Friday, August 3, 2007

Is Gen X Losing The American Dream?

The stock market continues to reach new highs almost daily. Unemployment rates are at or near their historic lows. The global economy continues to grow and shows no signs of slowing down. Times are good right? Well maybe not.

For many in Generation X and now Generation Y (the Millennial Generation), this is a time of insecurity and anxiousness. Yes, economically speaking, times are good. But the economic boom has not benefited everyone in our country equally.

Generation X and Y are coming of age and growing up in a unique and unenviable position in America today:

  • Wages and wage growth have stagnated. According to many studies, wages aren’t even keeping up with inflation, let alone the skyrocketing costs of real estate, energy, child-care and healthcare. According to some experts, Generation X is now almost guaranteed to become the first generation in the history of our great country to be less well off than our parents.

  • Job security no longer exists. It used to be that you would graduate from college, go to work for a company for 30+ years and then retire with a defined pension and a gold watch. But those days are gone. Security no longer exists in the fast-paced global economy of today. The new economy requires constantly reinventing yourself and the never ending race for new opportunities. Not that having to constantly reinvent your self is a bad thing. I tend to like the idea of learning and doing something new. But the risks associated with this type of economy significantly outweigh the awards. We are being told to embrace the entrepreneurial risks of the new economy, but we do not experience the rewards usually associated with such risks. Unless you consider a 2%-4% annual pay raise a good risk/reward benefit.

  • We are burdened with staggering levels of personal debt. We are the first generation to start our “adult” lives with significant amounts of personal debt. According to Tamara Draut in her book “Strapped: Why America’s 20-and-30-somethings can’t get ahead,” college students today are graduating on average with close to $20,000 in student loan debt for a bachelors degree, $45,000 for a graduate degree, and $100,000 or more for a professional degree. In addition to student loan debt, the typical young American has an average credit card balance outstanding of $2,000-$3,000. Servicing such a large debt load, given the stagnant wage growth has become a nightmare.

Even with the deck stacked against us, we continue to work hard every day to achieve the American dream. Although the media has labeled us as “slackers” and “entitled,” we continue to shoot for the ever elusive American dream. It is a struggle to have to fight and claw your way to stay on track, especially when most of us are living paycheck to paycheck and are only one job loss or illness away from financial disaster. But that is the hand that we were dealt. So play the hand the best way you know how. You might surprise yourself and go “all-in” and end up a winner.

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