Monday, December 09, 2013

Rising Youth Disenchantment: The Facts

"ObamaCare[‘s] whole Rube Goldberg scheme depends on using insurance policies to distribute wealth from healthy young Americans to older, sicker ones."

--Michael Goodwin, New York Post

That’s the problem Obamacare hands youth, in a nutshell.

Conservative commentator Michael Barone offers details:
egregious is Obamacare's requirement that policies for one age group cost no more than three times the cost for another. In practice, this means that young consumers, who incur few heath care costs, are asked to subsidize people in old age groups, who incur many more.
This is the opposite of the progressive economic redistribution, which American liberals usually favor. People in their 20s tend to have negative net worths. They owe more -- in consumer debt, on college loans -- than they have in bank accounts, home equity and financial assets. In contrast, people in the 55-64 age group, the oldest covered by Obamacare, tend to have relatively high net worths.
The “jerk” applied to less wealthy, less secure young people is so obvious that it’s even drawn the attention of liberal Charles Lane in the Washington Post, who calls pandering to seniors “old wine. . . in a new bottle":
The poverty rate for seniors in 2012 averaged 9.1%, much lower than the rate for children, which was 21.8%, and lower than the overall U.S. rate of 15%. Some 15% of youths ages 16 to 24 are neither employed nor attending school . . . For middle-class youths, college tuition costs are a constant source of insecurity.
Lane is right to focus on the high college tuition and related student loan problem, the surface anxiety produced by the lack of jobs awaiting new graduates. From libertarian economist Veronique de Rugy in Reason:
fewer than half of Americans today between the ages of 18 and 25 are employed. For those in that cohort actively on the job market, the unemployment rate is 16%, versus 6% for job-seekers aged 25 and above. These young folks are also more likely to be long-term unemployed: While accounting for just 14% of the labor force, they make up 19% of the long-term unemployed.
In July 2013, just 36% of Americans age 16-24 not enrolled in school worked full-time, 10% less than in July 2007. [Of] 17 million young Americans, 5.6 million were working part-time, 3.2 million were unemployed, and 8.4 million were out of the labor force altogether.
Dan Schwabel, author of Promote Yourself: The New Rules for Career Success, believes that millennials (born between 1976 and 2000) are the Great Recession’s real victims, saying, "almost 60% of millennials have a bachelor's degree, but the most common jobs are in retail."

Fewer jobs means fewer families, as Fortune’s Nin-Hai Tseng writes:
The share of 18 to 34-year-olds living with their parents rose from about 27.6% before the Great Recession in 2007 to above 31%, where it remains today. . . Millennials have contributed to the sharp decline in household formation, which likely will take a while to return to normal.
Up until 2008, about 1.1 million new U.S. households were formed each year, mostly due to population growth. That has declined dramatically; between the first quarter of 2008 to the first quarter of 2011, only 450,000 new households a year were created. Even as the economy improves, household formation hasn't -- only 521,000 households were created between the first quarter of 2012 and the first quarter of 2013. In all, there are 2.4 million missing households in America.
So should young people be financing expanded health care for the elderly? Right now?

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