An entire generation remains locked out of the middle class, a new report states. And as you may have guessed, the government has a lot to do with it.
Researchers at the Organization for Economic Co-operation and Development (OECD) found that millennials around the world are struggling because of slow income growth, especially as the costs of housing continue to skyrocket. However, things in America appear particularly troubling.
Because of their sizeable student loans, researchers found, young men and women are finding it hard to either climb the income ladder or remain in the middle class. Baby boomers are likely to be in the middle class, as 68 percent of them remain in the middle-income brackets. Only 60 percent of millennials around the world are in the same position on average, with only 53 percent in the U.S. clinging to their middle-class position.
When compared to countries like the U.K. or Australia, American millennials are in a particularly bad position. But how is that possible? After all, it is the millennial generation that drives the economy.
To answer this question, we must first look at the world millennials were brought into and how it shaped their decisions.
Decades of Government Intervention
Higher education has never been this expensive. That means that millennials got the worst of it, learning the hard way that taking on a student loan in exchange for a degree wouldn’t necessarily pay off in the end.
As they would soon find out, becoming the most well-educated generation in history would do nothing to boost their income. Quite the contrary: a great number of these highly educated young men and women felt their degrees were useless the minute they entered the labor market.
With college becoming so easily accessible thanks to the government’s long history of intervention in the loan industry, the demand for higher education shot up. But as the artificial demand went up, so did the costs of college. As more students rushed to universities across the country, they also ended up amassing a great deal of debt. Later, as they left college, they quickly noticed the job market was saturated with fresh faces. That meant that their wages were driven down, thanks in part to how many people were obtaining the same types of degrees and that finding positions in their fields wasn’t always a possibility.
If the market hadn’t been meddled with, only a fraction of people who decided to go to college would have done so in the first place. In that case, college costs wouldn’t have risen as much and degrees wouldn’t be as worthless as they now are. But because of politics, elected officials repeatedly adopted the “college is for everyone” rhetoric. In an age when politics is one of the few things that ignite people’s passions, it isn’t shocking to see that young men and women would be so easily swayed into believing that a college degree would be their golden ticket to a bright future.
Unfortunately, as millennials expect to die in debt, it becomes clear that many made a mistake when they chose to take on a student loan. This reality is prompting politicians to push policies that expand the government’s involvement in the loan business. If they get their way, expect to see things get even worse, with yet another generation of young Americans falling for the “college for all” narrative.
As millennials struggle to pay off their debt, buying a home and building a family both become a distant dream. Thankfully, we can use data provided by the OECD to urge others to look at the student-loan crisis from a different perspective. Perhaps in time, more will realize that our reliance on the state is why we’re in trouble.