Intergenerational Inequality

Affectations!

Our society claims to be the most equal we have ever known. It is supposed that the evil and ancient monsters of racism, class barriers, and sexism have been subdued. Everyone has equal entitlements and rights protected by law, and all individuals have the right to freedom and the pursuit of happiness. During the great social upheaval after WWII, some of this became true. Unfortunately, bigotry exists in many places and in many ways. That, however, is the subject of another discussion (SOCIAL RECONSTRUCTION). Today I will reveal to you a new evil that has appeared since WWII, one that was literally born of its veterans.

Some countries require a minimum term of military service from their youth, usually two years beginning at age 18. Like these countries, North America increasingly requires its youth to engage in a term of indentured servitude in the form of service industry jobs. It is no longer possible to succeed in life in North America without starting work at age 14 or 15. Money is a necessity to our material culture, and also to advance our social standing through education. After all, not all of us have our lives paid for by mommy and daddy. The expenses of being a teenager and 20 something in North America are ever increasing, and parents are less and less willing and able to provide them. Two major expenses are vehicular transportation (as mandated by the layout of suburbia) and tuition for post-secondary education.

So when all these teens go out looking for jobs, they often find that the market is limited. Most begin at the fast food level. If they're lucky, in a few years, they can move on to some other service, like golf courses, clothing, or groceries. Many will spend 5 years or more in the service industry, attending to the needs of more fortunate generations.

As the young progress to college/university, they must continue working, often at two or three jobs in order to finance growing tuitions. Full-time jobs are scarce, as are moderate wages. The inititive and intelligence of our society's youth are wasting away in kitchens and stock rooms, serving the middle aged and their families.

Meanwhile, between 1945 and 1960 our planet experienced an explosion of population growth known as the baby boom. In 2005 these baby boomers will turn into their 60's . Throughout their lives they have had everything handed to them. The 1950's and 60's were times of unprecidented prosperity, and the middle class knew it. They demanded a slice of that prosperity for themselves and their children. A democratic mandate like this could not be ignored and political parties jumped on the chance to cater to their demands. Baby bonuses, health care, pensions, and suburban infrastructure were recklessly implemented. As the baby boomers grew up, they learned from their parents how to demand things from the government. Since they got everything they wanted, they became accustomed to these institutions and their ways. If things didn't please them, they complained and the powerful democratic process responded. By always getting their way, the baby boomers developed a CULTURE OF ENTITLEMENT. They believe they have a right to services from the government and from society no matter what the cost.

It's funny how things worked out. The baby boom is often described as a pig travelling through the snake of demographic time. Sometimes it's the pig eating the snake. In either way, they represent a massive flux in the delicate balace of Human existance. Anyways, as they grew up, social services adapted to their needs. In the 50's elementary schools were improved and became mandatory. In the 60's, highschools experienced the same legislations and funding. In the 60's universities and colleges recieved attention as well to accomodate this growing population. In the 70's jobs were readily available for the baby boomers when they got out of their nearly tuition-free post secondary, and if not there was always unemployment insurance. Of course, the baby boomers and their parents had to extend their political power to the workplace. Unions grew, entrenched, and developed interests. The funny part? Now in 2005, the baby boomers aren't in university, and don't need good entry-level jobs. They've been around the block, and they now hold all the good, high-paying jobs as well as investing their voting practices with pensions and healthcare concerns (which are the primary political motive of an aging population). So come time for their children and grandchildren to get education and a good job, well, too bad.

The aging baby boomers will demand higher pensions from the state and from corporations. Many are unfunded and in the case of the state, retroactive. This means that when this gigantic demographic collectively retires between 2010 and 2025, they will overdraw on the pension account. There simply isn't enough money to pay for them. Since healthcare is free, why not live for another 20 years, to the age of 85. So 20 years retired on the golf course, getting free hip replacements once and a while, tends to add up in social and economic costs. No state, under its current economic practices, can sustain such a massive withdrawl over such a long period of time. Companies will go bankrupt paying their retirees' pensions and health benefits as they just keep on living and withdrawing. The state will experience similar defeat, except it has two advantages over companies. It can create debt, and tax the young.

My generation and its successors will be paying for the baby boomer's excesses all our lives. Pensions often operate on a pay-as-you-go scheme, so that the currently retired are supplied from the labour of those who are currently working through taxation. Since the state pension system was implemented to immediately effect those already retired (who hadn't paid a cent into it), the program in all states has contributed to massive debt. Debt is the miracle solution to any state's problems. Simply spend the money now, and let the next generation worry about paying it off.

Then we have mediflation (the inflating costs of supplying medicare). Medicare has been getting increasingly expensive through the centuries. When professional associations for medical personnel were established in the 19th century, they acted no different than old guilds. They sought to limit the labour supply by requiring membership, enforcing strict rules regarding education, and forming alliances with government. Of course this has only caused the increase in price for medical attention. Technology has also contributed to rising costs. New machines cost money to develop and to buy. Similar to all things, as soon as a beneficial device is invented the baby boomers have demanded that they have a right to it. Our hospitals are required to own and operate all the latest expensive machinery because a large voting block says they have a right to it. More people getting older, more demand for devices and doctors, more people live longer, those people get older, repeat ad nauseum. Now the baby boomers are demanding that they have the right to free pharmaceutical drugs. Guess who's going to pay for that? No wonder doctors have become pill-pushers. With such an ignorant, hypocondriac population to deal with, I'd stop caring too.

The counterpart to mediflation is pensioneering. This is a political tool used especially before the 80's, where parties promised increased pensions to all if they were elected. Who could refuse a free ride after 65? So off to the polling stations (especially the elderly, who have nothing to do and so vote in record numbers). And that's how pensions increase. No politician will ever campaign for fiscal resonsibility regarding pensions and healthcare. That's political suicice, because the body of middle class, middle age voters (who are by far the majority) have a special interest in these two issues: they are getting older.

The baby boomers have had everything handed to them. From the womb to the tomb the state has financed their development and lifestyle. No government in history has ever given so much as modern western states do. That is because prior to 1945, debt was considered anathema and any state deficits were immediately remedied by slashing social programs and increasing taxation. A debtor nation was an outcast from the international community, and internally investors were uninterested in a state that couldn't balance its budget. With the wonderful invention of debt, modern states have been able to buy programs and infrastructure without remorse. After all, it's not the taxes of the baby boomers that will pay off our countries' debts.

Meanwhile in 2005, there's no free ride from the state for today's young. Baby bonuses have disappeared, public schools are underfunded, and tuition rates soar. Child poverty has increased in the developed world to a rediculous level. Teens and 20 somethings have to work 2 jobs or more to make ends meet and put themselves through school. They cannot look forward to a permanant, lifetime job either (which means no long-lasting pension and health benefits). There won't be any high-wage jobs for them until they themselves are 40 years old. The jobs they work now have universal commonality, a cultural reference like rock and roll or bell bottoms for the older generation. We all did it, we all put in time in the service industry. We all stood behind a counter in an ill-fitting uniform asking our parents if they want fries with that. We all have our burns and scrapes from preparing the food. We all hate the customer, who is very often not right. We all worked harder than most baby boomers ever have for minimum wage.

Then we take our miniscule savings and spend them on schooling and transportation, and that first apartment. Four years later and we have a useless peice of paper that won't get a job unless you know someone. Two more years again, another peice of paper, and maybe a decent job. Then we began our lives.

In the meantime, the fruits of our labour are extracted in regressive taxes which loosely translate into transfer payments from the young to the old. Governments take from students to finance healthcare and pensions, while taking from the middle aged to finance more healthcare and pensions. Then the near-retiring masses complain that healthcare is underfunded, but they don't want to pay for it with increased taxes.

Well here's that catch. You cannot have more and better social programs without cutting existing programs or increasing taxes. Since tax increases are anathema, governments are forced to choose which programs to cut in order to fulfill their campaign promises. Tuition funding is often one of the first to be assaulted. Clearly Human capital improvement isn't on the agenda. Nothing matters as long as health and pensions are left alone, or even increased.

This is a critical error, because the youth are the future. At the very least, the baby boomers must realize that it is today's students that will be paying for their social services. Would it not be better to have highly skilled, well-paid workers to get more tax money from? Instead, the baby boomers would prefer low-skill, low-wage workers. But how can any state support healthcare and pensions on such a weak tax base? By inhibiting higher education and good job placements, the baby boomers are only hurting themselves.

This culture of entitlement is the result of high expectations. Of course, it wasn't always this way. For those born before 1920, life was difficult (not to say those who lived through the 30's didn't have it hard). Before the 1920's you worked 12 hours a day, 6 days a week. You lived in a small apartment, you didn't own a car, and you never retired. You worked until you physically and mentally could not, and then your children would support you. You had to work hard, or you would be fired. Today, things are different. The baby boomers have lived a life of luxury compared to their grandparents. They work 8 hours a day, 5 days a week. They often own 1-2 cars and a suburban home that would be the equivalent to a 19th century estate. They don't work very hard to earn any of this. They have been freed of the responsibility for their elderly at the expense of the state, and they look to retirement as a cultural right at the age of 65. Regardless of how long they live after that, they can expect to collect a monthly paycheck without working for it. Despite having contributed to the pension system since the 60's, most baby boomers will end up collecting much more than they ever put in. This will result in further debt which will become the responsibility of their children.

So back to the beginning. Age discrimination is a real issue, but it's not the elderly who are being descriminated against. It's those who were never asked what they wanted because they were too young to speak up for themselves. After all, in most countries you have to be 18 to vote. Even then, the elderly and the middle-aged vastly outnumber the youth. These two groups are universally two-issue voters: health care and pensions, the two things that perpetuate their existance.

The whole point of the social safety net is to reduce the risks of life. The risk of incurring large unexpected medical expenses, the risk of taking care of the elderly, the risk of not working very hard, and so on. Unfortunately, expensive social programs have exposed us to new risks. Massive debts and yearly deficits have to be paid off sooner or later (likely later), while the increased lifespan and hefty pensions multiply each other to create a generation of people likely to extract money from states for decades before they die. All other programs will have to be sacrificed to pay for these two, since increased taxes and spending cuts are suicice for politicians. No one will ever campaign for fiscal responsibility.

See my upcoming STATISTICS chapter for some interesting details.

The future looks bleak for today's youth. Our only hope is that the excesses of the baby boomer diet catch up with them. All those cheeseburgers and sodas might save us all. Otherwise, it's McDonalds, Walmart, and golf courses for our youth, and a waste of such great energy and potential.

Abschied.