Why are recent grads so strapped? | National | Indy Week
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If you're not of a certain age, then you won't remember when college was a bargain or when the G.I. Bill paid your full college costs and threw in a living stipend, too.

Why are recent grads so strapped? 

Loans, housing and low pay

If you're not of a certain age, then you won't remember when college was a bargain or when the G.I. Bill paid your full college costs and threw in a living stipend, too. You won't remember when that starter home in Levittown, N.Y., cost $6,700, though you probably read about it. That was back in 1952. Adjusted for inflation, the same price would be $44,647 in today's dollars--except that those Levittown houses now sell for $300,000 and up.

What happened? According to Tamara Draut's new book, Strapped: Why America's 20- and 30-Somethings Can't Get Ahead, global economic competition has made it harder for everybody in the United States but especially those just starting out in adult life. And instead of maintaining the public policies that used to ease the transition from youthful dependence to adult self-sufficiency, our political leaders have done just the opposite, yanking the supports out from under our children and grandchildren while maintaining mortgage deductions on their own houses even when they're of McMansion (or beachfront villa) dimensions.

So no, Draut assures you, it isn't just a fiction of your imagination that getting a toehold on life today is harder--meaning more expensive--than it was a generation or two ago. It's true, and her book documents it. What's worse, she says, young folks who've grown up under Ronald Reagan & Co. have been told that it's all their fault, not society's, and that government is the last place they should look for help.

Draut is director of the Economic Opportunity Program at Demos, a socially progressive New York City think tank. She's going to be in Durham next Tuesday, May 23, as the guest of Traction, the progressive (and fun-minded) group for, yes, 20- and 30-somethings. We talked to her by phone for a preview.

Independent: If I can summarize your argument, it is that the so-called "Greatest Generation," and their children the "Baby Boomers," did fabulously well for themselves in the robust, post-World War II economy in America. But now that the boom times are over, and we're in a globally competitive economy, they're refusing to share the wealth and they're screwing your generation. Is that about it?

Draut: Ah, I actually wouldn't put it in those terms. I'm less interested in who's screwing whom than in why it has become more difficult for this generation starting out. Specifically, what are the public policy changes that have contributed to it, whether it's the shift from grant-based college aid to loan-based aid, or the declining investment in things for the common good, like our higher education system. That's basically what I look at. What are the public policy decisions ... that have really made getting into the middle class much more difficult for this generation of young people.

In your book, you named college loans and our policy of mortgage deductions that subsidizes housing for the already rich. What else is in the top three?

Well, the labor market has changed dramatically. So particularly for people who don't have bachelor's degrees, which is the majority of young people, the amount of money they can command [by working] is much less than it was a generation ago. If you look at earnings for the typical 25- to 34-year-old male--let's just use males for now--with a high school degree, if you adjust for inflation, it's down about $13,000 a year.

You also describe a conundrum. Policies are going against young people, and young people are not politically active, which makes it worse. Where do we start to get some change?

It's a tough challenge. People of all ages have become much more cynical about the political process. That said, young people have got to start speaking up, getting involved in the political process, and taking the right to vote seriously. If we don't, it's just not going to happen. And it's not just a self-interest appeal.... People of all ages have something to gain by having more generous college aid, lower state college tuitions--you know, parents are feeling this crunch in a very real way, taking out second and third mortgages. So it's not a generational war, but a need for the generations to band together and get back to the America ideal, which is that if you work hard, you're gonna get ahead, and we're gonna meet you halfway in creating opportunities. And we just haven't been doing that over the last three decades.

Given the information you present on rising college costs and lower earnings, I was surprised you didn't embrace the idea of a national service program for youth.

I'm ambivalent about it. If you look at the trends, and especially the young Millennials--the people who are just now aging into adulthood and are about 24 and under--they've been brought up in an era of community service and volunteer a lot more regularly. But what that hasn't led to is political involvement. In fact, while volunteerism is increasing, political involvement is not.

You suggest, as Step 1, reading a "major" daily newspaper. I think I'd suggest they find a good blog, or watch The Daily Show.

Well, that's where people are already going...

Yeah.

...and the fact is, that's not enough information to be able to understand what's at stake in Congress, and in your state legislature, and when you need to send an e-mail to your representatives. That level of information has disappeared a lot from our newspapers, but they're still the only source for that type of coverage.

You talk a little about labor unions and not at all about the Democratic Party or third parties. Don't you need an institutional vehicle to go through? I understand that reading a newspaper is just Step 1, but what's Step 2?

Well, if you go to my Web site (www.strappedthebook.com), it has a whole "Get Involved" section, which is: Find the groups in your area and groups with an online presence that can connect you to the issues you care about, whether it's child care or the environment or raising the minimum wage. Thanks to the Internet, it's very easy to find the groups that are doing the
organizing.

Traction, and Draut, will be at Joe & Jo's, 427 W. Main St., Durham, May 23 at 7:30 p.m. Patrick Lyons, a Durham financial adviser and author of Map Your Financial Future: Starting the Right Path in Your Teens and Twenties, will also participate. Co-sponsor: The Community Reinvestment Association of N.C.

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