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The New Frontier of Wealth Inequality: Young Vs. Old

The New Frontier of Wealth Inequality: Young Vs. Old

With all of the talk in recent months about the 99% vs. the 1%, it’s easy to lose sight of other forms of economic inequality. One of the most pervasive, and unrecognized, inequality problems facing recent college graduates is actually intergenerational wealth inequality, between them and their grandparents.

According to a new Pew study, “Households headed by older adults have made dramatic gains relative to those headed by younger adults in their economic well-being over the past quarter of a century.” Whereas the wealth of households headed by people above the age of 65 have gone up by 42%, the wealth of households headed by people below the age of 35 has gone down by 68%. Indeed, the average young household only has $3,662 to its name. These trends are similar for income too, with younger peoples’ incomes rising at only 1/4 the rate of their senior peers.

This research is, unfortunately, not all that surprising. Recent college grads are stuck with high levels of debt and no prospects for well paying work. And it looks like things aren’t going to get much better for younger households any time soon. Student debt continues to balloon, and the policies put in place to mitigate it aren’t likely to have much of an effect. At the same time, future cuts to Medicare and Social Security (as advocated by Republicans and the deficit-cutting supercommittee) will only redistribute wealth from younger taxpayers to current beneficiaries — those households who have benefited the most from recent wealth trends.

Ultimately, it’s not entirely clear what the long-term effects of this wealth shift will be. It’s certainly possible that the excess wealth in older households will trickle down in the form of inheritance over the next couple decades. At the same time, though, that doesn’t address the biggest problems for younger households right now: they have no way to get out of all of their debt. Until that’s addressed, this problem will only get worse.

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Photo credit: TheElders's Flickr stream.

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6:45PM PST on Nov 13, 2011

You know Doris, you are right? My mother was born in 1933 and she would always tell me what it was like living during the great depression and during WWII with rationing. We the boomers that have followed are a result of such misery during those times. Our parents probably spoiled us because they can recall such deprivation with necessities and didn't want their children to be in such conditions. But their overcompensation is probably why we have not had as such a sharp perception of excesses. Those excesses have led to so much greed in our society and a sense of "the world owes me a living" attitude on the part of many. The sense of being able to survive without the latest gadget just wasn't taught adequately to our generation. But that drive also fueled the economy from the largest population to ever be recorded in history. We the boomers should have learned from our parents to share like they did with their families, friends and neighbors to make it through the hard times without giving up on themselves. The generations can survive together. I saw it in my grandparents with my parents....we boomers are no better. We can do it if we want to. People are more important than the "things" that we have been brought up with. The greatest generation?....maybe in numbers....but our compassion is sorely lacking right now.

10:27AM PST on Nov 13, 2011

They say the majority of Americans want less government then why is it that 64% of the people surveyed want the government to distribute my wealth? I guess because that works for them, why go out and make your own money if the government will help you steal it from me!

12:16AM PST on Nov 13, 2011

This story is part of the propaganda war against normal people. But from the comments, it is successful propaganda, sadly. It is part of the divide and conquer strategy always used by the elite to control the rest of us. They love it when we squabble about slight differences in wealth among groups of people all of whom have been robbed by the elite! They love to set young against old, black against white, women against men, straights against gays, urban against rural, and so forth and so on. And we, the so-called 99%, fall for this same deception over and over and over. The divide and conquer strategy exploits fears and envy between groups of victims to set us against each other and deflect blame from the real bad guys, the elite.

People need to learn to look below the surface to understand the real purpose of the stories we are bombarded with. Who benefits when we react (as intended) to the surface purpose? Not us! Usually our enemies.

Why is the US economy in such a mess to begin with? The pirates and parasites of the elite stole our wealth. But we let them. In many cases, we even helped them. I will give one example that involves an earlier use of the divide and conquer strategy. In the 1950s, US labor unions held the hammer. They had the power to benefit workers, all workers, not just in the US but globally! The US was the only great power then, especially economically. But what did the unions do? They excluded blacks, gays, women, and others even

3:40AM PST on Nov 12, 2011


7:04PM PST on Nov 11, 2011

The statistics cited in this article don't paint the whole picture. They fail to mention that households headed by single women are not experiencing the same prosperity, and the wealth of older females has declined as well. Poverty is feminine and wealth is masculine. We must address not only age, but gender and race when addressing question of wealth disparity. Anything else is to further an already egregious injustice.

5:42PM PST on Nov 11, 2011

Until you walk in their shoes -- but maybe that's coming for all of us. A young couple, and their 8 year old daughter that I have been privileged to call friends, are now in dire straits. and he's always looking for any kind of work he can get to supplement the $7.00 an hour part-time stocking job he finally was able to land. She would love to work, and has applied and been considered for positions as a checker in supermarket until they find she has had back surgery. So what are they to do?

2:00PM PST on Nov 11, 2011

US Seniors with $$$$ :

Don't forget, (ala Elizabeth Warren) the ONLY reason you were successful is from the abundant opportunities you had living in the United States. You had access to great paying jobs, often with union benefits, affordable housing and good schools in nice neighborhoods, low food prices, cheap gas, and affordable or employer paid health care. All those opportunities have either gone away or are greatly diminished for the current younger workers.
So your "hard work pays off" formula does not cut it in today's situation . It was not YOU exactly that was successful. It was the county as a whole and you were along for the ride . Now, people work harder and harder for less and are called lazy if they are not able to pay the bills without assistance. They lose their job from downsizing and are called lazy if they cant find another job quick enough.

My point is it is easy to be successful in a good economy, so don't think it was all you.

12:02PM PST on Nov 11, 2011

Exactly David

That is all this article was trying to say. It was saying nothing about young people being lazy or stupid or anything else. This is the first time since the Great Depression that a number of our young people will not have it better than we do. They will survive of course.

But its going to be WAYYYYYYY harder for them to jump on the Train…..because frankly there are no seats available. They are having to do very untraditional things to try jump starting themselves. They are doing far more bartering of THEIR services to get a return service by someone with a different talent. They are out there struggling. I talk with my son about this quite often and I see it on his Facebook page. They aren't whining and waiting for a handout. They are trying to do something different because the old way isn't working well at this time. The 20-30 year olds are just as smart and energetic as we were.

11:36AM PST on Nov 11, 2011

I hope that everyone on this site remembers that these fine young people will be the ones caring for us as we age. The least we can do is fight for their futures. Go OWS, Go 99%'ers!!!

10:21AM PST on Nov 11, 2011

Having been born in 1929 (the great depression years) and having lived with ration stamps,practice blackouts,shortages of many things,I survived and am grateful that I had experiences of being with out many of the so called necessities. We all pulled together,with the help of family,neighbors and managed to beome a generation of hard working citizens that did not depend on entitlements and aid...we did it on our own and made us a very proud America. Today's generation have an altogether different lifestyle,it appears. They have not as yet experienced what it is like to live without luxuries, and what hard work and saving is all about as their parents did. Oh, I could go on and on but I am only commenting. It sure has changed the world, as I once saw it.

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