The American System Isn’t Working for the Country’s Best Interests
America’s economy is in dire need of an overhaul. This is especially evident when you look at the wealth gap between young and old in this country. The growing gap is not just a product of the recent downturn, but also of the exodus of good jobs out of the United States over recent decades.
An analysis of census data found that an average household headed by someone 65 or older has a net worth 47 times that of a household headed by someone under 35. While the median net worth for those 65 and older was over $170,000, the median net worth for households under 35 was roughly $3,600. While it makes sense that those who have lived longer have accumulated more, this disparity is much greater than it has been in the past. Even from 2005 to present, this gap has approximately doubled.
Some economists have spoken out on the discrepancy, noting that we have major safety nets for the nation’s seniors, but few for those in younger age brackets. But those in younger age brackets do not need a safety net nearly as badly as they need good jobs to provide for their families. While many of those in the 65 and up age category had good job options with only a high school diploma, even an advanced degree does not guarantee financial success today.
While there are many factors that contribute to this, one of the major factors has been the offshoring of our jobs due to free trade agreements. “Free trade” is uncontrolled, unrestricted access to our economy by foreign producers whose wage rates may be as low as $4 per hour, tariff-free, about which the American worker can’t compete.
Many of our middle class manufacturing jobs have been relocated to low-wage countries, where goods are produced and shipped back to us. This means that instead of money spent on those goods staying in the U.S. and creating more jobs for Americans, a large amount of the money we spend is sent overseas to the benefit these foreign countries, to our detriment. It is difficult if not impossible to support communities where individuals can build net worth under those conditions.
The wealth of the older generations is not the result of some inherent quality in the people that comprise them, but rather one of conditions. New workers entering the workforce today face an uphill battle to gain even a portion of the standard of living that was once a given. We need to make policy that recognizes this fact or this disparity will continue to grow.