Does the latest generation of young people have it bad?
“Think millennials have it tough? For ‘Generation K’, life is even harsher” is a Guardian article about people age 14-21 and how bad their lives are going to be.
Let’s take this piece by piece. These folks have to share the planet with 7.125 billion others right now and perhaps 10 billion by the time that they are middle aged. It seems reasonable to assume that the average person within this generation won’t be able to consume as much of the scarce stuff, e.g., real estate, as people in previous generations. On the other hand, what if robots get good at construction? A person who is young in 2016 might be living in an incredibly swank high-rise apartment build by robots in 2050.
How about food? Produce might be lower quality due to long supply chains but there is much more variety than in the middle of the 20th century.
Transportation has been getting cheaper due to airline deregulation, especially in Europe where monopolies haven’t formed. Transportation will be a lot safer for young people because they will spend most of their lives in robot-driven cars.
How about physical security? Very few people in the 1950s had to worry about being killed or injured by Jihadis. Young people in those Western countries that have welcomed Muslim immigrants face a rapidly growing risk of being killed (“Since the beginning of the 21st century, there has been over a nine-fold increase in the number of deaths from terrorism, rising from 3,329 in 2000 to 32,685 in 2014.” — Global Terrorism Index) and the certainty of wasting a huge amount of time and money in security-related processes. Perhaps it will become impractical, except in Asia, to operate public transit and host in-person sporting events during the lifetimes of today’s young adults. On the other hand, street crime is down from its 1960s and 1970s levels. (The woman who walked around New York for 10 hours and accumulated two minutes of interesting video footage would probably have been a crime victim if she had done that during my teenage years.)
What about economics? The world is getting richer at roughly a 3.5 percent rate (IMF) while the population grows at only 1.1 percent per year (Wikipedia). Thus on average young people today should become much richer than 20th Century global citizens. [Why do we think that they are worse off? When Carrier closes a factory in the U.S. and opens one in Mexico, the headline is “2100 Americans lose jobs” not “2100 Mexicans gain jobs” (example: World Socialist Web Site).] Although young people worldwide may be better off, on average, young people in developed countries are saddled with massive debt obligations undertaken on their behalf by politicians of the 20th and early 21st Century. Absent spectacular economic growth, young people in previously rich countries will pay breathtaking amounts of tax to fund health care and pensions for former public employees who retired before today’s 14-21-year-old was born.]
In developed countries there are a lot of ways for people to earn money that didn’t exist 50 years ago. An able-bodied man, for example, couldn’t have collected welfare in 1960. Today he can get cash from SSDI, a free house from a public housing authority, food stamps, free health care, etc. He couldn’t have targeted a high-income woman for marriage-then-alimony back in 1960, but today he can. An American woman can have sex with a low-income man and, nine months later, get on the fast-track to public housing and a wide range of other benefits (see The Redistribution Recession for the enthusiasm with which young American women have responded to these incentives). An American woman can have sex with a high-income man (or series of men) and, ever since around 1990, be entitled to tax-free child support that exceeds median household income (see Real World Divorce for the eagerness with which American women have responded to these incentives). [Note that this doesn’t work in most Civil Law countries such as Germany; a woman who had sex with the richest man in Germany would earn only $6,000 per year unless she could relocate to the U.S. and obtain the jurisdiction of a U.S. court. So, as with the overall economic growth situation, it is important to look at country-by-country variations.] Americans who prefer a W-2 job but don’t want to exert themselves have a much wider range of government jobs available with much higher compensation than formerly (CATO).
People express alarm regarding the rise of the robots. But what if robots are 100X more productive than humans? If there is even a small tax on the wealth created by robots, e.g., through conventional income or consumption taxes on humans or companies that own robots, wouldn’t that then serve to completely replace current government revenue? And with a little more growth in robot production, wouldn’t a low tax rate on that production also quickly exceed all current human pre-tax income? How can people be worse off if they live in a world where a robot is always ready to build them a house, cook them dinner, etc.?
How about entertainment? A smartphone or tablet allows 24/7 entertainment at a low cost. That was unavailable at any price in most of the 20th Century. On the other hand, perhaps people socialized more and were happier on balance? And with a higher population density the average person will be less happy (example research summary).
Being healthy is better than being unhealthy. Young people have access to a lot of medical procedures and drugs that weren’t available to previous generations. Many of these seem to be harmful and/or not worth the cost (especially when you consider what else people could do with 18% of their gross paychecks). But on the other hand if you would have been dead in the old days and are alive now it is hard to see how you can be worse off. (Though actually, if you believe American juries, Hulk Hogan and Erin Andrews are worse off than dead people because, compared to the survivors of people who were killed, they were awarded more money in actual (not counting punitive) damages from publication of a sex video (Hogan) and a nude video (Andrews).)
Being educated is better than being uneducated. It was trivial for people in my generation to get into colleges that are today regarded as prestigious (MIT had a roughly 50 percent acceptance rate when I applied in 1978! Beyond perhaps picking up a sample test book for $10, nobody bothered studying for the SAT). The K-12 education system hadn’t yet been reconfigured as a welfare program for employees. On the other hand, if you wanted a college degree you had to take four years off to get it. There was no Western Governors University.
Readers: What do you think? Should we feel sorry for these 14-21-year-olds who will have to pay through the nose for our Social Security, Medicare, public employee pension obligations, etc.? Or feel envious because they will have robots doing all of their work for them?
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