The Post-Social Contract Generation

This week, the Rockefeller Foundation and TIME released a comprehensive survey, which asked several thousand Americans about their sense of economic security. One finding took us especially by surprise: almost half of America's youngest workers believe the nation's best days may have come and gone.

This is Generation Y: roughly 90 million Americans born between 1979 and 1990. They are the nation's largest age group, and increasingly its most pessimistic. They are America's future, but fear the all-too-real possibility they might fare worse than their parents.

The survey emerged from two years of work shaping policies and products that can help Americans weather the crosswinds of global economic transformation, but we learned, in the process, about the plight of America's broken social contract.

Between the bookends of the Roosevelt and Reagan administrations, Americans, their employers, and government entered into an implied agreement that afforded citizens a basic level of economic security if they worked hard and took responsibility for their families. Today, that 20th century social contract is in tatters, and eight in 10 of us yearn for a new bargain to help meet 21st century challenges.

Young people are leading the trend. Ninety percent say the social contract is broken and 87 percent -- the largest portion in any age group -- are calling out for a new one.

One reason is that they acutely feel the current economic crunch. We saw it repeatedly in the survey: six in 10 had to borrow money from a friend to meet basic expenses; four in 10 skipped a doctor's appointment because of the costs.

The job market also worsens every day. Tuesday's Washington Post reported that youth unemployment is now the highest in 60 years: 37 percent of teenagers are employed today compared to 51 percent in 2000. Why? Older workers, immigrants, and college graduates now compete for the same jobs as younger and less experienced applicants.

The underemployment challenge is just the beginning. Underlying structural changes have transformed the economy. Generation Y, in many respects, is the first post-social contract generation. By the time its consciousness emerged, the decline of America's New Deal political economy was well underway. Globalization washed up on America's shores. Now, as they begin careers, many choose work as freelancers and independent contractors -- as writers, website designers, physical therapists, or technicians. Very few are protected by employer-based safety nets.

Today's young people will surely change jobs more frequently than their parents did, but they are also more resourceful, and want to be self-reliant. They are well aware they live in an economy that no longer provides the services and support they need and are asking for.

Young people expect their government to do more. The survey shows they overwhelmingly support major investments to create jobs that won't go offshore -- public works and climate-conscious energy efficiency projects in particular. They favor new public policies that will make hard work pay off, which include increases in the minimum wage, employer-paid family leave, and more readily available, affordable child care. And they want new ways to save, invest, and build better futures.

They are willing to pick up their end of the bargain, which is why America needs innovation in the private sector too. In a dynamic global marketplace, with a more diversified workforce, different segments of society require targeted solutions to strengthen their resilience to economic risk.

The Rockefeller Foundation has committed $70 million to its Campaign for American Workers to expand and accelerate these efforts by helping to shape new policy proposals and financial products that promote and protect access to health care, savings, and long-term financial well-being.

Take the vicious cycle of debt and underinsurance, for example. According to the survey, young people are the most likely to disregard a bill because of the cost, and half of them lack health insurance. Yet, the leading cause of personal bankruptcy in the United States is medical debt. When young people max out on credit, they usually manage to stay afloat. Once faced with an unexpected crisis, however, they lack the capacity to cope.

Young people could prevent debilitating medical debt if they had better access to affordable, portable insurance -- which several Rockefeller Foundation grantees are developing. Qvisory, an AARP-style start-up, is gearing up to provide younger workers with exactly this, in addition to counseling services, free financial management tools, and low-cost savings vehicles. The Freelancers Union brings independent workers -- fully one third of the U.S. workforce -- the benefits of old fashioned, employer-based coverage. Finding the right fixes is predicated on understanding the workforce's diversity of requirements. We funded the efforts of Towers Perrin, a global consulting firm, to identify the specific needs of young people and other workers and to pinpoint the products and services that best fill them.

They say that youth is wasted on the young, but maybe wisdom is wasted on the rest of us. The generation that will define America's 21st century is sending a clear message. Young people may well look to the future with unease, but they are telling us which solutions -- which new rules and new tools -- they desire. Now it's up to us to listen.

Comments

[DHFabian]

The social contract also made provisions for reality. Not everyone is employable, and there aren't jobs for everyone who can work. There were outstanding successes in our "old failed policies". Welfare provided families with stability so they could work their way out of poverty. There was no "culture of dependency"; before "reform", 80% voluntarily quit aid in under 5 years, becoming employed. Welfare gave access to education and skills training, enabling most to become self-supporting taxpayers, repaying the aid they had received. Economic disparities shrank to historic lows, and the length of time people used aid decreased. Public costs related to foster care, etc. declined.

The remaining 20% were mostly those with special needs (illiteracy, illness, etc) but minimal effort went into helping beyond providing them with the safety of a monthly allotment. It was cheaper to provide aid than comprehensive services. While these "New Deal" policies and programs had problems, they were wildly successful in whole.

The 100% success rate (apparently) demanded by the public would have required changes that the public was unwilling to finance, such as homebased education/training and work options (recognizing that poor health, and the lack of transportation and childcare are barriers to employment). Welfare played a vital role in building the massive middle class we once had. Welfare "reform" has created a bottom-wage/no rights workforce that is effectively crushing unions and suppressing wages.

[truthynesslover]

The older generation deserves to be turned on.we have left the world a much worse place and left them to clean up our mess AND they get to pay for it!Shame on us!

[pikaomega]

Damn straight we're pessimistic. Or, just maybe, we're more realistic than those who came before us because we have no other experience to draw from.

I was born just four days before Ronald Reagan was sworn into office. So, barring that half-week, I have always lived with ketchup as a vegetable. With a war on drugs, a DARE office lecturing my third grade class about the death that awaited us in the smoke of a joint that none of us had ever known. Ollie North's testimony on the Iran-Contra affair is one of my earliest memories. Morning in America, unless you happened to be poor (which I was) or black (not so much) or anything outside of a WASP power broker destroying the nation from the inside out. My generation was weaned on MTV and "stranger danger," latch-key kids that grew up in front of a TV, reared by the babysitter because Mom and Dad both worked to keep the family afloat.

[noam4prez]

The social contract was always an illusion. US workers did well in the years after the Great Depression until the Reagan era for one reason: labor was in great demand in the US. As soon as capitalists figured out how to outsource labor to more desperate people, they did just that. First it was manufacturing, and now it is "knowledge workers", those with maximum education requirements in engineering, law, finance, medicine.

Our system itself is the problem, and market-based "solutions" are a designed to give us just enough to survive, and keep us doing our jobs generating wealth for the wealthy. Why do you think the Rockefellers set up their foundation in the first place?

[CatfishJohn]

..as the under 30's sip their $6 morning coffees lamenting their futures and griping about an exhausting day of "work" ahead at their computer keyboards and the need for another plush beach vacation, they need to be reminded that they are the ones who have collectively bought into the vapid, conforming consumerism brought to them via corporate america with their i-pods, array of other gadgets, afflcition with fashion and celebrity and mindless MTV culture and instant gratification acquiescence to the "i have to have it/do it/own it NOW!" that makes them the consumer-gluttons they are...but may not be able to be when the kids are born, the mortgage is due and (delayed as long as possible) adulthood responsibilites eventually arrive...the "ant and the grasshopper" comes to mind...but they are utltamtely right in their pessimism..we have reached the zenith of mindless consumer gluttony under bush --and the general trajectory is a slow slide downward form here...

[Cathexis]

I suggest you're being a bit rough and generalizing on a generation, Catfish. All young folk aren't like that. And vapid consumerism certainly knows no age limits. We've been increasingly conditioned towards that end from birth and nwo it is supposed to be a "character issue?" Too harsh, my friend, and too ready to ignore macro-problems that lead to the condition.

But beyond that, I'm 51 and I find myself rejecting the "grasshopper" model, myself. You work like a dog all your life and it's all one sided: YOU are expected to exhibit loyalty and extend yourself for the company (or whatever work is involved), yet there is no recipricol loyalty. Why wouldn't a young person jump ship from job to job, looking for the best immediate payback? Folks who stick it out at the same job, overworked and underpaid, are saps.

And yet ... we older ones still suffer from such conditioning. I'd say the younger ones are smart to have rejected at least this bit of manipulation.

[CatfishJohn]

...you are certainly right...i am overgeneralizing harshly-i used tolike the old saying "the spirit that isnt radical at 20 is dead at 40"..but alas, todays 20 something spirits seen to just be shopping..­.seriously­, I do worry about the uneducated­/underduca­ted under 30's and their trajectories financially..12 dollar an hour service jobs with a kid and wife just cant cut it anymore...even in the professions, the competition is downright fierce for newly minted bachelors degree types and there appears to be virtually no room at the inn for faster track careers unless a 20 soemthing is extremely lucky or has some kind of nepotism propelling them. I am your age, nose to grindstone day to day...less frugal than i used to be...just glad to be using my brain instead of my back to earn a week's pay - 20years of schooling and they put me on the day shift...

[dctackett]

I'll be 30 in a few months and I've always worked hard, kicked out of the house on my 18th birthday, never went to college, worked my way up to a business systems analyst at a large bank, all self-taught... and believe me, I'm definately irritated about the corrupt corporate world...
I understand your characterizations of the young, but I think you're only seeing certain groups of them... and please consider that all people are born and raised in the world setup by those who came before... I grew up as a poor kid digging through trash cans for food money and wearing holey hand-me-downs, with toes sticking out of my shoes...
I have an old i-pod and a cell phone, not into fashion or celebrities or MTV or even sports... I rarely ever buy myself anything, even clothes, not with a mortgage (old-fixer-upper, not a $400,000 new home), a wife and child... I drink home brewed coffee or tea and ride the train and walk...
so please, don't look at a group of kids, make an ignorant judgement and then throw that judgement over everyone else that happens to be in their general age group...

[Jsens3]

Nearer to me than I like lives a 26 year old male college graduate, who has no education debt, owns and drives his late model Jeep SUV extensively; plays golf several times a week; has an expensive cell phone that he uses for text messaging, e-mail, and gps services; works maybe 30 hours a week, and has a cute blond girl friend. Last Sunday afternoon he spent about an hour on the cell phone lining up a bachelor party for a friend. During the loud conversation he got into a discussion about needing a new putter to improve his short game. He mooches off his mother shamefully, pays no rent, contributes no money for anything, and passes bills on to her when he can. which is frequently. A major expenditure for him, orther than his cell phone and car payments, is for attending Dave Mathews concerts. He will attend three concerts this summer: one in Tucson and two in California. For one he has reserved a deluxe room at a Westin Hotel in San Diego.. Of course he has to fly to those locations. Also, he expends significant sums (for him) for beer - and not Budweiser either. He is leading a pretty good life, if you ask me. Somehow, all these "lamentations" seem hollow to me.

[DHFabian]

Those days, primarily a media invention, are gone. Young people today are struggling to pay
for the higher education essential to getting anything better than a minimum wage job (which, today, barely covers the rent alone), and money they once used on such trifles as food and clothing now goes into basic utilities and gas.

[justelise]

When you have baby boomer parents, of course you're going to buy into every level of materialism. Mommy and Daddy picked them up in the BMW wagon after school and shuffled them to soccer practice, violin lessons, and the Princeton Review. When their grades weren't stellar, getting into their Ivy League of choice was no problem, because they were legacy kids. Of course they're entitled brats, because they were raised with everything at their fingertips! They never worked for anything, so how do you expect them to understand the concept of working hard to get something when a lot of them never saw anyone work hard for anything.

"I learned it from watching you, Dad! I learned it from watching you!"

[skruff]

Sorry, but this is an old story, I've lived it all before.

The place was Lawrence Massachusetts just after the first oil embargo. The mills were closing, the unemployment lines were three miles long, and the polls showed most entry level workers believed they would not do as well as their parents.

If I had purchased real estate, energy stocks, or even invested in antiques, I would have been far richer today.

My advise to "younger workers: " When everyone says "it's over" look around for oportunity... It's everywhere... True, it's not "your fathers Oldsmobile" but maybe just maybe, it will be better.

Me, I'm shifting my investments to Green energy, and the real estate that sells following a down-turn... small, affordable starter homes.

[Cathexis]

Nice that you have sufficient resources to shift, skruff. So do I. Makes for some very nic einsulation to weather major downturns and transitions.

However, many people (perhaps most people) don't have this luxury. If you've been living paycheck to paycheck, loss of livelihood can leave a person/family teetering on the edge. If you have a marketable skill set, opportunities may well exist. If you've worke din a factory for 20 years, there may not be many niches available in this Grand New World you see.

In short: I urge people not to take their own position and extrapolate it as everyone else's reality. Show a little empathy, at a minimum.

[skruff]

Humm somewhere I must have miscommunicated. I said "IF" I had invested. I was the guy at the end of that unemployment line, I made any money I have now in the 1980's and had the LUCK to exit before the bubble burst.

One poster says I should show "empathy" I thought I had... I offer the opinion that something better is over the horizon.

[Cathexis]

It is nice that you have sufficient resources to shift, skruff. So do I. Makes for some very nice insulation to weather major downturns and transitions.

However, not all have this luxury. If you've been living paycheck to paycheck, loss of current livelihood can leave a person/family teetering on the edge. If you have a marketable skill set, opportunities may well exist. If you've worke din a factory for 20 years, there may not be many niches available in this Grand New World you see.

In short: I urge people not to take their own position and extrapolate it as everyone else's reality. Show a little empathy, at a minimum.

[truthynesslover]

How much did you pay for your education compared to today?Your house?Have you seen what it costs for a one bedroom apt in mass?Im glad for you that youve got yours but if you think this global economy is something youve "seen before" my question is where?

[DHFabian]

Most people, especially the young, don't have money to invest, since wages have fallen so far behind the cost of living. Most people aren't running out to buy the newest gadgets or nicest clothes. Most of struggling just to pay for gas, rent and utilities.

[Outsideadog]

Extremely impressive article and equally impressive set of replies. There's something about the honesty expressed here - maybe it's the lack of political jargon, no, I can't call it straight talk...democratic honesty perhaps...authentic free speech.

If the last thirty years have been an experiment in a denial of economic rights, then it seems to vindicate FDR's vision as of 1944, after he'd seen the effects of both Communisim and Fascism, or what Hannah Arendt called Totalitarianism. He mentioned the rights of life, liberty, the pursuit of happiness AND well-being

See http://www.fdrheritage.org/bill_of_rights.htm

Best wishes to you all.

[ContraEgoiste]

Welcome to the neocons "New World Order" where our free-marketeers have reduced the US to a third world consumer nation. Where profit is privatized and loss is socialized creating a system where wealth flows to the few at the expense of the many. Where laws of propriety have been removed allowing Cos. to cannibalize their own citizens to feed their bottom line. Where companies no longer need to operate in the US and can relocate to places like Dubai while still profiting from the US now crumbling infrastructure, ingenuity and workforce.

Where there is a scarcity of jobs due to facilitation industry flight in search of cheaper cost and what remains is being sold piecemeal to foreign investors. Where the cost of education is increasingly becoming out of reach. Where the environment and the food grown in it are increasingly poisoned while health care is becoming a luxury for those who can afford it. Where the prospect of paying a deficit that is reaching 10 TRILLION while we borrow Billions to wage a war may be impossible and the final nail in the coffin. Where all the killing of said war can lay heavy on your conscience while the only way to maybe get some training or a job is to join this enterprise.

What's to be pessimistic about?

This has been the biggest heist perpetrated on the American public. Anybody voting Republican has to be suicidal.

[iambusto]

"Good Education" is very relative.

A lot of people go to colleges for getting a degree in disciplines that they should never reasonably expect to pay well. but they still do it. I know someone who went to school and racked up a school loan of 30K studying English literature....jeez.

people graduate from med school/law school with 100K loans and still manage to do just fine. what is of utmost importance is to pick your discipline. make sure you go to school to study something that pays well.

i made the mistake of going to school studying engineering then science. it pays pretty shitty compared to a lot of other fields. completely my fault. its never too late to start a new career.

[Xysea]

Pick your discipline? lol

That is why we have a glut of specialists and hardly any GPs. And that is why the astronomical amount of lawyers chase ambulances.

Some of these disciplines should flat out pay more; an English lit degree can make a teacher, a librarian or any number of decent jobs.

Of course, you must be aware that to get any kind of decent job in the US you are told you have to have a degree - by society AND your employer. Which means racking up a debt and hoping the job you get helps you to pay it off. This should not be. Traditional non-college degree requiring jobs in manufacturing (like steel, car, etc) have disappeared.

God, you're myopic.

[Cathexis]

Xysea: You are exactly right. People who think of Education as a panacea are myopic.

I come from an extremely modest background and have one of those fairly "fluffy degrees." I also have a friend (great guy, BTW) with several advanced "real" (Engineering) degrees who admitted he went through a period of resenting my comparitive financial/careeer success, since he had put in YEARS of much harder scholastic work (which is true and I readily acknowledge) only to find me right there in his socioeconomic group, with a mere fluffy BA. Worse, more and more of his field is getting outsourced to South Asia.

Specific skills ARE important, but they are also subject to obsolescence when an industry turns. One only has to look at the IT or Telecom industries for proof.

The true benefit of education is in learning how to think ... and how to learn. Degrees such as English and (especially) Philosophy are not wastes and it always amuses me when unenlightened folks turn up their noses at such disciplines.

[justelise]

Most of the English Lit majors I know are programmers, software testers, and work in design (print or web) and publishing. And when the tech jobs get outsourced, they can fall back into writing, teaching, and editing jobs seamlessly.

I don't know why the U.S. de-emphasizes the arts, music, philosophy, and language studies, and doesn't pay decently in those fields. In Europe, people make a solid living in the arts and humanities. This nation is systematically killing art and music in the public schools.

[zizyphus]

For example, avoid majoring philosophy and art, as I did. If you are looking for money, it won't usually be found in those fields. When I was in college in the late 60s, it seemed like the golden days would never end. I was unable to imagine a world where money would be hard to get. There was so much of everything then. I was studying philosophy and art for the joy of it, without any thought whatsoever of how this pay off for me in the end.

Of course, now I am pushing 60, still working, and not much cash reserves for my "old age" whenever that is supposed to come. I will never be able to "retire" per se, but maybe artists never really do retire, they just die.

[SCG]

In a way I feel sorry for those born post 70's as they have no memory of a prosperous economy where the entire country progressed and the future was always brighter.

[Grulg]

Generations last closer to 20 years, not 11(where did you get THAT range-'79-90?! try about '80-2000 or so please).-plus if anything Y prob. will be just fine like all the other generations.

[jsarets]

I was born in 1983. I'm not pessimistic about the future, I'm pessimistic about the present. I'm frustrated because I know that the majority of Americans won't see the world the way my generation does for another decade or so. In the meantime, we have population whose perspective is incompatible with the present reality of a social fabric that is weaving itself across traditional barriers and power structures.

Collectively, we just don't get it quite yet, although it's implicitly understood by most of my generation. And many of the older people who do recognize the evolution of a new social order cannot put their finger on what it actually is, or they reject it, or they cannot identify its implications, or they are blinded by preconceived notions.

The thing about young people is that we don't have all the answers (even when we think we do), but we can tell when our superiors don't have the right answers either. The best advice I can give to older people is to look past our proposed solutions when they're off the mark but pay attention to our understanding of the problems they are intended to solve. We're more valuable for our perspective than for our wisdom.

[Herrington]

As a baby boomer I am gratified to share your perspective, as are increasing numbers of whatever generation Americans.

The answer is in the myth. The one thing nobody ever questioned about America was that it was the land of opportunity. And the truth is that when the era of teritorial expansion was ending, America was fast becoming just like Europe. Markets were established and monopolies coming on line. Free land and westward expansion had put it off.

It took vision to prevent the establishment of an American capitalist aristocracy. For whatever reason, the Roosevelts, Teddy and Franklin, had it. Perhaps they dreamed of an actual egalitarian utopia, a meritocracy.

But the power that drove the defeat of the American atristocracy was unions, who backed the political candidates that saw it their way.

Therein is the lie. It is of omission. Socialism defeated the raw capitalism from which we now suffer the consequences. And to unions was passed the torch of equal opportunity from the individualists that first made the myth of America.

[truthynesslover]

And many union people dont even know unions are socialist{even union presidents}.Many also voted for anti union presidents and republicans who were never freinds of the unions which is why they are so weak.Because of their ignorance and selfishness unions have seen pensions disappear,wage and benefits cuts.Its sad.

[joebaggadonuts]

Herrington, I have to disagree. The current American Aristocracy is alive and well, it's just that the ones of it who are in control have let us down, and they seem to like it that way. The Kennedy boys were shot. There were none willing or able to take their places. I have hopes for the founders of Google, in the future, and Bill Gates seems to be taking an interest in bettering the future of humanity as well, and currently.

To blame it on the Unions is really odd. I see this differently. Unions and Management are like the Fundamentalists of both sides - Bush on one side, Bin Laden on the other. The fact that the people let them control the conversation and the policy, and in fact the whole game and playing field, is the problem.

To presume that America could remain the leader of the world pursuing its course was a mistake. If people were wise to the facts and thought together real hard about the future, things could have been changed before this debacle. Gunboat diplomacy is so two centuries ago. Slave labor is even older. We need to evolve. We are entering a major evolutionary event.

[Binx101]

I'm afraid I have to take issue with the argument you have posited here. Out of box you assert that Gen Y is collectively the most pessimistic generation ever. You may have good reason to believe that but this is purely opinion and shouldn't be hoisted so cavalierly. How Gen 'D' perceiving things ... you know Generation 'Depression' and how about Generation WWII.

You seem to have nonchalantly discounted the potential for historically competing pessimists (with justification) But that isn't actually the premiere point.

This 30 and under crowd may be accustomed to or fighting with sensory overload - granted - and their language and expression is different, by my observation, to a greater extent from its parent generation than the last few generations. While this may be my dementia and not measurable at all - I don't profess to be expounding as though it were measurable data - which I fear you did.

Lastly, this Generation Y has this middle aged man, very enthusiastic because of their commitment to the planet, our politics and quite often their neighbors. They may very well yield the best days of our lives because of what they learned and watched during the worst days of our lives - and I surely mean the coup of the American National Government by neocon operatives and bootleggers..

Pessimistic, I don't agree. Realistic, energetic and breathtaking with their embracing the challenges ahead to correct the mistakes of its predecessors. Us.

Binx101
The Almost Daily Binx
http://binx101.wordpress.com

[KillTheMessenger]

Hey, how would you feel if you had been screwed by your parents? And not just once but basically all the time?

[django707]

They are pessimistic because they are extremely bright and they know their future's been robbed by the insatiable greed that has dominated this country.

Hopefully, they'll revolt.

Maybe even stop consuming. Now that would really upset the apple cart!