Yesterday I wrote:
Let go of your ideas about what you’re entitled to. You’ve never seen such a pack of whiners as my b-school class when we all got laid off and had to find new jobs that paid less than the ones we’d been expecting. Hadn’t we gone to a top business school, worked hard and done everything we were supposed to? How dare this happen to us! Message from the Universe: you got an above-average deal the minute you were born in America in the late 20th century, instead of in Europe in the middle of the Black Death, or in Angola in the middle of a civil war. Anything you get on top of that is strictly bonus -- and that goes double for middle-class college graduates. The longer you spend pining for what you lost, the harder it will be for you to find a new job. Employers like people who accept reality and move on, not people who spend their days complaining that they’re not being given their due.
This struck several people as unsympathetic to the millennials, who have it so much worse than every previous generation. Somewhat coincidentally, I was also pointed yesterday to the “Old Economy Steve” meme, which celebrates/laments the ease with which prior generations graduated from college, got hired into a good job with health insurance, lifetime employment, a pension or at least a 401(k), became a homeowner at a tender age, and so forth. And to this piece by Adam Weinstein:
I don’t feel special or entitled, just poor. The only thing that makes me special is I have more ballooning debt than you. I’ve tempered the hell out of my expectations of work, and I’ve exceeded those expectations crazily to have one interesting, exciting damned career that’s culminated in some leadership roles for national publications. And I’m still poor and in debt and worked beyond the point where it can be managed with my health and my desire to actually see the son I’m helping to raise.
Now, Weinstein is not that much younger than me -- I’d guess four to six years. But I’ve now heard this complaint from so many folks his junior. And as someone who lived through the brief golden era of the late 1990s, and has done a bit of research into the lengthier imagined golden era, let me point out that a few of us do have a bit of an idea about student debt, underemployment and lifelong renting. The good old days weren’t always good, and tomorrow’s not as bad as it seems.
That’s a line from a Billy Joel song, by the way. Billy Joel was a famous musician, back in that magical fairyland of excellent jobs with lush benefits from which no one ever got fired.
Let’s take a hypothetical woman who graduated from college in 1994. Call her, oh, I don’t know, “Megan McArdle.” Megan basically hit the demographic and educational lottery: She graduated from an Ivy League school with no debt. Unfortunately, she had a degree in English, so her first job paid only $19,000. Double unfortunately, she was laid off. She went to work for a startup, where she was laid off when it folded. Her next job was as an administrative assistant at a nonprofit. “Assistant” was one of those great, well-paid jobs that lots of people had, back in the day. It involved typing someone else’s memos, answering phones, filing paperwork and making copies. The main skill required was knowledge of the alphabet.
Megan didn’t like this job, so she went back to school to learn how to be a network administrator. School cost somewhere on the order of $6,000, which had to be financed on a credit card. Unfortunately, it turned out that the value of this credential was basically nil. But Megan was still very lucky. She found a job for an administrative assistant who also did some basic stuff with computer networks. That job was for a startup that did computer training. Said startup folded in three months, prompting a college friend in equity research to ask if she could please let him know before she accepted a position at the companies his boss covered, so they could short the stock.
At 23, Megan took her fifth, yes, fifth, job out of college. This was the go-go 1990s, so she found a good job at a tech consulting company, where she worked for three years. There she finally got that 401(k) we’ve been talking about. Unfortunately, she left for business school in 1999, and the Nasdaq crashed not long thereafter, so that 401(k) is still worth less than the cash she put in in 1999.
But hey, she went off to a top-notch business school, the University of Chicago, so she should have had plenty of cash to earn those losses back, right? In fact, she graduated in 2001 with a management consulting gig that carried a fat signing bonus and a six-figure salary. To be sure, there was a little bit of a hiccup in the stock market, so there was a little delay starting that job. Meanwhile, 9/11. Megan, who grew up in Manhattan, moved home and ended up working down at the disaster recovery site, doing administrative tasks for one of the construction companies there (her father worked for the heavy construction industry in New York City). She spent a year there, making somewhat more than she needed to cover her $1,000 a month of student loan payments, because this time around she financed her expensive education.
But this was obviously not a long-term career path. Unfortunately, she was laid off yet again, from the management consulting firm, without ever starting. Her old industry, tech consulting, was the only place doing less well than management consulting and banking. She kept getting almost hired, only to get hit with another hiring freeze. She was pulling in a little money from some small-business consulting and a little money from freelance writing she’d gotten through her blog. But neither of these things paid well enough to allow her to leave her parents’ spare bedroom, where she spent her 29th birthday … and her 30th … and her 31st. She was uninsured, with several chronic diseases. Her clothes wore out, and she couldn’t afford to replace them. For the first time, she understood what Victorian heroines were talking about when they felt “shabby”: Her clothes were stained, stretched out of shape and fraying at the edges, and there was no money for more.
Finally, amazingly, she found a job at the Economist. It paid $40,000 a year. In New York. After rent, taxes and those $1,000 a month loan payments -- because way back in the golden years, there was no such thing as income-based repayment -- she had essentially no disposable income. She ate the generic ramen because she couldn’t afford the pricey stuff. Any freelance check she managed to get went to help whittle down that mountain of debt. It took until 2007 for her salary at the Economist to equal the salary she had left to go to business school in 1999. By then, she was plowing 15 percent of her income into her 401(k), but she’d made no contributions between 1999 and 2005, and because her old 401(k) had essentially done nothing, it was as if she hadn’t started saving for retirement until she was 32.
As the loans went down and the income went up, things did get better. But she couldn’t even dream of buying a house until she was in her late thirties. Her 401(k) is not where it should be because of all of those lost years. And at that, she was obviously extraordinarily lucky. She’s white and middle class, and possessed of an excellent education. She has had some great career breaks along the way. There are a lot of people out there in her generation who had a really hard time of it. She’s not one of them.
Are there people in her generation who had it easier, who stepped into great jobs straight out of college and never stepped out? Yup, and they’re even luckier than our hypothetical English major. Is the job market unusually bad right now for millennials? It sure is, and believe me, millennials have nothing but the deepest sympathy from me and our hypothetical. Life seems scary, and y’all don’t deserve this.
But here’s the funny thing: When I was moving out of my parents' home and into the 435 square feet of paradise where I spent my last years in New York, I was seriously panicking. My rent was $1,100 a month, on top of my $1,000 a month in loan payments and New York City taxes. I could do simple arithmetic, and the budget numbers didn’t look good. How was I going to make it?
My mother took me for a 32nd birthday drink, which I had a hard time enjoying, given that I was freaking out. And then she said, “You know, when we bought our apartment, I was eight months pregnant, we had less than $500 in the bank, and I’d just quit my job.” My dad was working for the mayor of New York at the time, which may have had excellent benefits, but wasn’t exactly lavishly remunerated. And suddenly I realized that oh, wait, my parents were once my age, and they, too, had to figure out where the money was going to come from, and that wasn’t easy.
OK, but how about my grandparents, who entered their prime earning years in the golden era of World War II and the long postwar boom? Both my grandfathers were small-business men, not union men; where I was showered with books, my dad went to the public library every week, because books were expensive. My grandfather died young -- sadly I never met him -- and the business had to be sold, with no guaranteed pensions for anyone.
And here’s something funny I found out when I interviewed my other grandfather for a business school class: He, too, spent a lot of time panicking. For one thing, he bought his business on a co-signed loan from his father and father-in-law; if he hadn’t paid it back, they could have lost their farms. Then in the mid-1950s, when he’d really gotten himself in a good position with a gas station on the main highway between Syracuse and Rochester, the state of New York announced that it was building a bigger highway, the New York State Thruway, which was not next to his gas station. Overnight, everything he’d spent 15 years building up was in jeopardy .
That lifetime employment with the fantastic benefits and the guaranteed pensions, that didn’t happen for small-business owners. It didn’t happen for the people who worked for those small-business owners (though my grandfather did provide his employees with what they called “major medical,” or hospital insurance). Farmers had no guarantees; family farms continued shutting down at a brisk clip in the 1950s, just as they did in every decade thereafter -- the farm on which my grandfather grew up has seen half its fields return to brush. Blacks certainly weren’t having an easy time of anything, nor were Mexicans, nor American Indians, nor Asians, nor women -- who were paid less than married men for the same work as a matter of policy and mostly couldn’t get the same work. And while obviously it would be nice to have the good jobs without the racism and sexism, one reason that white men in America often seemed to have the great jobs we remember was that those jobs were largely reserved for white, native-born men -- America also having basically closed its borders to most new immigration in the 1920s.
As a percentage of the workforce, union members peaked at 28.3 percent -- in 1954. The percentage of workers who were covered by defined benefit pensions peaked in the 1980s, at 38 percent. And while mean job tenure has declined, this has affected mostly men over the age of 35 working in the private sector.
In other words, while it’s true that there are fewer guarantees than there used to be, it’s not true that everyone in the good old days had an easy path to lifetime employment. Those people were always a lucky minority. They still are, if a somewhat smaller one. Most people in the generations before the millennials had to struggle. They were afraid they wouldn’t be able to make it. They, too, were woken up in the wee small hours by their own economic terror. The reason your parents’ lives look so carefree to you? Well, in part because Mommy doesn’t usually tell little Timmy that she’s having night terrors over how to get him outfitted for school if the old minivan finally gives up the ghost. But mostly because all this was taking place when you were 6 years old. And everything adults do looks easy when you’re 6.