Comforting Words for Young Workers

Many speak of Gen X and Gen Y as "lost generations" destined to "not live as well" as their parents. A new Urban Institute study finds that young people up to the age of 40 haven't accumulated as much wealth as their parents did at their age. They face a bleak economic future, breaking a pattern of generational advancement.    

The numbers may be right, but is the worry warranted? Time always will tell, but let's say this: Lots of shaky assumptions go into predicting how well today's young will live, starting with defining what it means to live well. It may be that today's young people end up living better, way better, than their parents -- and by several measures, not just money.    

The Urban Institute report focuses on one yardstick: wealth. It states that because investing and savings generate more wealth over the years, losing a decade of accumulation is especially serious.    

Several financial setbacks certainly hit young adults hard. Many bought their first homes right before real estate values collapsed. They may now owe more on their houses than the properties are worth: Their mortgages are "underwater." They may be weighed down with student debt and frustrated by stagnant wages, a phenomenon predating the Great Recession.    

Financially stressed young workers have been likened to their grandparents or great-grandparents, whose expectations fell and optimism dimmed in the Great Depression. That is not an entirely bad thing. The young people scarred by the economic calamity of the 1930s developed habits of thrift and caution that served them quite well in the post-World War II recovery -- unlike much of the baby boom generation.    

Middle-aged people traditionally save money and reduce debt for their later years. Many boomers, raised in the age of plenty, did not.    

The Center for Economic and Policy Research reported in 2009 that 30 percent of homeowners aged 45 to 54 were underwater on their mortgages. They had feasted off rising home prices. Today's struggling young people will probably be more careful.   

Also, many will have more time to make up for their youthful financial mistakes. Medical progress points to longer and healthier lives, at least for those who take care of themselves. This, like cleaner air, is one of the many marks of living well that don't easily translate into dollars.    

Today, a low-income 55-year-old suffering serious heart disease has a better medical prognosis than did a multimillionaire of the same age and condition in 1960. Who would you say has/had the better life?    

Chances are, younger Americans will also be working longer, enjoying perhaps 10 more years of wealth accumulation. (Full-time mothers concerned about losing economic ground in their child-rearing years should think about that.)    

But is working longer a step backward? Not necessarily. That would depend on what kind of work you do and the career path you follow.    

The common career pattern is illogical. Workers typically advance to the highest level of responsibility as they approach retirement age. Why can't the line be shaped like a pyramid, rather than the vapor trail of a jet taking off? One could rise in the early years, eventually hit the "top," then decelerate in terms of stress, hours and pay.    

Many of today's Americans aged 65 and far older would jump at the chance to keep working, just not as hard. Some are even starting small businesses rather than face 25 years of enforced boredom and inadequate income.    

Given the choice between more years and more money, most elderly people would choose the years. And years are what the young people have. Pessimism is clearly wasted on the young.

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