The Best Year to Be Born? w/ Robert Reich

If you’re a young person today – GenZ or Millennial – I'm sorry to say you've been shut out of economic opportunities that existed for many of us older geezers. No matter what “influencers” or financial gurus on TikTok tell you, no amount of “hustling” or gig work can replace a system that was once designed to help you prosper.

Millennials are deeper in debt, half as likely to own a home, and more likely to live in poverty than their parents were, despite being more educated and working more hours. How and why did that system work for many of your parents and grandparents? And why doesn’t it help you today?

I’m Robert Reich here for Good Morning, Bad News, and let’s talk about how in your lifetime, healthcare, housing, and education expenses have soared, while wage growth has stagnated. The federal minimum wage has fallen from being a living wage to a starvation wage. And if these weren’t enough, two global recessions and a pandemic have likely stunted your career at critical milestones. Let’s follow the life of people born in, say, 1957, to find out.

They grew up in the latter half of what’s known as the “Great Prosperity” – a period of relatively low income inequality and rapid economic growth. They enjoyed the benefits of huge public investments in education, housing, infrastructure, and technology – and they witnessed the growth of the largest middle class in American history. (although gains were not shared as widely as they should have been with women and people of color).

At the peak of the Great Prosperity, the top marginal tax rate on the ultra wealthy, before tax credits and deductions, was 92%. All of this painted a bright future for the middle class. But then something happened. Starting with Ronald Reagan, America took a U-turn – cutting public investments in education and health, making it harder to join a union, harder to buy a house, harder to retire, and concentrating ever more of the nation’s wealth at the very top.

Politics that fueled the middle-class’ rise were abandoned in favor of policies that lined the pockets of the ultra-wealthy. They rejected the idea that government should play much of a role in helping people at all, demanding drastic cuts in public investment, and encouraging corporate executives to crush labor unions.

The Reagan administration scaled back access to federal grants and low-cost, low-interest loans, seeding the student debt crisis we have today. Since 1980, the average cost of college has increased by a whopping 169%, while young peoples’ wages have risen only 19%. Someone born in 1957 could also afford a house. More than half of all boomers owned their homes by the time they were 30.

Today only 42% of 30-year-old millennials are homeowners, and 1-in-5 millennials has given up on the idea entirely. Boomers also typically had company pensions, with a guaranteed amount paid out each month after retirement. Millennials are lucky to have do-it-yourself pension plans that depend on how much they save and what the stock market does. Those born in 1957 reached retirement age this year. The more fortunate have seen their retirement accounts, investments, and real estate soar in value. Okay, boomer.

You were lucky to be born when you were. But it wasn’t just luck. The difference between the lives of the typical boomer and the typical millennial or GenZ is largely political. America made a series of choices that shafted average working people and shrunk the middle class. Those choices can be reversed. They must be.