Age Gap Rises in Economic Well-Being

Why am I less than surprised?

Granted, this is a complex issue. Let me mention one interesting phenomenon that I noticed among my well-off peers as they raised their kids during the past couple decades. These families have and had incomes well into six figures, often with both spouses working full-time as professionals.

I would watch and listen to these successful parents as they talked about their teenagers. “Where’s Susie going to college?” “Oh, I don’t know, County CC or Local JuCo for all I know.” was an all-too-common refrain. “It’s a good deal for me, that’s all I know.” I scratched my head.

These parents, who were college grads (often graduate school level), admitted that they had never drilled into their kids the key role that their college degrees had played in their ultimate success in workplace and life. When their kids ended up flubbing through secondary school and being unqualified for anything more than County CC and Local JuCo, all the parents could think to say was that it wasn’t going to cost them much to put them through.

I guess my kid was one of the lucky ones. I busted my tail to get into and be successful at a Top Tier school. I earned a professional degree and a graduate degree and had workplace success to show for that level of skill. She darn well knew what I felt the keys to my success were.

I pledged to her that if her secondary school performance qualified her for a Top Tier School, I would be there to be sure that finances were not a factor in whether she could attend. She performed appropriately. When my neighbors were on financial easy street with their kids in college, I paid out big time. As a group, they told me I was nuts. “Why did you tell her?” they asked.

Because I couldn’t bear the thought of my kid being a statistic in this article. My kid is smart and well-educated. She is wealthier than I am right now. And, I am not hurting. There’s a huge correlation to education and job success.

One of the reasons that the young are suffering now is that hoards of well-off parents have neglected to motivate them to desire higher education and then to secure for them the kind of education that would keep them out of this mess. They spent their kids education dollars on inappropriately big cars, big homes, and expensive vacations that felt good at the time, and made great conversation around the neighborhood, and left them… well…

I understand that this explains only a part of the 47-fold gap that is the point of this article, but I saw the scenario above play out time after time. It’s wasteful and it didn’t have to happen.

This appears to be the Obama Administration media’s push for this week – the young people are poor … the jobless generation … etc. A desperate attempt to get young voters to join the class warfare battle and therefore vote for the “defender of the poor” Barrack Obama. Unfortunately the numbers don’t lie: Higher unemployment and higher welfare recipients since Obama took office. YOUNG PEOPLE: If you want to stay poor, Vote for Obama. If you want a change, if you want jobs, if yo uwant opportunity, if you want prosperity – change your mind and vote Republican.

Great…now we’ll have protestors in our neighborhoods whining about how it’s not fair that someone who has worked and invested for decades has a nicer house, car, and other stuff. And, the WH is saying that they aren’t promulgating class warfare? No reasonable person could agree with that.

Wealth Gap….the news says that people over 65 have an average net worth of $176,000 and people under 35 have an average net worth of $4,000…..The problem I have with that is that I know few people over 65 with that kind of money unless you are including their houses, cars, investments and bank accounts, and even then, that is high–and it isn’t liquid assets. The other problem I have with those numbers is that people under 35 have typically not bought houses yet, which detracts from net worth, they have ridiculous amounts of debt, which detracts from net worth (debt in the form of credit cards, mostly, which you DON’t have to have to survive, but try to tell the youth of today that little fact), and the over 65 crowd has usually paid off their debts in prep for retirement, and many times that net worth will have to sustain them through the end of their life since they are no longer working usually, while the under 35 crowd is just beginning to think about retirement and saving for the time after they quit working. It also doesn’t factor in the rate of inflation or the fact that over the years, money goes much much much faster, and does not stretch even half as far as it used to. It doesn’t take into consideration that people under 35 are STILL WORKING, so their net worth will have the ability to increase, while those over 65 are NOT WORKING, so their net worth has nowhere to go but down. So in my mind, the media is once again sensationalizing and telling a third of the story, if that much. Occupy Wall Street is fed by innuendo and sensationalist half truths from the media like this one. What is wrong with this country? THE MEDIA.

As a lot of you have said, it would make sense that the 65 plus croud has greater net wealth – given the 30 to 40 years worth of work already put in. What this article fails to mention is opportunity cost and cost of living. Having graduated from an upper tier engineering school in 2007 I was fortunate enough to get a job before the job market really crumbled. Although I am very thankful to be employed, there is a sticking point: due to the economic crisis i’ve been stuck at my starting salary, which is roughly (4 years post graduation) $20,000.00 less than what my peers in the field were making with similiar experience prior to the down turn. It is this gap that won’t be made up unless times change. Also, everyone who had to pay for college themselves is poor post college (still paying) but the cost of college today is expodentially greater than it was in the 80′s.

I am mid-aged and live in a wealthy suburb in CA. Nevertheless, whenever the city needs to pass a parcel tax for schools or road-repair, they opt out seniors 65 and older (with the false assumption that they cannot afford their house. If that were true, they could sell their house and move into an apartment like the rest of us do.) Quit subsidizing the rich pensioner and taxing the poor low-wage guy.
Also, do I need to explain what a disaster Prop13 is in CA too? The young are saddled with huge property tax bills based on their actual property value–whereas the older rich are taxed unfairly-low for purchasing at 1975 prices. To be fair, *all* property should step up from 1975 value (arbitrarily 2%/yr or CPI) to prevent the govt from seizing bubbled unrealized property-values.

I started paying income tax in 1956. I was born poor, but now have a post-doctorate degree. I suppose the OWS crowd would consider me “well-off”. Maybe it’s because “I paid my dues”?

snewsome2997…so how would you propose we fund our local school districts?

Funny how Pew didn’t much look at income sources as a cause of wealth inequality. It talks mostly about real estate effects. This study hardly even mentions govt programs for the elderly.

The Social Security average benefit is $15k per person, and Medicare is $8k, so a retired couple gets $46k in government benefits ever year. In three years they get back everything they have ever paid into SS plus interest; the rest is just welfare for the richest age group in America. And these people no longer have the major expenses of raising families and paying mortgages.

I’m all for SS paying back what was contributed, but after that it should end unless the recipient is actually poor. Why are the young buying vacation houses for the retired?

OLDFELLA | NOVEMBER 7, 2011, 12:50 AM 12:50 AM……IMHO, you do deserve credit for a part of your child’ success, but not in the college she got into. Your hard work, drive, and ethics were observed and emulated by your child. A college degree from school A versus school B gets one’s foot in the door, but how much “education” is used directly in one’s job? After that it is the individual’s drive/ambition/motivation, hard work, and a little luck that determine the outcome.

Posted by: deanbob—Because you house is only worth what others are willing to pay for it. St Louis is notorious for shady appraisals, they only do it every 2 years 2007 was one year, so people were paying taxes on the 2007 value of their home in 2009, and not the 2009 value of their home, which had dropped 20-40% from the 2007 levels. Also what one individual thinks your home is worth is completely different from what another individual will, and the same goes for those that appraise the value of the homes.