The New Gilded Age

[noxiousdog]

Maybe the affluent 20% will drag the rest of us along to a stable new normality. That's what trickle-down economics says, anyway. I hope so because we seem to be irrevocably on that path now.

You're measuring it wrong. The people move, not the incomes.

I certainly understand that there are people that are unemployed, and underemployed. I understand you have a very unique situation yourself.

But on the aggregate and over the long term, most people that are stagnant have a spending problem, not an income problem. If they would cut their spending by 15% (and go look a the budget thread if you don't think it's possible) and save/invest it instead, they would wind up as a middle class.

But instead, on the average, budgets aren't used; money isn't saved, and we have less of a middle class.

Except for the small group of successful small business owners/partners and miniscule group of fortune 500 executives, the top 20% is made up of investors and savers. They weren't in that group in their 30s and 40s, but time and compounding puts them there. See Table 1

Every time you see someone in their 20's spend $5,000 extra dollars on a car, that's 18,000 real (not inflated) dollars they won't have 20 years later. One extra retail beer per week costs them $940 dollars 20 years later.

That's how you fix it. It's not about income. It's about capital. People know this; that's why you own instead of rent. But we don't think of consumables the same way.

[Kraken]

But on the aggregate and over the long term, most people that are stagnant have a spending problem, not an income problem. If they would cut their spending by 15% (and go look a the budget thread if you don't think it's possible) and save/invest it instead, they would wind up as a middle class.

But instead, on the average, budgets aren't used; money isn't saved, and we have less of a middle class.

The middle class doesn't drive prosperity by cutting back and saving. If staving off decline replaces real income growth, the consumer-driven economy is over.

[noxiousdog]

But on the aggregate and over the long term, most people that are stagnant have a spending problem, not an income problem. If they would cut their spending by 15% (and go look a the budget thread if you don't think it's possible) and save/invest it instead, they would wind up as a middle class.

But instead, on the average, budgets aren't used; money isn't saved, and we have less of a middle class.

The middle class doesn't drive prosperity by cutting back and saving. If staving off decline replaces real income growth, the consumer-driven economy is over.

There's plenty of room for spending a little less and saving a little more.

You're not honestly trying to tell me 401k's are ruining the country?

[LordMortis]

There's plenty of room for spending a little less and saving a little more.

You're not honestly trying to tell me 401k's are ruining the country?

Mine isn't. But if everyone else would go back to living off of their credit cards and we got rid of loan forgiveness, I would be much obliged before I move to Canada when out infrastructure collapses.

[Kraken]

The middle class doesn't drive prosperity by cutting back and saving. If staving off decline replaces real income growth, the consumer-driven economy is over.

There's plenty of room for spending a little less and saving a little more.

You're not honestly trying to tell me 401k's are ruining the country?

Of course not. Poverty amongst the elderly has been much reduced. At issue is increasing (or at the very least preserving) middle-class people's spending power in the here-and-now. Saving and investing for retirement will improve my life if I live until retirement age. Having a hefty IRA balance might technically keep me in the middle class. That's small consolation if I'm living from paycheck to paycheck right now...especially if those paychecks never get any bigger and are chronically imperiled.

[noxiousdog]

Of course not. Poverty amongst the elderly has been much reduced. At issue is increasing (or at the very least preserving) middle-class people's spending power in the here-and-now. Saving and investing for retirement will improve my life if I live until retirement age. Having a hefty IRA balance might technically keep me in the middle class. That's small consolation if I'm living from paycheck to paycheck right now...especially if those paychecks never get any bigger and are chronically imperiled.

I don't claim to know the answers for everyone. You have a unique situation, and it probably requires a unique solution.

What I do know is that if you start saving at 25, by the time you are 50 you'll be in the middle class barring certain financial catastrophes. That's the message we should be sending and we should be mitigating those catastrophes as much as possible.

Of particular evidence, consider Table 4 of this census bureau spread sheet. As you get older the distribution of net worth dramatically shifts. Just taking two columns, the percentage of people <= 0 net worth is 32% for those under 35 and 8.3% over 65. Conversely, networth of $500,000 or more rises from 2% at less than 35 to 20.6% over 65 (note: 65-69 is 24.4%).

People are moving and moving significantly through wealth bands. From the same table, I find this a very convincing argument.
Here's three wealth bands. Under 50k, 50-100k, and over 100k. The distribution is as follows:

Code: Select all

<35   75%     9%     15%
45-54 42%    11%     46%
>65   26%    10%     63%

[Kraken]

I'm focusing on current income and spending power while you're focusing on building net worth and security.

Storing wealth contributes little to current economic growth. We need a large middle class that can both spend and save. That's what we've had (with brief interruptions) since WW2 and that's what's lacking now -- especially among the aged 30-ish Millennials who should be entering their peak spending years right about now.

Their situation increasingly appears to be permanent rather than a recession-related blip. Whether you blame their upbringing or their work ethic or globalization or the education system or (as they often do, to my puzzlement) the Boomers, these are the people who aren't sustaining the middle class and aren't consuming like good Americans are supposed to do.

Slackers.

[noxiousdog]

Storing wealth contributes little to current economic growth. We need a large middle class that can both spend and save. That's what we've had (with brief interruptions) since WW2 and that's what's lacking now -- especially among the aged 30-ish Millennials who should be entering their peak spending years right about now.

You're wrong. The incomes (inflation adjusted) are the same as they've ever been. In fact, they are higher... at least twice what they were in 1945.

What we are losing is 50ish people with too much disposable income, because they didn't save in their 30s.

The data's there, you're just not looking at it. (slide Trends in Family Income - Bottom Four Quintiles and Top 5 Percent, 1947 - 2010)

[malchior]

I generally agree with what you are saying ND with regards to median earnings but I think that there is an issue that I think you may be discounting too greatly; data about wealth creation is lagging quite a bit. Plus flat growth over the last 15-20 years in median household incomes is less than awesome as well and hasn't necessarily shown up either. Anyway the results you can point to now about wealth creation reflect trends that ran from when the baby boomers really had a good run from the late 60s through their retirement.

In contrast, folks graduating over the last 10 years have a much, much dimmer outlook. They are graduating with a much higher debt load, have a far higher chance of being underemployed and lower starting wages after college. That is why we are seeing a precipitous decline in household formation. It is a leading indicator that there is something very amiss. I don't think it can be dismissed by saying they need to spend less and hope it gets better. Not saying I disagree with your larger point - I generally agree that spending by groups above recent graduates is probably out of line with good general financial practices.

[noxiousdog]

I generally agree with what you are saying ND with regards to median earnings but I think that there is an issue that I think you may be discounting too greatly that the data about wealth creation is lagging quite a bit. Though flat growth over the last 15-20 years in median household incomes is less than awesome. Anyway the results you can point to now about wealth creation reflect trends that ran from when the baby boomers really had a good run from the late 60s through their retirement.

In contrast, folks graduating over the last 10 years have a much, much dimmer outlook. They are graduating with a much high debt load, have a far higher chance of being underemployed and lower starting wages after college. That is why we are seeing a precipitous decline in household formation. It is a leading indicator that there is something very amiss. I don't think it can be dismissed by saying they need to spend less and hope it gets better. Not saying I disagree with your larger point - I generally agree that spending by groups above recent graduates is probably out of line with good general financial practices.

That's fair, though I think you overstate both school debt (why is school debt any more onerous than mortgage debt? .. why not shift to two years of Community college prior to an expensive school?) and unemployment.

I would be curious to know if household formation is due to income as opposed to a social change of marrying and child bearing not being as immediate. Those are trends that started in the 50's.

[malchior]

That's fair, though I think you overstate both school debt (why is school debt any more onerous than mortgage debt) and unemployment.

School debt is the entry fee to a *now lower wage* professional career. That debt overhang has to be cleared even before a mortgage is even possible. Think front-end/back-end ratios for instance. I think that alone has changed the game. I suspect--but don't know honestly--that Baby boomers didn't come out of school with anything near a median student loan debt load of $30k.

I would be curious to know if household formation is due to income as opposed to a social change of marrying and child bearing not being as immediate. Those are trends that started in the 50's.

It might be a factor but household formation includes a lot of those people in the data already. I think that isn't really the story there. IMO the story is that younger people are increasingly staying with their parents which is very Japan-ish and not a great trend to emulate.

[Smoove_B]

That's fair, though I think you overstate both school debt (why is school debt any more onerous than mortgage debt) and unemployment.

School debt is the entry fee to a *now lower wage* professional career. That debt overhang has to be cleared even before a mortgage is even possible. Think front-end/back-end ratios for instance. I think that alone has changed the game. I suspect--but don't know honestly--that Baby boomers didn't come out of school with anything near a median student loan debt load of $30k.

I do think that's a significant part of it. Anecdotally I know at least a dozen or so individuals that have finished an undergraduate degree and immediately started on a masters program in an effort to try and gain some type of advantage in the workforce. But now you have individuals in their mid 20s with very little (if any) practical working experience, alphabet soup after their name and a ridiculous amount of loan debt.

[LordMortis]

I do wonder what happened between 1988 and sometime after 1994. I couldn't even get a student loan until I was 24. FAFSA simply said. "Nope. Don't qualify. You're dad (a blue collar worker with five kids) makes too much money." At 24 when I got kicked off his insurance, they changed their tune and offered me a whole lot of money if I was willing to take unsubsidized loans... And of course in 95 right after I finally finished, they started going crazy with all of the tax credits. <harumph>

In 1988, 12 credit hours, in state tuition at Eastern Michigan cost about $700. In 1994, they cost about $1700. I thought that increase was crazy. I hear about costs now and I'm :jawdrop: . I have no idea what's changed. I also don't get why everyone thinks they are entitled to the top. I got accepted to the University of Michigan. FAFSA said "as long as you can afford yourself." My parents said "Good luck with that." And I said "Eastern, it is!"

The system for the last 20 years or more seems completely wonky. It perplexes me. And the people being churned through it today haven't been alive long enough to know that it's been different.

[stessier]

That's fair, though I think you overstate both school debt (why is school debt any more onerous than mortgage debt) and unemployment.

School debt is the entry fee to a *now lower wage* professional career. That debt overhang has to be cleared even before a mortgage is even possible. Think front-end/back-end ratios for instance. I think that alone has changed the game. I suspect--but don't know honestly--that Baby boomers didn't come out of school with anything near a median student loan debt load of $30k.

I do think that's a significant part of it. Anecdotally I know at least a dozen or so individuals that have finished an undergraduate degree and immediately started on a masters program in an effort to try and gain some type of advantage in the workforce. But now you have individuals in their mid 20s with very little (if any) practical working experience, alphabet soup after their name and a ridiculous amount of loan debt.

People need to be better educated about what their education is getting them. Kids need to go into college with some idea of what they will be doing when they finish. Why anyone would pay for their own Masters without ever working in the field is beyond me.

[Isgrimnur]

In the 90s, the College of Business at my college offered a 5-year fast track program that got you a Masters. I had a friend do it for MIS, and he has been rather successful. Of course, he got out in 98 and was an established commodity, whereas my bachelors coming in 2000 wasn't worth the paper it was printed on post dotcom bust.

[Kraken]

In contrast, folks graduating over the last 10 years have a much, much dimmer outlook.

That's what I've been getting at, and what nd's link doesn't address. It basically shows everybody except the rich either stagnant or in decline for the past 10+ years, which I suppose is some consolation. But I wanted to hunt down some stats specific to the younger generation -- maybe I'll have time later tonight. For now I'll just drop in this guy's blog post with a digest of (unsupported) bullet-point stats. (Ignore or enjoy the gratuitous Obama bashing as you prefer.) I omitted his less relevant points to avoid quoting in full.

* 2 Some of the largest retailers in the United States that once thrived by serving the middle class are now steadily dying. Sears and J.C. Penney are both on the verge of bankruptcy, and now we have learned that Radio Shack may be shutting down another 500 stores this year.

* 3 Real disposable income in the United States just experienced the largest year over year drop that we have seen since 1974.

* 4 Median household income in the United States has fallen for five years in a row.

* 5 The rate of homeownership in the United States has fallen for eight years in a row.

* 6 In 2008, 53% of all Americans considered themselves to be "middle class". In 2014, only 44% of all Americans consider themselves to be "middle class".

* 7 In 2008, 25% of all Americans in the 18 to 29-year-old age bracket considered themselves to be "lower class". In 2014, an astounding 49% of them do.

* 11 The average student loan debt in the United States is $32,250.

* 16 Back in 1999, 64.1% of all Americans were covered by employment-based health insurance. Today, only 54.9% of all Americans are covered by employment-based health insurance.

* 18 There are 46.5 million Americans that are living in poverty, and the poverty rate in America has been at 15% or above for 3 consecutive years. That is the first time that has happened since 1965.

* 19 While Barack Obama has been in the White House, the number of Americans on food stamps has gone from 32 million to 47 million.

* 20 While Barack Obama has been in the White House, the percentage of working age Americans that are actually working has declined from 60.6% to 58.6%.

* 22 Middle-wage jobs accounted for 60% of the jobs lost during the last recession, but they have accounted for only 22% of the jobs created since then.

* 25 According to the most recent numbers from the U.S. Census Bureau, an all-time record 49.2% of all Americans are receiving benefits from at least one government program each month.

* 27 Only 35% of all Americans say that they are better off financially than they were a year ago.


[LordMortis]

I can "meh" most of that, even if I am OUTRAGED at collective situation.

* 22 Middle-wage jobs accounted for 60% of the jobs lost during the last recession, but they have accounted for only 22% of the jobs created since then.

This is how our recovery feels to me though.

[noxiousdog]

And that kind of short term thinking is exactly what I'm talking about.

We just went through the largest recession since the 30's and you want it fixed and exceeded in 5 years? Really?

And regardless, all those measures exceed what our parents had, in most cases by a large margin.

I think that guy's blog post is old. Median income rose from 2011 to 2012, and data isn't out for 2013.

[LordMortis]

And that kind of short term thinking is exactly what I'm talking about.

But when we point to having "gotten through" the recession, it seems to be me we are not through it at all.

"But the economy is growing. We have grown for 12 straight quarters and 18 of the last 20. In fact it is bigger than it ever has been and investments are growing at unprecedented rate in this recovery. You should be ecstatic."

But if feels like and when I look around it looks some thing like "Middle-wage jobs accounted for 60% of the jobs lost during the last recession, but they have accounted for only 22% of the jobs created since then."

...

The good news is that at least jobs bring hope of jobs paying a living wage. I do see more jobs out there than I did five years ago.

[stessier]

In contrast, folks graduating over the last 10 years have a much, much dimmer outlook.

That's what I've been getting at, and what nd's link doesn't address. It basically shows everybody except the rich either stagnant or in decline for the past 10+ years, which I suppose is some consolation. But I wanted to hunt down some stats specific to the younger generation -- maybe I'll have time later tonight. For now I'll just drop in this guy's blog post with a digest of (unsupported) bullet-point stats. (Ignore or enjoy the gratuitous Obama bashing as you prefer.) I omitted his less relevant points to avoid quoting in full.

* 2 Some of the largest retailers in the United States that once thrived by serving the middle class are now steadily dying. Sears and J.C. Penney are both on the verge of bankruptcy, and now we have learned that Radio Shack may be shutting down another 500 stores this year.

That's because stores have risen to take their places. I can't believe anyone (other than employees) would shed a tear if Radio Shack disappeared.

* 5 The rate of homeownership in the United States has fallen for eight years in a row.

This is a good thing considering who was buying houses in the early to mid aughts.

* 6 In 2008, 53% of all Americans considered themselves to be "middle class". In 2014, only 44% of all Americans consider themselves to be "middle class".

* 7 In 2008, 25% of all Americans in the 18 to 29-year-old age bracket considered themselves to be "lower class". In 2014, an astounding 49% of them do.

Well that's just a silly way to conduct a poll. Keeping up with the Jones's syndrome will heavily influence the results.

* 11 The average student loan debt in the United States is $32,250.

Only $12k more than I graduated with in 1995. Not too bad considering the cost increase.

[noxiousdog]

re: short term thinking.




The slope pre and post recession look pretty close to me.

[RunningMn9]

This is a good thing considering who was buying houses in the early to mid aughts.

Middle-class folks entering their thirties with young families looking to become part of a community?

Because that's the group I was in during the early aughts when I bought my house, and the decline in home ownership has ensured that my "investment" is a financial anchor around my neck.

[noxiousdog]

This is a good thing considering who was buying houses in the early to mid aughts.

Middle-class folks entering their thirties with young families looking to become part of a community?

Because that's the group I was in during the early aughts when I bought my house, and the decline in home ownership has ensured that my "investment" is a financial anchor around my neck.

The mortgage now is the same as it was then, right?

And according to several things I just looked at, trend puts them back at 2006 peak prices within 3-4 more years.

[LordMortis]

This is a good thing considering who was buying houses in the early to mid aughts.

Middle-class folks entering their thirties with young families looking to become part of a community?

Because that's the group I was in during the early aughts when I bought my house, and the decline in home ownership has ensured that my "investment" is a financial anchor around my neck.

At least you ddn't buy in the mid aughts. Oi!

But I think Stess' point is that we kept pressing. More people need home ownership. Younger people need home ownership. People with no income need home ownership. More loans for EVERYBODY is what was going out of control in the early aughts. Lord knows they were pushing very hard to up sell me on my loan and couldn't for the life of them understand why I would take meager 1950's home for 145,000 when I was blindly pre approved for a 180,000 loan and could easily get a $250,000 loan if I actually applied for one. Of course, I still get punished. If I had bought a 250,000 home I'd have gotten a HARP loan that would have made sense or would have happily abandoned my house in 2010 or so. Instead I keep throwing money away when (literally) everyone else around me bailed precisely because I can afford it. Of course, everyone else around me had no business trying to afford $150,000 for a starter home.


And ND, you give me far too much credit. That graph means nothing to me unless you mean to tell me that people are spending more money on stuff now than they every have.

[malchior]

And according to several things I just looked at, trend puts them back at 2006 peak prices within 3-4 more years.

Depends on where you are. I just bought my house in Aug 2012 at the price the folks bought it for in 2002 and a similar house sold about 6 months ago for around the same price. But this is a NJ/NY problem as both states have a very convoluted foreclosure process and we are in the middle of our run of defaults finally. A lot of people were hanging on rent free.

[Smoove_B]

And according to several things I just looked at, trend puts them back at 2006 peak prices within 3-4 more years.

[noxiousdog]

And according to several things I just looked at, trend puts them back at 2006 peak prices within 3-4 more years.

22% below June 2006, however, prices rose 4.7% September 2012 - Sep 2013. 5.6% nov to nov.

Laugh all you want.

[noxiousdog]

It's also not a recent trend back to 2010 levels.

[noxiousdog]

And according to several things I just looked at, trend puts them back at 2006 peak prices within 3-4 more years.

Depends on where you are. I just bought my house in Aug 2012 at the price the folks bought it for in 2002 and a similar house sold about 6 months ago for around the same price. But this is a NJ/NY problem as both states have a very convoluted foreclosure process and we are in the middle of our run of defaults finally. A lot of people were hanging on rent free.

Of course. But does anyone -really- want guarantee home values only go up?

[malchior]

Not at all - just that there is definitely a belief (reasonably IMO) that as a matter of timing - a lot of people were dealt really bad hands. I'm not in that camp because I did quite well even though I haven't seen gangbusters growth. I certainly can't complain that I bought my house at the same price it was 10 years prior. Other people who bought even a few years pre-peak however could easily see it as an anchor because they don't have enough equity to move on. It isn't a one size fits all model.

[noxiousdog]

Not at all - just that there is definitely a belief (reasonably IMO) that as a matter of timing - a lot of people were dealt really bad hands. I'm not in that camp because I did quite well even though I haven't seen gangbusters growth. I certainly can't complain that I bought my house at the same price it was 10 years prior. Other people who bought even a few years pre-peak however could easily see it as an anchor because they don't have enough equity to move on. It isn't a one size fits all model.

Certainly. You didn't see me arguing with the homeowner help that was going on, nor many (let alone most) of the programs that have been extended during the recession.

But measuring this stuff in 5 year increments is ridiculous, and measuring peak to trough is ridiculous. When we get to June of 2016 and it's still awful nationally, I'll certainly re-evaluate.

[Kraken]

I forget what I was supposed to be trying to prove.

The light googling I did about Millennials mostly uncovered a raging generational culture war that was apparently touched off by a Time magazine cover story. That's a bigger nut than I want to crack. I did like this quote from a Forbes story, though: "In the survey, our sample of 150 managers provided examples of surprising questions they received from millennial-aged interviewees. To their horror, they had to address such inappropriate questions like, “Do I have to show up every day for work?” “Do you drug test – often?” “Can my Mom call you about the benefits package?”"

This Psychology Today story was one of the more balanced of the few pieces I read. This part is relevant to our discussion:

Gen Y sees what is known as the American Dream or middle class dream as less about money and more about living a fulfilling, meaningful life. When asked in the 2011 MetLife Study of the American Dream what was more important to them, 33% said “close family and friends,” compared to only 23% who said “having a roof over your head.” In the same study 66% of Gen Y said they can’t rely on government for their financial security and only 34% said they were confident they can rely on themselves to provide for their families.

...

Cliff Zukin, a Rutgers University professor and senior research fellow argues “This generation will be on the lower path of income for probably all of their life—and at least the next 10 years.” Michael Greenstone, who was the Chief Economist at the White House Council of Economic Advisors in 2009-10 says the shift to a downwardly mobile society may be lasting. As Bloomberg News reported, middle-income jobs are disappearing for young professionals. For example, the number of financial counselors and loan officers aged 25-34 has dropped 40% since 2007, and the number of hours worked by young legal associates in law firms is declining.

According to research conducted by Harvard University’s Institute of Politics:

Only 46% of Gen Y said they expect to be better off than their parents;
Nearly 45% of Gen Y classify their financial situation as “bad;”
45% of current Gen Y undergrads question their ability to stay in school because of financial difficulties.

According to The Wall Street Journal, almost 300,000 Americans with college degrees were working in minimum wage jobs, which constitutes 70% more than 10 years ago. Nearly 50% of the college graduate in the class of 2010 are working in jobs that don’t require a college degree. Recently McDonalds issued a recruitment advertisement asking for applicants to have college degrees.

If you're interested, Google "are millennials a lost generation" for other arguments for and against that proposition.

[RunningMn9]

The mortgage now is the same as it was then, right?

And according to several things I just looked at, trend puts them back at 2006 peak prices within 3-4 more years.

My mortgage isn't really the whole story though, is it. I paid $74 a month for health insurance back in 2003. I pay $616 per month now. The property taxes were $5500 per year when we bought the house. They are over $10000 now. Virtually everything is higher now than in 2003. Except my household income which is below what we were pulling in back during those "golden years".

I'm not suggesting that I am poverty stricken. But I every year, the pressure continues to build, and I have no options - I can currently afford to pay the bills but I can't afford to leave, because my house is still $100,000 below it's 2003 value.

There is a 0% chance that it will recover the $155,000 it would need to recover to the 2006 peak in the next 3-4 years. Not even the Trent Steel "NO CHANCE" reverse botch could make that happen.

[noxiousdog]

I feel for the situation you're in. I have no doubt there are plenty of stories just like yours.

But at the same time, those are data points. Even in a short time frame it's not a majority situation, let alone an entire business cycle.

Even if we accepted that it's the "new normal" what would you do about it? Price control housing? I don't even think the most liberal guy on these boards would do that.

[RunningMn9]

Even if we accepted that it's the "new normal" what would you do about it? Price control housing? I don't even think the most liberal guy on these boards would do that.

I don't know that I'd do anything about it. Big ups to to whoever modified the HARP program to allow people that were under water on their mortgage, but who hadn't missed any payments, to refi to a better rate. That saved me almost $400 a month, and improved my monthly cash flow.

[Zarathud]

The American dream promised that work paid off, you received a fair deal and could build a secure future with education. But Baby Boomers changed the game, ate the cake and mortgaged the future. Now they expect Millennials to keep keep chasing the same dream when it's clear that hard work is much less likely to provide the same rewards. The Millennials know their security system isn't from relentlessly pursuing work -- it's from the network of family and friends.

Even when they can get jobs, there's no future in it. It's clear that technology and work environments no longer value the middle-tier jobs with a decent living wage. The best you can hope for is to find and keep your job in the next wave of downsizing. And finding a job even seems to be difficult with the internet job aggregation system. Why is anyone surprised that this affects the motivation of the younger workforce?

[Kraken]

I didn't get cake. But I hear that there might soon be cake for everyone. Or cupcakes, anyway.

...as technology, outsourcing, and other structural shifts transform our economy, it’s becoming increasingly clear that national prosperity does not necessarily mean there are enough good jobs for everyone who needs one.

In that light, the viability of a solution like the guaranteed basic income—and whether it can be made palatable to Americans for whom work ethic is a prized national value—ends up coming down less to politics than to the fundamental question of how we see the role of work both in the lives of individuals and in society as a whole.

...

In 2014, APPROACHING FIVE YEARS after the Great Recession technically ended, the problems the basic income scheme was supposed to solve in the ’70s have returned to the forefront: America’s gross domestic product is ticking up, and the stock market is booming—but millions of people are persistently, unfixably unemployed. As MIT professors Erik Brynjolfsson and Andrew McAfee argue in their new book, “The Second Machine Age,” this will get even more extreme with time, as computers get better at doing jobs long reserved for people.

Between those shifts, and the mounting size of the safety net—add the ballooning cost of Medicare and Social Security to the government programs of the ’70s—some thinkers now believe we need to do more than wait out the post-recession hangover: Instead, we need a wholesale rethinking of government benefits.

[noxiousdog]

The American dream promised that work paid off, you received a fair deal and could build a secure future with education.

Any one under forty, at a minimum, has not put in hard work, so I honestly couldn't care less about the millenials at this time.

[Isgrimnur]

Hard work =/= long work. There are plenty of people younger than we are busting their tails to bring you the next generation of technological advances, out there building your infrastructure, and doing plenty of hard work.

[noxiousdog]

Hard work =/= long work. There are plenty of people younger than we are busting their tails to bring you the next generation of technological advances, out there building your infrastructure, and doing plenty of hard work.

Well, too bad. If someone promised you middle class on 10 years of "hard work" they were lying.

There's no way to make the math work, unless you want to go 25 years without a raise.

If you expect everyone with a college degree and 10 years experience to make 60K by forty, how much do you plan on paying sixty year olds?