Poor Little Rich Kids (Review)

Poor Little Rich Kids
On the terrible burden of being young in the United States
Review by Kerry Howley | Reason Foundation -- "free minds and free markets" | February 27, 2005

Here's a surefire way to pitch a book idea: Take a sign of human progress—any sign—and spin out a tale of decline. The end of hunger? Try an obesity epidemic. More options on the supermarket shelf? Call that the crippling paradox of choice. That whole overpopulation thing not panning out? Start sweating the birth dearth. But if you haven't been keeping up with the progress-as-panic publishing glut, take heart: Journalist Anya Kamenetz's first book is a veritable Cliffs Notes for the entire genre. Better yet, she focuses her efforts on the biggest bummer of all: youth.

Generation Debt: Why Now Is a Terrible Time to Be Young is a long, somber journey into the "grim state" of 20-something America. Among our tour guides: John Kenneth Galbraith, Phillip Longman, and Eric Schlosser. Well-read in doomsday potboilers and wielding a formidable collection of de-contextualized stats, Kamenetz strings together a woeful tale of a generation abandoned by its government, mocked by its parents, victimized by corporate America, and generally left to rot in a zero-sum game of generational infighting.

Kamenetz, a 2002 Yale graduate, is the latest spokesperson for a paroxysm of anxiety among "emerging adults." But you don't have to accept Kamanetz's absurd thesis—that a group of people among the healthiest, wealthiest, and most educated in human history deserve your pity—to get angry about the way their prosperity has been manhandled. The term Generation Debt is nothing if not apt: Young Americans come of age in a world where heaps of their as yet-unearned cash has already been promised away. They are embodied I.O.U.s to Medicare, to Social Security, to extended obligations in foreign countries with unclear objectives and no end in sight. A glance at the latest projections for, say, Medicare Part D is fair game for some righteous anger.

There is a delicious anti-boomer screed to be written, slamming the generation that has so greedily helped itself to its children's future earnings. This, sadly, is not that book. The young people Kamenetz interviews suffer from an wide-ranging array of modern ills: They are steeped in debt and trapped in temp jobs; they start graduate programs and never finish; they are too poor to get married; they lack health care benefits and retirement plans; they feel lost and cheated. It's a messy diagnosis. Conveniently, there is a miracle cure for nearly all that ails them: a heaping spoonful of federal funding.

In Kamenetz's telling, the catalyst for Generation Debt's extended suffering is, well, debt. "Two thirds of the nation's college students are now borrowing to pay for school," we learn. The average debt for graduates of four-year colleges, says Kamenetz, is between $17,600 and $23,485. That burden obviously affects their decisions: she reports that 20 percent of these borrowers "significantly changed their career plans" and 20 percent said they would put off having children.

That initial debt sets the stage for most of the future complaints. Paying off college costs on degrees with little immediate payoff, young people feel they've been duped. You'd expect Kamenetz to cite some numbers here, because the obvious question, for young people borrowing on their future earnings, is not whether they're delaying two kids and a white picket fence, but whether the initial investment will be worth it. We never see those numbers. Here are some: According to the College Board, the average college graduate will make $1 million more over her lifetime than the average high school graduate. The profit after factoring in loan debt? $982,400.

Granted, that's an average. Many of the young men and women in the book—notably those who don't finish or who choose the philosophy major over the engineering one—won't get anywhere near there. But as Kamenetz admits, many of the people she speaks to are operating under the false assumption that a four year education is an unalloyed good. They've chosen less lucrative degrees, and are surprised by the financial consequences of that decision. For instance: Lagusta, a 27 year-old cook who has wracked up $45,000 in debt, much of it on an education she isn't using. She explains: "I was an English and women's studies major, but if I'd known I would come out with so much debt and wouldn't be making money from my degree, I wouldn't have gone."

You might think Lagusta's plight is typical of college grads with non-practical degrees, but it's not. According to the National Association of Colleges and Employers, liberal arts majors enjoyed a 13 percent increase in starting salaries between 2004 and 2005. The average starting salary for a liberal arts/general studies graduate now stands at $32,457, according to NACE, and the largest salary gains have come to holders of such legendary gut degrees as psychology and sociology.

But even if we grant for the sake of argument that liberal arts degrees are creating a generation of debt-ridden and underemployed lambkins (a problem the author addresses by offering tepid support for vocational schools), that just makes Kamenetz's policy suggestions look doubly odd. Significantly hiking Pell grants (the largest federal student grant program), lowering the expected family contribution for aid, and increasing state and federal student aid would amount to subsidizing choices already distorted by social norms, impervious to economic realities, and apparently subject to students who think a women's studies major is a ticket to untold riches.

Worse than the misdiagnosis of her generation's ills is Kamenetz's insistence that her generation is somehow worse off than those previous. "As a direct consequence of the decline in public investment of education at every level," she sighs, "young people today are actually less educated than their parents."

Her evidence here is the fact that high school graduation rates have leveled off. According to 2003 census data, 89.3 percent of adults aged 45 to 49 graduated from high school, while 86.5 percent of the population aged 25 to 29 got that far. But even as that number stagnates, the increase in numbers of students going to college is simply staggering.

Women are almost twice as likely to go to college today as they were in 1970. Kamenetz reports that graduate enrollment, excluding law, medicine, and business schools, rose a third between 1985 and 2000. "Many more people are at least trying to complete postsecondary studies," admits Kamenetz, just before launching into a paragraph on the "unhappy...new economy."

It's not at all clear when it was a better time to be young, but Kamenetz gives prolix props to "the generous days of '60s and '70s student aid" and some unidentified time period in which everyone had a job at General Motors with health benefits and a prodigious pension. Everything, it seems, is worse when compared to the way "our parents" had it when they struck out on their own. If that's the 1970s, here are some details lost in the retelling: high inflation, wage and price controls, oil prices that quadrupled between 1973 and 1974. Neither Kamenetz nor I were there, so we'll have to rely (so help us God) on David Frum, who reports in his history of the decade that "it looked and felt liked economic apocalypse."

Most of the interviewees in Generation Debt sound oddly bereft of hope, but I'd like to believe they've been edited for effect. Perhaps the brightest moment in the book is this one: When Kamenetz asked people about hopes for their respective futures, they "overwhelmingly mentioned starting their own business." That's an extraordinary expression of optimism, and it's a good perspective from which to start asking questions Kamenetz never essays. Would-be entrepreneurs might ask whether a global economy is an albatross or a blessing; whether easy access to credit is a sign of predation or progress; whether state-mandated benefits will help anyone achieve the "American dream" Kamenetz refers to but never defines. They might stop to wonder whether that dream depends more on federally funded French Poetry majors or on the economic flexibility to take a risk, fail, and try again. And they might ask which is the bigger burden: debt they incurred themselves, or debt others incurred on their behalf.

The people Kamenetz interviews lack the imaginative capacity to conceive of a hell worse than a 9-to-5 temp job paying $18 an hour. Perhaps, like bulging waistlines, such conceptual boundaries are a tolerable byproduct of a nation enjoying unprecedented wealth. But as long as we, the put-upon members of the Debt Generation, are taking this moment to air our worries, here's mine: A generation nostalgic for a past that never existed might carry us back to a place we've progressed beyond. And then we'll really have something to complain about.