Wednesday, July 19, 2006
Debt At An Early Age
At one time, freshly minted college graduates stayed at home only if they couldn't find jobs and couldn't afford to live elsewhere. Now they stay at home because they do have jobs and still can't afford to live elsewhere. Many of the jobs available to young college graduates are "temp" jobs with a limited shelf life and no benefits. Some of those who are trapped in this vocational purgatory believe they are condemned to a life of "permanent impermanence". Even if they do make a good wage, they have a vast amount of debt to pay off. The typical college graduate leaves the campus with $20,000 in unpaid student loans. If they've been in graduate school, their debt is even worse. They are forced to resort to credit cards just to make ends meet. That seems easy because credit card offers at "0% interest!" are ubiquitous. But the credit card industry is a loan-sharking racket just like any other. A large proportion of new graduates have student loans and credit card debt each in the five figures. Add to these twin burdens sky-high rents and the job insecurity so endemic to all generations of American workers, and you have millions of young people stalled indefinitely on the threshold of responsible adulthood.
According to Anya Kamenetz and Tamara Draut - the authors, respectively, of Generation Debt and Strapped - young people remain virtually indentured to their creditors well into their early thirties, enduring an anxious and provisional lifestyle that precludes marriage, much less buying a house and raising children. What is the answer? Certainly, better education on the basics of household finance is in order, starting at the high school level, if not earlier. The young should do what they can to curtail discretionary spending, and eschew credit card come-ons at all cost. But their economic problems are simply a variation of the problems that all age groups are facing. Too much money is being siphoned out of the pockets of the majority to feed the appetites of a tiny minority, and not enough opportunity exists to keep the cashflow in the black. We believe there should be more corporate taxes, laws to limit the ratio of CEO compensation to employee income, and many other reforms to put the brakes on corporate power. But who are we to criticize the high and the mighty? Aren't we all just naive and self-indulgent children who don't know how the world works?
"A Generation Weighed Down By Debt" from the Christian Science Monitor
"Beyond Their Means" from the Washington Post
"The Losing Generation" from Salon
"Generation Debt" from Blogcritics.org
"Generation Debt" from Mother Jones
Generation Debt: Why Now Is A Terrible Time To Be Young by Anya Kamenetz (at Amazon.com)
Reviews of Strapped
Strapped: Why America's 20- And 30-somethings Can't Get Ahead by Tamara Draut (at Amazon.com)