxpayers who vote.