The news reports tell us that for the last 20 years, only we...and people older and richer than we are...have made financial progress. In 1984, the median net worth of households 35 and younger was $11,500. Households of people 65 and older had over 10 times as much, $120,000.
As of 2009, the net worth of the median household under 35 had been divided in three. It was only $3,600. But the net worth of older households went up - to $170,000 - 50 times as much.
According to a chart from the Economic Policy Institute, it looks as though households of people between 35 and 55 years old also lost ground, with the 50-ish households dropping from a net worth of around $150,000 in 1989 to about $110,000 today.
Hmmm...20 years is a long time. We're not sure whether the ages apply to the people today or 20 years ago. But don't worry about it. You get the idea.
Economists explain that young people got caught in two big downdrafts. First, the dot.com bust shook out their meager investments. We older people avoided it. Probably because we couldn't understand what they were talking about.
Then came the housing bubble. Younger people were unlucky. They were trading up at the wrong time, with little equity in their houses. We, on the other hand, already had our houses, often with large unrealized capital gains and little or no mortgages left.
Many of the younger people are still - 5 years after the crack-up in subprime - underwater. Some say they are drowning.
While their assets got whacked twice, the earnings of the young and not-so-young have been hit hard too. Right after WWII, wages shot up. In the year your editor was born (1948) people were earning about 80% more - in real terms - than they had 10 years before. By the '70s these wages gains had declined sharply. But in the Carter Years our parents were still earning 50% more than they had during the Kennedy/Johnson era. In the '80s, wage gains dropped. They bounced a bit from '95 to '05, but now they're close to zero.
What's worse, young people often can't get jobs. We saw an article recently about newly graduated lawyers and MBAs who couldn't find work. These professional groups have a bad tendency towards zombyism. Still, it's a bad sign when some of the best educated young people in the country still find it hard to locate gainful employment.
If the young find jobs at all they are more likely than before to be low-wage jobs. Since 2001, the number of mid-wage jobs has fallen by more than 7%. Low wage jobs are up more than 8%.
And incomes down for practically everyone. Overall, real median incomes for American households have fallen 8%, from nearly $56,000 to barely over $51,000.
Remember what it was like in the '50s? A man could go out and earn a decent living at an ordinary job. He didn't have to be a genius. He didn't have to work 80 hours a week. He could manage a store. Or he could be a carpenter. Or a factory worker. And with his earnings alone he could afford a modest house, a normal car...and an annual vacation. Health care? He paid for it as he went along. Education? State universities were still cheap. In 1969/70, we were able to go to for a year to the University of Maryland on money we earned during a summer vacation.
We make no claim that this was the height of civilization. People were oafish then too. Houses were small. TV reception was limited. Automobiles were gas guzzlers (but at 25 cents a gallon...who cared?) Restaurant menus were dull. And wine came in bottles with straw wrapped around them.
But remember the advertising from National Bohemian...a beer "brewed on the shores of the Chesapeake Bay?" It claimed to be "from the land of pleasant living."
Economically, it was pleasant. Wages went up. Jobs were plentiful. Debt was low. Gasoline and housing were cheap.
Since then, it seems like the young have to work harder to get started in life...and then have to work harder to keep up. The typical household works two jobs - if it can find them -- racing from work to childcare. And healthcare, which used to be occasional and reasonable, has become a major burden. The annual cost of family healthcare insurance has risen to over $15,000. Childcare, too, used to a negligible expense to the typical family. Now it is a major one.
Was all this a matter of luck? Good luck for us? Bad luck for them? Not exactly. The young have been ripped off. We'll explain how tomorrow.
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.