07/25/2008 05:12 am ET Updated May 25, 2011

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.