T Nation

The Old-Percenters


#1

The Rising Age Gap in Economic Well-Being
The Old Prosper Relative to the Young

http://pewresearch.org/pubs/2124/age-gap-silent-generation-millennials-wealth-gap


#2

A quickly growing gap there with the younger folks. The same young who'll be crushed under an impossible entitlement burden.

Time for SS and medicare reform.


#3

Makes sense. It takes a lot of time to build up capital.


#4

Well that and most of the capital is invested in the large corporations which were bailed out and these companies focused on being attractive to shareholders, which is why there were lay-offs and pooling of resorces at the top.


#5

I meant that in general old people will be better off than younger people because they have been working, saving, and investing longer than young people. Even with inflation and being mostly unemployed old people will still typically have a better quality of life than younger people for those reasons alone.

It's just that we have been taught through AARP propaganda that without SS and Medicare, etc., old people would be living in the streets. Nothing could be further from the truth.


#6

Thoughts;

Smaller households. Increasingly attending a college instead of going right into career work.


#7

Compound interest, people. Time and capital. Of course old people have more money as a general rule.

This is seventh grade level algebra.


#8

G-o-o-d-L-o-r-d no! Not another lame "capitalism is bad" analysis. Sheesh.

Look the biggest question is this: Who are the poor? Who are the rich?

The standard counter-cultural argument is that we have the poorest 20% of the population that needs our help and it is only justice that the richest 20% quit being dicks and cough up their fair share. After all, fair is fair, isn't it? They shouldn't have taken it in the first place.

Several studies have shown that the number of people who fall into the poorest 20% of and richest 20% of the population are not there 10 year later -- only about 10% of the people in either group. The greatest single indicator of wealth? Age, marital/relationship status and education. So if you are an 18 year old male high school drop out you are going to be poor, but this has nothing to do with the fact other than you really don't know enough to make money. People in stable relationships generally are also more stable financially. Older people (think about your grandparents) have good financial resources because they have been accumulating wealth for decades. There is no rocket science here, nor is some imposing economic theory needed to explain it (or more accurately, explain it away).

More to the point -- this means that roughly 4% of the general US population is structurally poor or rich. (Think about that, 4% of the population is driving the entire welfare/tax structure and social programs for the other 96% of us.) The categories of richest/poorest quintile will remain simple because there are numbers involved, but the membership is anything but fixed. Again, a lot of these class analyses were valid in Europe in the latter part of the 19th century when the peasants were moving to the cities, but are championed almost daily in the US press as revelations. If you went to a university in the US, you not probably equipped to discuss economics unless you really are in expert in it. Service courses (Econ 101, e.g.) probably left you dumber than when you started...

The "Tea Party" movement as well as the Occupy X movements are two sides of the same coin. The wealthy = older people who really feel like they have worked their whole lives and are getting the shaft for it. The Occupy folks who are younger but, for the first time in history have been so poorly educated about how the world works and money they really are baffled by any collision with reality. They will not be nearly as successful as their parents because they frankly don't have any idea how. (Ummm that lit crit degree is, indeed worthless and your $50k in loans shouldn't have been given to you. A stint working as a greeter at Walmart is about all you are truly qualified to do).

The graph is not surprising and antagonisms will follow age lines more than race or gender lines.

Oh, there is a very interesting book I want to read (don't have the title in front of me) that argues that wealth is even less stable than in times past, so people stay in that upper 20% a lot less longer than in the past, for various reasons. This has a very alarming consequence if we take good old Marxist class struggle as a model for wealth. (I.e. that there is a static class of "the rich" who are institutionally unassailable, mostly modeled on an enfranchised nobility. The state is therefore the only power capable of taking money from them and as a matter of social justice, must.) Taxing the rich for their money is going to start failing as a long-term strategy since their will actually be too unstable a base to draw from. Think about that before you soak the rich because the really rich aren't are rich as you think and they don't stay that way for more than a couple of years. The tax brackets will have to start falling on mostly older middle class people who will resist. Add into that curbing their Social Security and raising retirement age and you'll get an even bigger brouhaha.

'nuff said

-- jj


#9

The bail out argument and unemployment in general are super weak.

Bailouts did keep some companies in business, right or wrong, propogating jobs for young and old alike.

It's common knowledge older people are routinely laid off to hire less experienced folk to do the same jobs for less money.

The unemployment rate in general is so overhyped it iss fucking ridiculous. We usually run about 5% unemployment, 4.5% over that number is not a huge concern at all. There are very few regions where jobs are just flat out unavailable, even if a career has to take a detour.

Frankly, in times like these, companies relish the opportunity to "trim the fat". Employees who skate by in good times are suddenly re-evaluated and weak players are let go, with few exceptions.

I know there are always exceptions, but quality employees are not cut. Employees at risk of losing their jobs anyways, whether they realize it or not, are finally put on the chopping block when it's time to review budgets.

This is why the perpetually unemployed, running out their benefits, are in the situation they are, they suck. Nobody hires them because they get poor reviews, it's not because jobs are not available. Just go to a job board in Any City, USA and search a variety of careers. Jobs will ALWAYS pop up.

I own a company and hire. I can't tell you how many people in the last few months have applied. I was super excited to tap in to such a large unemployed market for talent until I started doing back ground checks.

"Lay off" after "lay off" turned out to be unreliable, lazy employees with generous bosses granting unemployment status.

I don't agree with the bailouts and believe the "trial by fire" should've extended to corporations, but if they had you'd see a real unemployment issue of qualified employees with no where to go.

It's just simply not the case though. The weak are being cut and replaced.


#10

Way to flip out guys. I wasn't implying that the elderly, rich shareholders or companies are bad. My grandma was a shareholder and thanks to that we didn't have to help her out in any way.


#11

lol, my "left wing nutjob" friend also sent me this today.

There must be something to it when the left and the right are both saying the same thing.


#12

No one is flipping out. Just discussing your comment. But you'll have to be more specific than "my grandma was a shareholder".

That doesn't really make sense. Well technically it does, it's just an odd way to phrase what you are saying. A shareholder in what? The stock market in general? A company receiving bail out money?


#13

My grandmother was invested in mutual funds that held shares in the majority of the top companies. I'm sure a few of the companies she was invested in receieved bailouts and It occured to me that if those companies hadn't, she would have been in a much worse place financially.


#14

Now that can be worked in to a conversation :wink:

So of course she is richer than the average twenty something. She's had twice as long or more to squirrel money away in interest bearing accounts.

Take note, fellow young lads, make room in your budget to save and invest if you don't already and you will be the rich old people when you get there too.

And no, you don't have to spend every dollar you have right now. You have to choose to move some to investing, often meaning spending compromises must be made for most of you.

You can downgrade your apartment, car, day to day expenses et cetera even if you don't "want" to.

Take a lesson in frugality from the "greatest generation" while they are still around. Clearly they knew what they were doing.

Or quit being pussies, figure out how to make as much money as possible and do it instead of working dead end jobs hoping someone dies so you can get promoted.