The losing generation

A new book says that minimum-wage jobs and mounting debt are burying America's youth.

Published February 21, 2006 12:37PM (EST)

When Anya Kamenetz, 25, graduated from college in the spring of 2002, the United States was still reeling from Sept. 11, the tech industry was going bust and the employment market was stagnant. Though Kamenetz -- having been raised in a middle-class family that helped her pay for school without acquiring debt -- knew she was better off than most, she found the transient lifestyle of freelance work and infrequent paychecks frightening. And all around her peers were facing the same woes: few promising job prospects, hemorrhaging credit card bills and five-figure student loans. She began to wonder if the American dream -- of upward mobility, family security and employer-subsidized healthcare -- was for the first time ever falling out of reach.

It is the same question she asks in a new book, "Generation Debt: Why Now Is a Terrible Time to Be Young." An investigative look at the financial pressures facing America's youth, the stories in "Generation Debt" sound a refrain that may be familiar to many of today's twenty-somethings. "[It is] layoffs. Underemployment. Flat incomes," Kamenetz writes. "No health insurance, no retirement plan, no paid vacation. Unaffordable housing. Moving back in with Mom. Turning 30 with negative savings and no assets. Putting off marriage or kids because they can't afford them."

In the book, we meet Sean, a 23-year-old from New York with a B.A. in psychology who temped and delivered pizzas for a year in Vermont before moving back to his parents' home and taking a position at a marketing firm that paid $10 an hour with no benefits. And Nita, who at 24 has been in and out of college for six years, unable to balance out her tuition payments and $10,000 credit card debt with a stream of low-paying, uninsured jobs at Pier One, Borders and Home Depot. Then there's Dan, a 33-year-old Ph.D. dropout who after a few years of dead-end, entry-level jobs moved back into his parents' Michigan home to care for his blind father and ailing mother; he fears he may never have the private pensions, home equity or Social Security payments they do.

Kamenetz also takes on cultural pundits who would pigeonhole her peers as "twixters" -- apathetic, materialistic video-game addicts who are unwilling to commit to careers. She expresses hope that her book might be a call to action that helps her generation become involved in the education, healthcare and Social Security reform decisions that are being made right now and that will certainly shape their future.

I spoke with Kamenetz at Salon's New York office about some of the psychological motivations behind consumer spending, the changing American workplace, the future of student loans and whether now is really such a terrible time to be young.

What made you decide to write this book?

When I started working after college, my editor at the Village Voice was working on some of these ideas -- about the politics of being young and the economics of being young. "Generation Debt" was actually her coinage. And you know, [the work] really connected the dots for me. I saw that it was the real youth politics. Young people do feel left out of the consensus and left out of the political conversation, and feel like their needs are not being addressed. I started talking to people who were saying there are bread-and-butter concerns that affect young people as a class -- putting food on the table, paying the rent, paying the bills, being able to get somewhere, being safe, being able to raise a family. It's all of those things.

I know that to a degree, there is a certain amount of hyperbole involved in selling a book, but --

Oh, do you mean the book's subtitle?

Yes. Your subtitle is: "Why Today Is a Terrible Time to Be Young." I mean, is it really that bad?

You know, I actually fought with people over the subtitle. [The publisher] originally wanted to call it the "worst" time, but it is just not the worst. Of course, it is trying to get people to pay attention. What it is all really about for me is realizing that we are part of the first generation in America that does not expect to and probably won't do better than our parents. It's about taking a step down, and that is a feeling that is terrifying. The American dream has always been about progress and about going up and up -- but we are not making as much money as our parents, and maybe we are a little bit less educated than our parents. We are not achieving the milestones of adulthood at the same time that they did.

So we have to compare it to our own standards, we can't compare it to a global standard? Because, of course, we are not being forced to be child soldiers or work in factories --

Right. In America, there are no people living on a dollar a day. Even homeless people on the streets in New York are better off than people in Mali. American life has always represented the dream of freedom to the world. So it seems like a horrible breaking down of expectations for us to make that comparison because that's not how it is supposed to be. America is supposed to be the leader.

At one point in the book, you seem to criticize baby boomers for being irresponsible about the future. But as the children of boomers, aren't many "twixters" caught in the same cycle of entitlement?

It is really a tension. But that conversation takes place in the corridor of affluence, and there are a lot of people who don't have the expectation of affluence. I tried very hard to make sure other kinds of stories were told.

I just read the book "Money: A Memoir," and in it the author, Liz Perle, says we spend to feel safe but instead we chip away at the ground beneath our feet. And nowadays that is a pathology that characterizes all of American culture, all of consumerism. The kids are just as bad as the parents and the parents are just as bad as the kids, and I think we are all caught up in it. It's about someone like me realizing that I never learned what it actually means to be able to afford something.

Do you think that young people are more in a hurry to have the material trappings of adulthood? Shouldn't there be a period when you just eat macaroni and cheese?

These days, when you are 21, you can get a credit card and you can use it to fly to Miami on spring break. People do that because they see their friends doing it and that is the normal thing to do, but it's a mistake. At the same time, these people are also going home and eating Ramen noodles. It's schizophrenic. For instance, everyone has cable TV now. Even very poor people have cable TV. And there is this whole shadow credit economy where no matter how badly off you are, you can buy a big-screen TV. It's messed up.

I think it is important to keep an eye on the bigger picture. Everybody naturally falls into anecdotes. But when people say, "Well I was a student and I worked a minimum-wage job, big deal," it is exactly what conservatives want to hear: that somehow all minimum-wage workers are students. And then we don't see the other side of that life -- that not all minimum-wage workers are doing it because they need to fill time over a summer vacation, and that there really is a difference.

Some older people might say our generation has the freedom to be indecisive compared with our parents, who were more soundly drilled with the idea that you have to get out of college, start a career and stick with it. Is that our tradeoff?

Again, it depends on who you're talking about. The average age of a college student is about 26. So for a lot of people that exploring just doesn't exist. People are working and going to school, and are dropping out of school and going back. And for the people who do graduate from college -- you know, speaking for myself -- you get out of college and realize there are no good jobs in the field you wanted to pursue. So you think, maybe I'll go back to grad school; maybe I can try this and maybe I can try that. We are always looking for the sure thing, the way that we can get back to the security that our parents enjoyed.

You talk about the fact that the part-time, low-skill jobs in retail, in restaurants, are not new and in fact have always been a part of young people's lives. But because conglomerates have taken the place of many independent businesses, the nature of those jobs has changed -- making them more impersonal and dead-end. Is this a story not only about the changing face of the young workforce but about the changing face of American business?

Absolutely. Businesses at every level are slaves to quarterly earnings. And as soon as the earnings go down, they have to cut jobs. So they have to make their jobs interchangeable; they have to lower the quality of the jobs until they're all mass-produced.

On a practical level, when you have 50 to 100 percent turnover every year, personal concern for your workers is going to go by the wayside. I did a story about union organizers at Starbucks. They talked about this all the time, and I was really shocked. Because some of them were single mothers and some had kids on Medicaid, but what they always talked about was the fact that they got no respect at work. They'd complain, saying, "I get written up for this or for that. I can't wear earrings. I am not treated like a person."

You criticize some parents for judging a generation to which they don't belong. But isn't it also hard to write about this from the inside? Do you worry about not having perspective?

Absolutely. I wrote the book at an emotional moment, and coming upon all this information and hearing people's stories ignited a lot of passion for me. I did not write it to indict a generation. Everyone in America needs to work together to get out of this. What I hope, and what I say to my parents, is that we are your children, we are your caretakers, we are the workforce that is going to shoulder the burden when you retire, and therefore it is in everyone's interest that we get the best start that we can. The reality is that parents support their children; they are supporting them more than ever before. And they are shaking their heads and wondering why this is happening.

Many of your interviewees are truly impoverished. But what is complicated is that again and again in your stories there seems to be a moment or period of irresponsibility -- a spending binge on a trip, a car. What happens first: young people making occasional bad decisions or the credit card companies targeting them?

I am not in a position to judge. I think everyone in this book made some mistakes somewhere along the way. But what I am trying to do by choosing such a diverse group is to show that it does not matter where you come from, there are similar patterns that affect almost everyone. It's true that I don't think that it is a good idea to put a $10,000 credit line in the hands of someone who is already unavoidably in debt. Because that's the thing -- when you have to borrow money to get into college, just as you take your first step toward independence, already you are a debtor. And it changes your psychology. For a lot of people, it is a rationalization that makes it much easier for them to owe on credit cards.

Because it lets them say, "Well, I already owe $25,000, what's another five grand?

Right, you get that all the time. I have friends in law school, and everything they do, every penny they spend, they are going to pay two pennies on in the future while they are living on their loans. But that is just an impossible mind frame to be in when you are young and you want to have fun.

Some economic bigwigs, like Alan Greenspan for instance, say that financial management should be a required high school class. What do you think?

Absolutely. You can compare it to sex education vs. what you learn in the schoolyard. With sex education, what you learn in the schoolyard might not be healthy and balanced, but you get the basic mechanics right. But with financial education, what we pick up is totally harmful. We hear, "Have fun now, take your credit card and your free frisbee, look at TV, watch 'MTV Cribs.'" We are told we should have everything immediately, and that is what life is all about. So, yeah, I think we need a countering cultural force.

Why do you think that that sort of education is needed now in a way that it was not in the past. How is this generation different?

The American economy has been moving on the consumption engine for about 50 years and it has slowly been accelerating. The cultural base that we used to have of honesty -- the depression mindset, you could call it -- is just gently eroding underneath us. Everything in the economy is trying to make us spend more. The growth in consumer spending is entirely financed by the growth in consumer debt.

And it is so frustrating because federal regulation can so easily stop it. We are one law away from ending people's hell. But I think there are a lot of dominoes resting there because, like I said, you can't overstate the importance of consumer spending to the economy.

So, we want it.

We need it. We can't live without it. What is Apple going to do if you can no longer buy a $200 iPod?

You talk a lot about the problem of paying for school and how tuition assistance has shifted to put a bigger burden on students. Do you think universities, especially private universities with big endowments, should be pressured to cut tuition?

Actually, last spring there was this tuition movement at Yale -- my alma mater -- where they had a sit-in at the president's office and students got him to change the payment requirements for a family earning under $45,000 a year. I think that's great. And it's happened at almost all the Ivy League schools now, though obviously there's a limit to how many students that will reach.

The problem is that the public universities where most people go to school don't have the power to do that because they depend on state support. And I would hate for people to point it out and say, See it's no problem, you can just go to Harvard. But if you don't go to Harvard, well, off to the vocational school with you.

Researching this book really made me realize that my opinions about college were patronizing and wrong. There are a lot of images in our society about what it means to go to college and what a good college is -- and there is an insanity about it in certain affluent pockets. I think what kids really need to learn is how to manage their money, how to live within themselves and find out what type of work they really want to do. Filling out the perfect college application and going to the perfect green campus are not going to solve that for us. There are a lot of people, I think, who aspire to college who should maybe think differently about their choices.

Because what is really getting painful and cruel now is that about half the people who go to college are not finishing, which has never happened before. The number of people who are going to college has doubled, but the percentage of people who have graduated has stayed the same. I couldn't figure out how that made sense, and finally someone pointed out to me that up to 50 percent of students don't finish. Well, then maybe they shouldn't have done it. It's not that I want to discourage anyone from going, but I do think there needs to be a clearer understanding of the costs and benefits, instead of this monolithic idea that college is the only path to success.

But don't you think that in most cases higher education, when you finish it, does pay off?

Of course, I am not saying that college is not important. In my perfect society, more people would go to college because I think it is an enriching and wonderful experience. Ideally, I would like to see an educated citizenry that plays piano and speaks French and enjoys all the benefits of a liberal education. But it doesn't necessarily pay off financially, and you can't expect it to. That is basically the point. On the average it does, but there's no guarantee. And the problem is, the people who face the most challenges in going to college are also the ones who are at the most risk for not succeeding. The real point is that we are ending up with a less upwardly mobile society because the barriers to education are so high -- when really they should be the pathways to security.

I interviewed a few people who told me they actually regretted going to college. One woman was over $47,000 in debt from tuition she charged on her credit cards while studying as an English major. After all that, she went on to have a successful career as a chef, but she told me that if she could do it over again she wouldn't have gone to school.

You talk about the generation's debt as both a spiritual and an economic problem. What do you mean when you call it spiritual?

Coming through your 20s and establishing your place in the world, you look around and say, "What place is there for me?" And I think part of the feeling of debt is feeling that you have a lot of holes to fill, that there are a lot of obligations you have to meet by virtue of your moment in history. So there is basically a sense of having debts that have been taken out on yourself that you have to pay off. There is so much uncertainty, and there is a fear that we may be at a pinnacle and we are going to go down.

And you think that is somehow unique to now?

No, not necessarily --

Because you could argue that that is just characteristic of youth.

Absolutely. And there are times in history when people feel like everything is ending and there are times in history when people think that everything is beginning. And it is cyclical and it is characteristic of youth. I guess I go back to what it means to be an American now -- and I feel like so many generations of Americans were born expecting to inherit the world and we are just not.

But is that necessarily so terrible?

No, no, it's not a tragedy. Look, my life is not a tragedy; I am a very happy person. I think there is a lot of room for people who are going to live very happy lives in the country that is coming up, but there are things that are going to be lost. We used to have a very privileged view of our place in the world and really believe that the values of freedom and social mobility were our birthrights. Now, it may be that we evolve into a more global understanding of our place in the world. But I wonder what will happen to those ideals when they're not linked to our own success and about building a better world for our children and ourselves.

How can we try to fix things?

First by removing billions of dollars of subsidies to banks and returning to the direct-loan program that was instituted by President Clinton in 1993 -- which is much, much cheaper -- and then diverting the billions of dollars saved (something like $60 billion over the next 10 years) to grants. And you have to get universities on board, which is very hard because you need to call on the state government and universities and private philanthropies and, increasingly, private corporations too. And all of those forces need to come down and tell universities they can no longer raise their tuitions in a vacuum.

There also needs to be an integration of community colleges into the state college system because their role is incredibly important and they are the ones on the front lines. Forty-two percent of college students are at community colleges. So obviously they need to be a bigger priority when it comes to college funding and the whole discussion about it.

Do you think those kinds of federal, state and local changes might also affect personal consumer behavior?

They might. I mean, if you change the paradigm and you don't force people to go into debt, then they have the opportunity to realize they have a choice. They have a real decision over whether or not they are going to have a credit card. And hopefully you make it harder for them to get one.

By Sarah Karnasiewicz

Sarah Karnasiewicz is a freelance writer and photographer based in Brooklyn, N.Y. Until recently, she was senior editor at Saveur magazine; prior to that she was deputy Life editor at Salon. She has contributed to the New York Times, the New York Observer and Rolling Stone, among other publications. For more of her work, visit and Signs and Wonders.

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