Generational Inequality

[SWINDLED! DEB How the Millennial Generation Will Pay the Price of Washington's Paralysis Millennials are a facing future of higher debt, fewer jobs, less wealth and lower wages. If these issues are not addressed. Millennials will have a lower quality of life then past generations. GENERATIONAL INEQUALITY Over the last 30 years, the economic gap between younger and older Americans has dramatically widened. Increasing Concentration of Wealth Average Net Worth (1983-2010) 20-28 I +5% 29-37 I -21% 38-46 +20% 47-55 +76% 56-64 +120% |+79% 65-73 74+ +149% ReverSing Trends of Poverty While senior poverty has decreased by 5%, rates of child poverty have remained higher and virtually unchanged. Under 18 U.S. Poverty (1959-2011) 65 + 1983 22.3% (13.8%) 22.7% 1993 12.2% 17.6%) 2003 10.2% 21.9% 2011 8.7% DRIVERS OF THE GENERATION GẶP Changes in the way government taxes and spends have contributed in shifting more resources to older Americans. 40 years ago, our country invested as Investments in highways, research and education created jobs and prosperity. much money as it transferred to individuals. United tates Treasury But as more money has shifted toward entitlements, less has gone to investments that help grow the economy. A nation of consumption and not investment Federal Government Expenditures (1967-2009) Payments for individuals Investments Entitlement spending is crowding out everything else Mandatory spending, which includes all spending on entitlement programs, is leaving less room in the budget for spending on other priorities. Discretionary Mandatory programs Net interest 38% Total mandatory 65% Total mandatory 78% Total mandatory 61% 35% 22% 1970 2012 2035 Benefits to seniors have almost doubled relative to economic growth. 2010 S47,500 72% $34,500 1970 $28,000 41% % of per capita GOP - benefits as a % of per capita GOP Benefits per senior % of per capita GOP - benefits as a % of per capita GDP Benefits per senior $11,500 BORROWING FROM THE FUTURE What's worse: Washington is spending much more than it collects in taxes and is sticking young people with the tab. [YOU OWEJ How big is the tab? The U.S. has run a budget deficit 31 of the last 35 years. The national debt is really just a fraction of our true indebtedness. iiii $17 TRILLION S.S. Millennial The fiscal gap, which adds the imbalance between future taxes and spending plus interest payments, is a staggering $200,504,905,764,260 Fiscal Gap (in trillions of dollars) 2003 2004 2007 2009 2010 2011 2012 2013 $60 $86 $175 $184 $202 $211 $222 $200 Who is paying the tab? DEBT Older Americans will receive Today's young workers will be stuck with a government benefits far beyond their lifetime contributions. bill far beyond their capacity to pay. Over the course her lifetime, someone who is 65 today will receive an average of IS Future Americans' lifetime net taxes will be $420,600 – a tax burden of 60¢ cents of every dollar they earn. $327,400 more benefits than she paid in taxes. 2013 U.S. Generational Accounts Positive numbers mean people in these age cohorts receive more back from the government than they've paid in. $59,200 $41,900 $26,600 I $6,200 -$14,700 Age 0 Age 5 DEBT Age 10 Age 15 Negative numbers mean those generations will pay more in taxes than they will get back, assuming they must close the fiscal gap. Age 20 - $25,800 I $12,400 I $14,400 $49,400 $87,300 I $138,100 Age 25 Age 30 Age 35 Age 40 DEB Age 45 Age 50 $209,300 I $282,900 Age 55 Age 60 Age 65 | $327,400 Age 70 I $302,300 $268,000 | $236,300 | $205,500 $166,500 Age 75 Age 80 Age 85 Age 90 Age 95 $115,800 Age 100 $30,300 Future Generations $420,600 How can we close the tab? 14 When politicians delay, young people pay. Revenue increases or spending cuts needed to eliminate the fiscal gap for different adjustment starting years Revenue Increase All Non-Interest Spending Cut 54.8 % 36.2 % 59.7 % 38.4 % 65.3 % 41.2% 71.6 % 44.4% 2013 2023 2033 2043 MILLENNIALS CAN'T PAY THAT TAB Today's young workers will be least able to bear the burden being left to them. Lasting Impact of the Great Recession Millennials fortunate enough to get jobs after the Great Recession are earning far less than graduates used to make. A 21-year-old starting a job in 2012 makes 24% less <24% than he or she would have in 2007. Growing Income Gap Median Income (1983-2011) $38.000 25-34 $34,000 55-64 $32,000 $30,000 $28,000 $26,000 $22,000 $20,000 Millennials are missing out on their most important earning years; two-thirds of lifetime wage growth typically happens in the first decade of your career. Unemployment rate by age Student loan$ (June 2013) (1989-2010) 16-24 16.3% $11,927 25-34 7.6% 35-44 5.9% $7,608 $5,054 $3,193 45-54 5.7% 55+ $1,547 $1,555 $2,299 $301 5.3% 15-34 55+ 1989 1992 2010 RESTORING GENERATIONAL EQUITY Our country needs a Grand Generational Bargain that increases investments in the short-term, slows the growth of entitlementspending over the long-term and reforms our antiquated tax code so that we can grow our economy and reduce the deficit. But real solutions will require cooperation between our political leaders and between generations - bipartisanship and generationship. THE CAN KICKS BACK Join the Millennial movement to defeat the national debt and reclaim our American Dream: www.TheCanKicksBack.org. Sources Steuerle, E, McKernan, S., Ratoliffe, C., & Zhang, S. (2013). Lost generations? wealth building among young americans. 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