February 21, 2006
A generation in debt, with no way out
Generation Debt: Why Now is a Terible Time to be Young, by Anya Kamentz, Riverhead Books, 384 pages, $33
Today's young adults, according to conventional wisdom, will work longer hours at "McJobs" than their parents or grandparents, while paying higher taxes and enjoying fewer benefits.
In Generation Debt: Why Now is a Terible Time to be Young, New York journalist Anya Kamenetz, a Yale graduate and member of this generation, presents a series of essays on this phenomenon, first published in the Village Voice. Her theme is the finances and employment of Americans, roughly aged 24 to 34.
Kamenetz highlights many important points. For the first time, significant numbers of university graduates are beginning their adult lives shackled to heavy debts. Instead of opening doors, a degree becomes in itself a kind of prison, forcing graduates to choose security over freedom or career mobility, or else to pay a heavy price.
Paradoxically, as university has become more expensive, it has become more necessary in order to earn even a basic living. High school graduates of earlier generations could earn a wage sufficient to support a family, often in unionized jobs. Today, jobs that pay minimum wage or close to it, and freelancing that provides neither security nor benefits, are the major sources of employment for many young adults.
The debts to which the book refers are not only student loans, or even the consumer debts of young adults themselves. Kamenetz also explains how young workers are forced to finance U.S. Social Security and Medicare benefits that will not likely exist when they themselves need them. There are only two ways these programs can be sustained: cutting benefits, or increasing taxes. As she explains, the political power of older generations is such that the first option will never be realized.
Although health care is less of a concern for young Canadians, this country, too, must contend with increasing debt loads, and with the coming conflict between the demands of Canada Pension Plan and health care for the elderly, and the ability of young workers to finance them.
Generation Debt is a series of essays loosely woven together, rather than a single piece of work. Kamenetz touches on some threads in one chapter, ignores them for several, and then mentions them in passing again. She mentions the rising debt loads of graduates, and also the loss of parental support after divorce. But she doesn't tie the two together, when in fact other writers have clearly shown that children of divorce are both less likely to attend university and to receive parental support while there.
Similarly, she sees financial instability as the cause of her generation's reluctance to establish stable domestic lives. It is equally possible that the causation runs in the other direction, that without a spouse or family young adults lack the motivation or the discipline to save and spend wisely. More is needed to support Kamenetz's interpretation of the data here.
The first-person, conversational tone makes this book an easy read. Kamenetz relies on anecdotes and first- or second-hand stories to bolster her points, which means that the book is sincere but ultimately unpersuasive. A better subtitle might be "why now is a bad time to be the child of a middle-class home," since the book doesn't address how, or if, the financial prospects of the wealthy, the poor or minorities are different now than in the past. And most of her subjects have either completed or dropped out of graduate school—hardly a snapshot of American society as a whole.
Kamenetz gives insight into an often-overlooked aspect of the young American middle class. Books on the psychology, dating habits, pop culture and health of this group are plentiful, but little has been written about their finances.
Generation Debt would be strengthened by a more serious attempt to show a way out of the mess it succeeds in portraying. Another book pronouncing that consumer debt is too high adds little to the debate unless it also addresses possible solutions.
was the lead researcher on the Canadian Healthcare Consumer Index, and the lead Canadian researcher for the Euro Canadian Healthcare Consumer Index in 2007 and 2008. She has an MA in political history from the University of Manitoba.