As I See It: The Dream Changer
June 2, 2014 Victor Rozek
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Jack Kennedy joked that he had the best of both worlds: a Harvard education and a Yale degree. I have neither. Nor, I’ll wager, do you. Which means that if you’re a recent graduate you’re already lagging behind the competition. That wasn’t always the case, but sometimes good timing is more valuable than a good education. Take me for instance. Like others of my generation, I rode the crest of the American experience. My life was formed (and transformed) by the availability of affordable housing, low-cost education, jobs with perks, and medical care that didn’t require choosing between illness and indentured servitude. You, gentle graduate, will be wallowing in the trough of the American experience. Just a few decades ago, your college degree would have been a passport to economic security and a comfortable middle-class life. Now, not so much. Each June another graduating class is pushed from the scholastic nest into the economic meat grinder. The vast majority will aspire to an upper-middle class life, complete with oversized house, multiple cars, an assortment of toys, and enough disposable income to play with them. But most grads won’t get there, because the decisions that govern their futures have already been made. Those decisions were numerous and their effects compounded over time, but they funneled down to a choice made in 2001 when Congress passed one of the most costly tax cuts in history. But not for you, graduate. This was a gift to the people who can already afford to send their kids to Harvard and Yale. The result was the slowest job growth in a half-century and massive deficits forcing cuts in, among other things, your education. And since the first round of tax cuts worked so splendidly, Congress passed another in 2003. The skyrocketing cost of education will prevent many of you from buying a house. You won’t qualify for a mortgage since you probably already have an equivalent: student loans. The total student loan debt now tops $1 trillion; a staggering amount destined to restrict what might have been possible for those burdened with it. Attending a four-year public university will cost approximately $90,000. Private institutions start at about $130,000 but can run much higher. Stanford, for example, tops out at $60K per year. On entry-level salaries, repayment of that magnitude will be tough sledding. Forty-two percent of graduates are still paying off loans well into their 30s, 40s, and even 50s. Only Shylock would be proud of a system that guarantees decades of financial bondage before you even officially enter the workforce. That assumes you’ll actually find work. A Federal Reserve study shows that 44 percent of recent college graduates are underemployed. Of the graduates who are employed, about half are working in jobs that don’t even require a degree. But even if you are working full time, your salary won’t stretch very far. The median per capita income in the U.S. has stagnated since 2000, and the median income for Millennials is a whopping $39,000. Adjusted for inflation, you’ll be making $800 less than your father did in the ’70s. But while Dad supported his family on a single income, your fixed expenses will be much higher. In the 1970s about half of a family’s income was committed to fixed monthly expenses. But bigger houses meant bigger mortgages. That, plus runaway health care (a trip to the emergency room can cost $10,000), the addition of a second car, the emergence of smartphones, cable TV, and the Internet (and for parents, day care), have raised fixed living expenses by around 75 percent. Which means that if you aspire to a middle class lifestyle you will need a second income. Two earners, however, double the risk that one person will become unemployed or ill; and when one pillar crumbles, the entire facade is threatened. Robert Orben, a comedy writer and former speechwriter for the stirring Gerald R. Ford, once noted that: “a graduation ceremony is an event where the commencement speaker tells thousands of students dressed in identical caps and gowns that individuality is the key to success.” He has a point. College was curriculum-based; but your life is wholly elective. At least it should be. Growing inequality, however, has made more of life’s decisions mandatory. When life-long debt is required to finance the basics of life, choices shrink. And as more and more resources funnel upward, inequality becomes a dream changer, one that’s killing the American Dream. Yet all is not lost. Expectations can be recalibrated. A new American Dream based on quality and relationships rather than quantity and consumption is stirring in the weeds. Many graduates are simplifying and jettisoning the non-essentials that drain precious life energy but offer little fulfillment. It’s simple math; with rising population and shrinking resources, the trajectory of compounded growth is unsustainable and, one way or another, we will either scale down our cravings or they will be lowered for us. That being said, graduates aspiring to careers in Information Technology may fare better than their counterparts. IT jobs will continue to be both plentiful and essential to every sector of the economy, and salaries have remained comparatively generous. At over $80,000, software developers are projected to have the second highest starting salaries, behind only investment bankers. Curiously, notwithstanding the extreme wealth created by the information revolution, today’s technology precisely models the virtues of the changing American dream. The continued correlation between price and performance that has driven the IT industry since its inception shows a profound commitment to quality. And the dominant use of personal technology is nothing if not relational. Social media is like a neural network whose function is to make and maintain connections. It traffics in facilitating relationships. And it is also a great leveler. On social media, status is less significant than inclusion. Whether those values will translate to lifestyle choices remains to be seen. But there is evidence that shifts are occurring. As reported in The Atlantic, “Adults between the ages of 21 and 34 buy just 27 percent of all new vehicles sold in America, a far cry from the peak of 38 percent in 1985.” Whether by choice or economic reality the new generation is learning to make due with less. If they can’t afford to buy a house, they can share a rental. If a car is too expensive, they can get by with a bike and public transportation. If they can’t be fully employed at least they can be fully engaged. Deciding who benefits from economic activity and who does not is a matter of choice. “Poverty is not natural,” said Nelson Mandela, “it’s man made.” As today’s graduates assume positions of leadership, their choices may reverse the growing inequities that will continue to plague the young. Change is the product of countless millions of individual choices made over time. And, dear graduate, should you ever think your choices are too small and insignificant to agitate the system, just remember what it’s like to sleep with a mosquito.
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