OK Boomer, We’re Gonna Socialize You
The pandemic is turning Millennials into socialists. We must
make them a better offer.
make them a better offer.
By Andreas Kluth
July 25, 2020, 6:00 AM GMT+1
Millennials deserve it too.
Millennials deserve it too. Photographer: Spencer
Platt/Getty Images North America
Platt/Getty Images North America
Andreas Kluth is a columnist for Bloomberg Opinion. He was
previously editor in chief of Handelsblatt Global and a writer for the
Economist. He's the author of "Hannibal and Me."
previously editor in chief of Handelsblatt Global and a writer for the
Economist. He's the author of "Hannibal and Me."
Read more opinion
Follow @andreaskluth on Twitter
Everything about SARS-CoV-2 seems unfair. It afflicts the
poor worse than the rich, and Blacks more than Whites. It also disrupts — and
potentially derails — the lives of people in some generations more than others.
There’s social and political dynamite in this inequity. One likely effect is to
make several developed countries swerve left politically, toward some
bowdlerized form of “socialism.”
poor worse than the rich, and Blacks more than Whites. It also disrupts — and
potentially derails — the lives of people in some generations more than others.
There’s social and political dynamite in this inequity. One likely effect is to
make several developed countries swerve left politically, toward some
bowdlerized form of “socialism.”
The generational effects of Covid-19 may seem
counterintuitive. Medically, the virus is most life-threatening to the
so-called “silent generation” of people in their late 70s, 80s or 90s. But
economically, the coronavirus has left these lives relatively unscathed. Their
careers have been had, their retirement savings — if they had any — had already
been turned into annuities. The Silents as a group are not the pandemic’s
biggest economic losers.
counterintuitive. Medically, the virus is most life-threatening to the
so-called “silent generation” of people in their late 70s, 80s or 90s. But
economically, the coronavirus has left these lives relatively unscathed. Their
careers have been had, their retirement savings — if they had any — had already
been turned into annuities. The Silents as a group are not the pandemic’s
biggest economic losers.
Nor is the generation just behind them, the infamous Baby
Boomers now in their late 50s, 60s or early 70s. They’ve raised their children
and don’t have the stress of home-schooling them during lockdowns. Most are
still earning and saving or are just entering retirement with relatively
generous pensions. Best of all, they’ve been politically in control for so
long, they’ve molded entire welfare and tax systems to their advantage.
Boomers now in their late 50s, 60s or early 70s. They’ve raised their children
and don’t have the stress of home-schooling them during lockdowns. Most are
still earning and saving or are just entering retirement with relatively
generous pensions. Best of all, they’ve been politically in control for so
long, they’ve molded entire welfare and tax systems to their advantage.
My own cohort, the Generation X of people in their 40s and
early 50s, will also be fine overall. Yes, we’re currently traversing the nadir
of the so-called U-curve of lifetime well-being, as we feel the midlife stress
of caring simultaneously for elderly parents and vulnerable children — the same
ones who nowadays share our home offices to Zoom with their teachers. But that
aside, we Xers had a fair shot at building our careers in the booming 90s and —
following the blip of the dotcom bust — the aughts. We’re less worried about
ourselves than about the long-term effects of school closures on our children,
called Generation Z.
early 50s, will also be fine overall. Yes, we’re currently traversing the nadir
of the so-called U-curve of lifetime well-being, as we feel the midlife stress
of caring simultaneously for elderly parents and vulnerable children — the same
ones who nowadays share our home offices to Zoom with their teachers. But that
aside, we Xers had a fair shot at building our careers in the booming 90s and —
following the blip of the dotcom bust — the aughts. We’re less worried about
ourselves than about the long-term effects of school closures on our children,
called Generation Z.
So it’s really the folks in their 20s and 30s, the
generation between X and Z, we should spare a thought for. Logically, they
should be called Generation Y, but because they came of age near a round-number
year they’re the Millennials. And boy, do they keep getting shafted.
generation between X and Z, we should spare a thought for. Logically, they
should be called Generation Y, but because they came of age near a round-number
year they’re the Millennials. And boy, do they keep getting shafted.
It started with the financial crash of 2008, which hit just
as the Millennials were hoping to enter the job market and start their careers.
Suddenly, all the good jobs were gone, and they were more likely to be and stay
unemployed than the older generations.
as the Millennials were hoping to enter the job market and start their careers.
Suddenly, all the good jobs were gone, and they were more likely to be and stay
unemployed than the older generations.
Studies show that even a decade after the crash, all but the most educated Millennials were
earning and saving less than Xers or Boomers did at the same age. Lower
entry-level salaries can have consequences (“wage scars”) that last an entire life time. This precarious outlook
is probably one reason why Millennials had already been delaying marriage and
children longer than preceding generations did, and are more likely to still be
living with (gasp) their parents.
earning and saving less than Xers or Boomers did at the same age. Lower
entry-level salaries can have consequences (“wage scars”) that last an entire life time. This precarious outlook
is probably one reason why Millennials had already been delaying marriage and
children longer than preceding generations did, and are more likely to still be
living with (gasp) their parents.
And then this coronavirus showed up, causing a downturn
that’s making the “Great Recession” of 2008 seem almost mild. After that
previous labor-market trauma, a lot of Millennials took whatever gigs they
could find — as bartenders, baristas, waiters or contract workers. But these
are exactly the types of jobs that fell away during the lockdowns and may not
come back soon.
that’s making the “Great Recession” of 2008 seem almost mild. After that
previous labor-market trauma, a lot of Millennials took whatever gigs they
could find — as bartenders, baristas, waiters or contract workers. But these
are exactly the types of jobs that fell away during the lockdowns and may not
come back soon.
So Millennials have a
right to be frustrated. But what makes many of them irate is watching
the older generations milk the system at their expense, through what some
economists call “Boomer socialism.”
right to be frustrated. But what makes many of them irate is watching
the older generations milk the system at their expense, through what some
economists call “Boomer socialism.”
Consider the generous
but unsustainable public pensions going to Boomers in most developed
countries, which are paid for largely by Millennials and Xers. In the
U.S., there’s also health care
that’s universal and public for the old (called Medicare) but often
unavailable or unaffordable for the young. In many countries, the Boomers
have also bid up house prices beyond the reach of Millennials, in part with tax
breaks for mortgage interest that disproportionately benefit older taxpayers.
Oh, and there’s the mountain of
student-loan debt bearing down on many American Millennials.
but unsustainable public pensions going to Boomers in most developed
countries, which are paid for largely by Millennials and Xers. In the
U.S., there’s also health care
that’s universal and public for the old (called Medicare) but often
unavailable or unaffordable for the young. In many countries, the Boomers
have also bid up house prices beyond the reach of Millennials, in part with tax
breaks for mortgage interest that disproportionately benefit older taxpayers.
Oh, and there’s the mountain of
student-loan debt bearing down on many American Millennials.
This distress, coupled with the hypocrisy of Boomers who
claim to oppose big government while enjoying it in so many ways, explains why
Millennials have been trending left and even embracing the loaded word
“socialism.” It’s these fed-up young
voters who boosted the campaigns of lefty Boomer populists like Bernie
Sanders in the U.S. and Jeremy Corbyn in the U.K.
claim to oppose big government while enjoying it in so many ways, explains why
Millennials have been trending left and even embracing the loaded word
“socialism.” It’s these fed-up young
voters who boosted the campaigns of lefty Boomer populists like Bernie
Sanders in the U.S. and Jeremy Corbyn in the U.K.
Whether Millennials actually use the word “socialism”
properly — as government ownership of the means of production — is moot. More
likely, they simply want better public
policy that addresses their specific problems. Even then, however, they
often fall prey to political snake oil such as rent controls or wealth taxes.
properly — as government ownership of the means of production — is moot. More
likely, they simply want better public
policy that addresses their specific problems. Even then, however, they
often fall prey to political snake oil such as rent controls or wealth taxes.
The better path for policymakers across the West is to offer
more pragmatic, but still sufficiently bold, alternatives. And as I’ve argued,
this means reviving classical liberalism — not in the American sense of “left”
but in the European sense of “freedom.”
more pragmatic, but still sufficiently bold, alternatives. And as I’ve argued,
this means reviving classical liberalism — not in the American sense of “left”
but in the European sense of “freedom.”
Health
care, for example, can be provided publicly, privately or in a mixed system
like Germany’s; but it should always be universal. Pension reform is a
no-brainer. So is tax simplification that cuts loopholes for Boomers, thus
broadening the base without necessarily raising rates. And yes, we should keep
studying the idea, still never properly tried, of a Universal Basic Income —
not to expand, but to replace the welfare state.
care, for example, can be provided publicly, privately or in a mixed system
like Germany’s; but it should always be universal. Pension reform is a
no-brainer. So is tax simplification that cuts loopholes for Boomers, thus
broadening the base without necessarily raising rates. And yes, we should keep
studying the idea, still never properly tried, of a Universal Basic Income —
not to expand, but to replace the welfare state.
It would be tragic if we survived the pandemic only to find
ourselves living in true socialism, which in practice has always robbed
societies of prosperity and individuals of freedom. To avoid that fate, all
generations should offer Millennials a fairer — a liberal — deal.
ourselves living in true socialism, which in practice has always robbed
societies of prosperity and individuals of freedom. To avoid that fate, all
generations should offer Millennials a fairer — a liberal — deal.
This column does not necessarily reflect the opinion of the
editorial board or Bloomberg LP and its owners.
editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Andreas Kluth at akluth1@bloomberg.net
To contact the editor responsible for this story:
Nicole Torres at ntorres51@bloomberg.net
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