Monday, March 20, 2006

Forget world hunger; I need a pair of Manolo Blahniks.

Beyond Their Means

Today's young adults are in a bind: so much to buy, so little money.

Reviewed by Amanda Henry

Sunday, March 19, 2006; BW06

STRAPPED

Why America's 20- and 30-Somethings Can't Get Ahead

By Tamara Draut

Doubleday. 277 pp. $22.95

GENERATION DEBT

Why Now Is a Terrible Time To Be Young

By Anya Kamenetz

Riverhead. 265 pp. $23.95

GENER@TION DEBT

Take Control of Your Money -- A How-to Guide

By Carmen Wong Ulrich

Warner Business. 254 pp. Paperback, $12.95

If the threat of dirty bombs, bird flu and melting ice caps isn't enough to keep you up at night, a trio of new books has identified another looming disaster: financial insolvency among today's twenty- and thirty-somethings.

Yes, in spite of their material trappings, from iPods to Xboxes, today's young people are behind the economic eight ball, according to Tamara Draut's Strapped and Anya Kamenetz's Generation Debt . The third book, Carmen Wong Ulrich's Gener@tion Debt , offers fiscal self-help for this emerging niche market.

You say you're more concerned with the plight of the crested shelduck than a flock of latte-guzzling boomerang kids? The authors are aware that their premise goes against the accepted stereotype of spoiled "adultescents" who would rather sponge off their parents than get a real job. Their contention is that the postponement of adulthood may have more to do with socioeconomic conditions than with an epidemic of thumb-sucking fecklessness.

The idea of struggling in your post-student days is nothing new. The problem, according to all three books, is that for today's young adults, those lean early years -- the Top Ramen phase -- may never give way to the stability and prosperity enjoyed by their boomer parents. A number of factors are blamed, chief among them student loans, credit cards, wage stagnation, the rising costs of health care and home ownership, the disappearance of pensions and the likely collapse of Social Security under the weight of all those retiring boomers.

Much of the evidence used to support this bleak scenario, in which young adults can expect to toil away well into their seventies, is persuasive. Inflation-adjusted tuition at public universities has nearly tripled since 1980, while federal student aid has shifted from grants to loans. The average graduating student now carries a debt load of around $20,000 -- and more than double that for grad school. Deregulation of the credit card industry and heavy on-campus marketing of plastic power haven't helped, either.

All of this debt, as well as various other public policies unfriendly to the young, theoretically snowballs into a variety of social effects, from delayed marriage and parenthood to a widening gap between rich and poor.

The more scholarly take on this tale of woe is found in Strapped . Draut, director of the Economic Opportunity Program at the New York-based think tank Demos, offers diverse, thoroughly contextualized case studies with supporting statistical data, as well as the occasional outburst of advocacy. The thirty-something author knows whereof she writes, and occasionally references her own experience. But having already reached some milestones of adulthood -- marriage, career -- she also has some perspective on the situation.

Generation Debt author Kamenetz, on the other hand, is still mired in post-college flux, and her writing has some of the unfiltered indignation of first discovery. This is useful as a window into the angst that accompanies youthful financial and professional uncertainty, but complaints about economic inequality grate a little coming from someone whose parents covered a four-year education at Yale. Nor is it easy to muster much pity for a twenty-something journalist who has already published a book -- Generation Debt is based on her work for the Village Voice -- when she laments that no employer has offered her a job with benefits.

Kamenetz empathizes with the plight of her less fortunate peers and clearly intends her book as a public service, but she doesn't seem entirely aware of her own good fortune -- or the difference between suffering under an oppressive system and not being handed your dream job immediately upon graduation. Whether you call it optimism or a sense of entitlement, that attitude plays into the cliché of a generation of Veruca Salts, clamoring for their golden ticket.

In their rush to absolve young people of primary responsibility for their financial plight, Kamenetz and Draut are too quick to dismiss, or paint as virtues, the cultural and lifestyle factors that affect this generation's bottom line. The middle class may be sinking, but we're going down with plenty of stuff: BlackBerries, beauty treatments, yoga classes, therapy, restaurants, coffee, cable, cell phones and all of the other luxuries now considered staples.

The one failing for which Kamenetz and Draut take their peers to task is a lack of political awareness. Today's young people don't follow the news or vote in large numbers, much less organize to lobby for their interests -- unlike powerful boomer-centric groups such as the AARP.

If they did, they might achieve another of the authors' cherished goals: grafting European social policy onto our free-market economy. A national health care system, tuition assistance and generous family leave and child-care subsidies could be paid for by -- wait for it -- taxing corporations and rolling back individual tax cuts. Penalizing big business to pay for social programs doesn't sound like a top agenda item for a Republican-controlled government, but you never know -- first ethanol, then nine months of paid maternity leave.

While they wait for a new New Deal, impecunious young folk may want to check out the third book in this group. The chatty, accessible Gener@tion Debt skims over much of the same information covered by Strapped and Generation Debt but devotes most of its pages to practical advice for the young and equity-less, from banking and taxes to insurance, investing and home ownership.

The underlying ideas are -- or should be -- intuitive: Spend less than you earn. Make a budget. Save, save, save. There are also guidelines for dealing with specific situations, such as harassment by creditors or identity theft, and day-to-day tips for staying out of money trouble. Leave those credit and debit cards at home when you go out, for one thing, and it'll be a lot harder to blow your budget.

It's a cursory overview, but each chapter ends with a comprehensive list of resources -- mostly of the online variety -- for further information. You won't find the definitive answer to every financial pickle, but it's a good primer based on a sound economic principle: self-control. Ulrich also offers something even more valuable than a free credit report: hope. With a little education and some will power, she suggests, young people don't have to drown in a sea of red ink.

It would be naive, even by the standards of this generation, to think that the sweeping legislative and philosophical changes urged by Draut and Kamenetz will occur overnight. We have a proud national tradition of ignoring depressing predictions, even when the sky is falling (global warming, anyone?). Rather than waiting idly for the deus ex machina of government intervention, it's nice to think that we twenty- and thirty-somethings could exercise a small measure of control over our own destinies -- without moving to Canada. ·

Amanda Henry is a thirty-something journalist who writes for the Tampa Tribune, VH1.com and Public Radio International.

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