Meet the Millennials: liberal, diverse, tolerant, narcissistic, coddled, respectful, confident, and broke.

Everybody has an opinion about Millennials, mostly informed by media bloviators. According to this book, we’re (those born between 1980 and 2000) inexplicably overconfident in our prospects for the future. The author’s explanation is that our parents coddled us, but I think an unmentioned source of that confidence is the gilded age we live in. Credit is easily obtainable, meaning we can pay for extravagant lifestyles  and educations later. Shiny, sleek technology distracts our attention from the crumbling infrastructure, the pot holed inner city streets and sidewalks. Uneven expectations are a given when everyone has a supercomputer in their pocket and the entire world is easily accessible with the touch of a button (24% of Millennials say that ‘Technology use’ is the number one unique distinction of their generation).

That said, the point of the book is to explore generational differences in America. There’s not enough money to go around. Nobody has made a decision on how to keep promises to the elderly without bankrupting the youth.

Among the topics discussed: Older people are working longer which means there’s less room for younger people in the workforce. Marriage is getting rarer, especially among poorer populations. College tuition is at all all-time high, and will continue to get more expensive. People are living long than ever. Fewer babies are being born. And either the young will have to accept a tax increase to pay for the retirement of the old, or the old will have to take a benefits cut. At this rate, were robbing from the future to pay for the present.

Quotes and Anecdotes: Marriage As A Status Symbol and The Basics of American Demography.
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Highlights
The only forecasts I’ll venture in this book will be about the future we already know—the parts baked in by the demographics and the data. Mostly my aim is to be a tour guide who explains how our nation got from the middle of last century to the present, then provides some insights about what this breathtaking journey tells us about the changes yet to come.

We know, of course, that numbers aren’t omniscient. And we’re aware that public opinion surveys, in particular, can sometimes convey a false certitude that disguises ambiguities of heart, soul, and mind. If you ask Americans whether they favor more assistance to the poor, 65% will say yes. If you ask them whether they favor more spending on welfare, just 25% will say yes. Which finding is “true”? Probably both.

As a people, we’re growing older, more unequal, more diverse, more mixed race, more digitally linked, more tolerant, less married, less fertile, less religious, less mobile, and less confident.

Some of these changes are for the better, some for the worse—and some people no doubt will differ over which is which. Most are mutually reinforcing. And all, in one way or another, will have an impact on the immense national challenge that’s the central focus of this book: namely, as our population ages, how do we keep our promises to the old without bankrupting the young and starving the future?

Many of the young are big government liberals; most of the old are small government conservatives (but hands off my Social Security and Medicare!). The young are comfortable with the dizzying array of new lifestyles, family forms, and technologies that have made the start of the twenty-first century such a distinctive moment in human history; the old for the most part are disoriented by them. The young are the least religiously connected generation in modern American history; the old are the most devout believers in the industrialized world. The young have been starting their working and taxpaying lives in the worst economy since the Great Depression; the old are finishing theirs off having run up $17 trillion in government IOUs that their children and grandchildren will spend their lives paying off.

The fundamentals of our demography are these: in 2014, about 4 million Americans will be born, roughly 1 million will arrive as immigrants, and about 2.5 million will die.

One way for nations to prevent the economic sclerosis that can occur when their populations age is to replenish their workforce with immigrants. In this realm, the US boasts the world’s most enviable demographics. The great wave of immigrants to the US which began when Congress reopened America’s doors in 1965, is now more than 40 million strong. Based on current mortality-fertility-immigrant trends, roughly 90% of the growth in the Us labor force between now and mid-century will be from new immigrants and their children. Immigration waves always produce political and cultural backlashes; this one has been no exception, especially since more than a quarter of the modern-era immigrants are living here illegally. As columnist Fred Barnes has written, we have a history of hating immigrants before we love them. But no nation has been better served than ours by immigration, and judging by the tens of millions of people from all over the world still clambering to come here, there’s every reason to expect our long winning streak to continue.

In 1960, 72% of all adults ages 18 and older were married; by 2011, just 51% were. In the old days, people in all social classes married at roughly the same rate; today marriage is much less prevalent at the bottom than the top. Pew Research surveys find that adults on the lower rungs are as just likely as others to say they want to marry, but they place a higher premium than others on economic security as a precondition for marriage—a threshold they themselves are unable to cross. These attitudes are self-fulfilling. Marriage brings economies of scale and a heightened commitment to financial responsibility, which means that the growing marriage deficit among poorer adults both reflects and reinforces their growing income inequalities.

Societies with fewer young people tend to have less energy, dynamism, and innovation. Societies dominated by the old risk becoming sclerotic. The old require the care of the young. If fewer people form families to play that role, then governments will need to fill more of the gap—but this is a burden they already struggle to bear.

The Millennials’ two seemingly incompatible characteristics—their slow walk to adulthood and their unshaken confidence in the future—are their most distinctive traits. Despite inheriting the worst economy since the Great Depression, despite rates of youth un- and underemployment that are the highest since the government began keeping such records, despite the growing albatross of student loan debt, and despite not being able to think about starting a family of their own, Millennials are America’s most stubborn optimists. They have a self-confidence born of coddling parents and everyone-gets-a-trophy coaches. They have a look-at-me elan that comes from being humankind’s first generation of digital natives (before them, nobody knew that the whole world wanted to see your funny cat photos). And they have the invincibility of youth. For all those reasons, Millennials are far more bullish than their better-off elders about their financial future. Even as they struggle to find jobs and launch careers, even as 4 in 10 describe themselves as being in the lower or lower middle classes (a higher share than any other generation), nearly 9 in 10 say they already have or one day will have enough money to meet their financial needs. No other generation is nearly as optimistic.

All of these challenges will be exacerbated once the nation has to start coping with the full cost of retirement of 76 million Boomers. The oldest turned 65 in 2011. By the time the youngest cross that threshold in 2030, America’s age pyramid will take on a shape it has never had before. About 1 in 5 Americans will be 65 or older, up from 1 in 7 now. The number of retirees on Social Security and Medicare will rise to about 80 million by 2030, roughly double the figure in 2000. Among them, the fastest growing cohort will be the “old-old.” The number of seniors age 85 and older is expected to more than triple between now and 2050, to 19 million. Fewer workers supporting more of the old and old-old isn’t much of a formula for economic growth, standard of living gains, or social comity. “It’s like a seesaw—if one side is up, the other side has to be down,” says Andrew Biggs, a former deputy commissioner of the Social Security Administration, of the challenge of preserving a safety net for the old without bankrupting the young. “Nobody wants to do the actual things you have to do so you don’t screw your kids on this stuff.”

Boomers are by no means the only guilty parties. But this generation, more than any other in American history, has passed through its economically active years not paying the full tab for the goods and services it has asked for and gotten from the government. Its children and grandchildren have been left holding the bill.

Meet the Millennials: liberal, diverse, tolerant, narcissistic, coddled, respectful, confident, and broke.

Generation gaps are hardly a novelty. Nearly two centuries ago Alexis de Tocqueville marveled that in America “each generation is a new people.”

More often than the younger generations, Silents take the American exceptionalist view that the United States is the greatest nation in the world. But fewer older people than young people think that “America’s best days are ahead of us.”

Over the course of several decades, a rising share of Boomers have come to call themselves conservatives, and a majority now favor a smaller government that provides fewer services. When they were in their 20s and 30s, most Boomers preferred big government.  On most social issues, their opinions generally fall between those of the Silents and the younger age cohorts. And many Boomers express reservations about the changing face of America.

Among older adults, there is a tension between their belief that America is the greatest country in the world and a sense of pessimism about the country’s future. Younger adults are less convinced of America’s greatness but more comfortable with the path the country is on.

“Older Americans do not intend to ruin America, but as a group, that’s what they’re about,” writes veteran economic columnist Robert Samuelson, who over many decades has chronicled the way older Americans have used their political clout to grab a growing share of government largesse. Absent changes to current law, more than hald of the federal budget will go to Social Security, Medicare, and the non-child portion of Medicaid by 2022, up from 11% in 1960 and 30% in 1990, according to an Urban Institute study. The federal government now spends nearly $7 per capita on programs for seniors for every $1 it spends per capita on programs for children. But even as spending priorities have migrated toward the top of the age pyramid, economic need has settled toward the bottom. In 1967, just as the oldest of the Baby Boomers were making their way into the workforce, the poverty rate was nearly three times higher among households headed by an adult age 65 or older than among households headed bu an adult below the age of 35 (33% versus 12%). Since then, the ratio has flipped. Today poverty is twice as high among the young as the old (22% versus 11%). The reduction in elderly poverty is largely the handiwork of Social Security and Medicare, and stands as one of the great triumphs of public policy. The benefits of those programs flow to all generations of Americans. But they won’t be sustainable unless today’s young have the same chance their parents and grandparents did to lead economically productive lives.

In recent years a smaller share of young adults has been employed than at any time since the Bureau of Labor Statistics started tracking such trends in 1948. So it’s not surprising that this generation of youthful protesters has a different focus for their grievances: the economy, stupid. But notice the targets they’ve chosen to demonize. It’s all about class, not age. It’s 1% versus 99%, not young versus old. Occupy Wall Street, not Occupy Leisure World.

According to sociologist Peter Uhlenberg, it’s more likely today that a 20-year-old has a living grandmother than it was in 1900 for a 20-year-old to have a living mother.

Then, of course, there’s the biggest intergenerational family transfer of all—inheritance—which happens when the benefactors are no longer around to take pleasure in the gift of giving. A 2010 study by the Center for Retirement Research at Boston College estimated that Boomers had already inherited a $2.4 trillion from their Greatest Generation parents and are in line to eventually take in an additional $6 trillion. And a 2012 report from Accenture calculated that the Boomers themselves, once they go on to their greater rewards, will be in a position to pass along up to $30 trillion to their children and grandchildren.

Those are eye-popping numbers, but they come with equally big qualifiers. The distribution of inheritance is highly skewed toward folks at the upper end of the income and wealth curve. The typical Boomer will receive an inheritance of $64,000, not exactly a ticket to financial paradise. The timing of the receipt is always uncertain; often the money arrives too late to change one’s life course. And once you take into account the long-term increases in the cost of living, the gigantic numbers become less impressive.

Meantime, Boomers are the most “sandwiched” generation in human history—more likely than any previous cohort in its middle age to have (and be supporting or caring for, in some capacity) parents as well as children. Indeed, demographers have a new coinage—“club sandwich”—to evoke the four generations of family members that Boomers find themselves helping. It’s one of the reasons they are staying active in the workforce for an average of three of four years longer than their parents did. And that, in turn, may be one of the reasons Boomerangers are having so much trouble finding jobs and starting careers.

Russia is already experiencing the steepest population decline of any major country since the fourteenth century’s bubonic plague.

But life kept getting in the way—a costly divorce; college tuition for the kids; her daughter’s wedding; unexpected medical bills.

“Basing a retirement system on people’s voluntarily saving for 40 years and evaluating the relevant information for sound investment choices is like asking the family pet to dance on two legs,” writes Teresa Ghilarducci, an economics professor and retirement policy expert at the New School for Social Research. “First, figure out when you or your spouse will be laid off or be too sick to work. Second, figure out when you will die. Third, understand you need to save 7% of every dollar you earn. Fourth, earn at least 3% above inflation on your investments. Fifth, do not withdraw any funds when you lose your job, have a health problem, get divorced, buy a house or send a kid to college. Sixth, time your retirement account withdrawals so the last cent is spent on the day you die.”

Consumer spending drives between 60% and 70% if the US economy, and one reason the recovery has been so sluggish is that so few Millennials are able or inclined to open their wallets. Their low levels of income and wealth and high rates of student debt are likely to put a damper on their economic fortunes for decades to come. They’re also facing trillions of dollars in taxes or foregone government goods and services, or both, to pay off the public debt bequeathed to them by their elders. And they’ll spend trillions more to finance the entitlement programs for those same parents and grandparents in their old age.

Since 2009, though, Asians have surpassed Hispanics in new arrivals.

Our twentieth-century metaphor was “melting pot.” Our twenty-first-century metaphor, in a much more racially and ethnically diverse nation, in “mosaic.” Each piece contributes to a whole, but not by losing its distinctiveness.

Tallying up their costs and benefits to society is a complex and subjective exercise. Arguably the greatest harm they do is the illegal way they came to the country—which undermines the rule of law that helps make the US a magnet for immigrants in the first place and is unfair to all who wait their turn to come legally. Once they get here, they tend to be more law-abiding than other Americans becasue they know any brush with the law could result in deportation. As for their economic impact, it’s uneven. Most studies suggest that they depress wages (but only marginally) for the unskilled laborers with whom they directly compete, but raise wages for skilled laborers who benefit from the increased economic activity and productivity associated with their presence in the labor force. For consumers, they’re a blessing, as they lower the cost of everything from food to housing to medical care to personal services. They’re a net burden on state and local governments, which by law are obligated to educate their children and provide free health care to their indigent. But they’re a net benefit to the federal government, mainly because many wind up paying into the Social Security system (up to $15 billion a year, by one estimate) without ever receiving the benefits from it.

Asian Americans make up less that 6% of the population, but in 2010 collected 45% of all engineering doctorates and 38% of all math and computer science PhDs.

Obama was born in Hawaii, America’s most Technicolor state, where the word “hapa” (half or part) is meant to describe someone of mixed Asian heritage, but colloquially has come to mean a mixed-race person of any kind—a “mutt” as Obama sometimes calls himself.

Obviously we haven’t become a “postracial” society; human beings don’t seem to be wired that way. But there are fewer out-and-out bigots than there once were.

Marriage has always been associated with positive economic outcomes—not just because it’s an efficient way to allocate and combine labor (yes, two can live more cheaply than one), but because the marital commitment itself tends to promote values and behaviors associated with economic success—constancy, responsibility, perseverance, an inclination for pragmatic compromise. On top of that, our tax laws provide lots of benefits to married couples.

Pew Research surveys often begin by asking respondents, “Generally, how would you say things are these days in your life—would you say you are very happy, pretty happy, or not too happy?” In the survey profession, this is known as a door-opener question; its main goal is to get respondents comfortable with doing an interview.

In 2011, 41% of all births in the US were to unmarried mothers, up from just 5% in 1960.

A half century ago, only 2.8% of adults older than age 50 were divorced; by 2011, that share had risen to 15.4%. For the first time in history, more Americans ages 50 and older are divorced than widowed (13.5%)

Back then, according to Pew Research surveys, just a third of adults supported same-sex marriage. Now half do. There’s still a big generation gap on this issue, with 70% of Millennials favoring the legalization of same-sex marriage, compared with just 31% of Silents. George Will among others has stressed the generational replacement component of the shift in public attitudes. “Quite literally the opposition to gay marriage is dying,” he noted on ABC’s This Week in 2012. But along with the demographic dynamics, support has been growing among all age groups.

What has caused the change? Our surveys show that it has little or nothing to do with new attitudes about marriage and everything to do with new attitudes about gays. Among supporters of same-sex marriage in 2013, fully 28% said they were once opponents. Asked why they changed their minds, no one cited changing attitudes about marriage. Instead, the most common response was that familiarity had led to acceptance.

Some 44% of American adults have a different religious affiliation from the one they were raised in, and an additional 9% left their childhood religion at some point in their lives but have since returned to the fold, according to a massive 2009 Pew Research Center survey on the subject.

Throughout much of the world, there is a negative correlation between these measures of religiosity and a country’s national wealth: publics in countries with a high gross domestic product (per capita) tend to be less religious, while publics in countries with low GDP tend to be more religious. Americans, of course, are a major exception to the rule, because the US has both high GDP per capita and high levels of religious commitment.

Some of the teachers who took part in focus group sessions reported that for their students, “doing research” has shifted from a relatively slow process of intellectual curiosity and discovery to a fast-paced, short-term exercise aimed at locating just enough information to complete an assignment.

All of this marks an unprecedented turning point in human history. Until a few centuries ago, the prevailing demographic paradigm consisted of high birthrates, high infant mortality, and relative short life expectancy. In modern times, advances in sanitation, nutrition, medicine, and public health dramatically reduced infant mortality and increased longevity. This produced a huge demographic and economic dividend for the world, at least initially. More children surviving into adulthood meant more producers and consumers—more units of economic activity. Starting around 1900, the world’s population expanded more rapidly than ever before, growing fourfold in the twentieth century alone, to about 7 billion today. Standards of living also rose dramatically, especially in the developed world.

Today’s demographic doomsday scenarios tend to revolve around too few people, not too many.

The old paradigm of high birthrates, high infant mortality, and short life expectancy has been replaced by a new paradigm of low birthrates, low infant mortality, and long life expectancy.

China’s population is projected to remain flat through midcentury. In recent years the government has begun to relax the one-child policy, and some believe it will eventually be scrapped altogether. When the policy was first put into effect in the 1970s, the conventional wisdom was that it represented an enlightened form of state-enforced family planning (at best) or a necessary evil (at worst). Now, roughly half a billion abortions and sterilizations later, it has become the target of bitter resentment throughout much of China, in part because it’s viewed as an affront to a basic human right, in part because it has been applied unevenly, and in part because it has created a generation of “little emperors” who’ve grown up without brothers and sisters and whose children will grow up without cousins, aunts, uncles, nephews, or nieces.

Either retirees will be hit with a benefits cut of 23%, or workers will have to absorb a massive payroll tax increase of that size, or the two will have to share the pain.

At its core, this is a problem of generational equity. The young today are paying taxes to support a level of benefits for the old that they themselves have no prospect of receiving when they become old. Meantime, as a rising share of their tax dollars goes to fund the social safety net for the old, government spending on other priorities, especially on investments that would improve the economic prospects of the young, is being crowded out. Some sort of rebalancing is plainly in order, and every day that elected officials put off the reckoning is a day that generational inequities increase.

Aside from the Declaration of Independence, the most famous passage in Thomas Jefferson’s writings is the one in which he declares that “the earth belongs to the living, and not the dead,” and that therefore no generation has a moral right to bind successor generations in debt.

A 2013 cross-national study by a prominent European research institute found that the US ranked worst among 29 advanced countries in the degree to which it imposes unfair burdens on future generations.  The study looked at measures such as public debt per child, the ratio of childhood poverty to elderly poverty, and the elderly skew in social spending. An American might quibble with some of the study’s inputs and weighing variables, but the story it tells is consistent with what policy analysts of all ideological stripes in the US have been saying for decades: we’re robbing the future to pay for the present.

Going forward, it’s unrealistic to expect families to take on more of the challenge of caring for the elderly’ it’s quite possible they’ll do less. That puts the question that has animated this book squarely in the laps of public policymakers: how best to honor the commitments to the old without bankrupting the young and starving the future?