Fix My Finances

I came across this interesting article about a new book called Strapped, which is all about Generation X and Y’s financial woes.

The article (and the book) indicates that while the average income for people with college degrees has not risen much in the past thirty years, the cost of everything from homes to gas to food has risen much, much more. Acquiring debt is almost built into the system.

At the same time, though, the earning power of a high school graduate has gone down when adjusted for inflation. And the cost of college has risen so much that it is again becoming a luxury. More people are working temp jobs, and more young adults are moving back in with their parents.

In summary:

As the nation’s shift to a service-based economy accelerated, the new economy dramatically changed the way we lived and worked. Relationships between employers and employees became more tenuous, as corporations faced global competitors and quarterly bottom-line pressures from Wall Street. Increasingly, fringe benefits like health care and pension plans were only provided to well-paid workers. Wages rose quickly for educated workers and declined for those with only high school degrees, resulting in new demands for college credentials.

As most families saw their incomes stagnate or decline, they needed two full-time incomes just to stay afloat, creating new demands on working parents. Getting into the middle class now required a four-year college degree, and even that was no guarantee of the American dream.

While adults of all ages have endured the economic and social changes brought by post-industrialization, today’s young adults are the first to experience its full weight as they try to start their adult lives. But the challenges facing young adults also reflect the failure of public policy to address the changing realities of building a life in the 21st century. Government no longer has our back. As young adults today are working to get into the middle class, they’re being hit by a one-two punch: The economy no longer generates widespread opportunity, and our public policies haven’t picked up any of the slack.

The book seeks to dispel the myth that the creation of debt by this generation is just because we love to spend; the whole landscape of work and economy has changed since our parents were our age. Interesting stuff.

Sarah White wrote this on May 31st, 2006 and filed it under Budgeting, Debt, Fix My Finances |