Poorer than parents: how the economy has changed young people's political views
On both sides of the Atlantic Ocean, there is a curious process of young people moving en masse to the right side of the political spectrum and increasingly protest voting. One of the reasons for this process, unthinkable even 20 years ago, may be the difficult financial and economic situation of young people, a generation that is poorer and more poorly off than previous ones. The debts of the Zoomers are growing rapidly and wages are rising too slowly. What is the reason for this state of affairs, Izvestia analyzed.
Making the youth great again
One of the unexpected results of the US presidential election was the success of the Republican candidate Donald Trump in the vast majority of strata of society. In particular, a significant breakthrough was achieved among young people.
U.S. President-elect Donald Trump
In the US, young people under 30 have been the electorate of the Democrats in recent decades. This was the case in 2020, when Joe Biden won among voters aged 18-29 by a ratio of 62% to 38%. Four years later, the breakdown was quite different, with Kamala Harris winning in this demographic by just 4 percentage points (51% vs. 47%). This is the worst result for a Democratic candidate since the beginning of the 21st century. And in some categories where the Democrats' superiority has recently been indisputable, such as college-educated white young adults, Trump won. In others (young Hispanics, young women), Trump's advantage has been eroded. But the increase in the number of votes for the Republican candidate compared to 2020 occurred among all subcategories of American youth.
It would be primitive to attribute such a massive shift to a single factor. Young guys' and girls' anxiety about mass immigration, irritation with the woke culture, and the Republican candidate's greater openness through heavy use of social media, blogs, and podcasts all played a role. But at least one important reason was the state of the economy, as confirmed by numerous polls, both pre-election and exit polls - everywhere young people, as well as other categories of the population, had the economy at the top of their list of main topics.
Debt stranglehold
It has been said for quite some time that the current younger generation of Americans will be the first to be poorer than their parents. But only in recent years has this relative disadvantage become apparent to everyone. First and foremost, it is evident in the amount of debt accumulated. For example, the average American Zoomer between the ages of 22 and 24 has $2834 in credit card debt, which is 26% more than Millennials at the same age in 2013 (with all adjustments for inflation). What's more, credit card debt levels are growing faster than any other generation, so this is just the beginning.
It's the same with other measures of debt load. It's growing for auto loans, consumer loans, and mortgages. But most importantly, there's a huge increase in student debt for tuition, although millennials are already having serious trouble with the latter. Nevertheless, the Z-generation has 12-13% higher rates. The student debt forgiveness program has only partially remedied the situation. For the first time, the number of people pursuing higher education has begun to fall - few people want to pay off their tuition debts for decades, especially since it offers fewer guarantees of success (the pay gap between graduates and non-graduates is shrinking), while tuition rates are rising - by 70% in the last 20 years, for example.
Finally, the debt problem is made worse by the fact that interest rates on loans are now very high compared to the previous decade. This applies to both absolute numbers and relative numbers. The real rate of the US Federal Reserve is now as high as 2.5%, the highest level since the late 1980s. But in those days, debt levels were not comparable to those of today. Lower interest rates should help - many people will re-lend, but we still have to wait for that moment.
A vicious circle of profligacy
In addition to the debt problem, the inflationary problem has been added - prices for everything are rising by leaps and bounds, which has not happened for a long time. This mainly concerns such "essential commodity" as housing. For example, the average cost of houses has jumped by 40% since the pandemic began. For tenants, the situation is slightly better: rents rose by 30%. At the same time, average wages increased by only 20% over the corresponding period.
The crisis of price growth in the housing market is associated with an acute shortage of supply. This is primarily true for large American cities with strict zoning regulations. In smaller cities, and especially in states where Republicans rule, zoning is also in place, but there is much more vacant land where new homes can be built. So the problem is not as acute here.
Finally, to some extent, young people themselves are to blame for their difficult financial situation by refusing to save money. Even in conditions when it would be necessary to cut down a little on expenses, they are ready to spend the last of it. This is to some extent connected with the processes described above: if a difficult financial situation does not allow making long-term plans, what is the point of restraining oneself? The result is a very unpleasant vicious circle of waste and poverty, from which it will be difficult for a person to get out. The economy is in a plus moment, which is not the case with the socio-psychological state of society.
All the places are taken
The disillusionment of young people is not only an American phenomenon. It also exists in Europe, but it manifests itself differently. The main problem here is unemployment. The structure of most European economies and labor laws is such that many "bread" places are occupied by age workers until death, which prevents the renewal of personnel and closes the way for young people. This problem was highlighted during the European debt crisis and has not come close to being solved since then. On average, youth unemployment in the European Union is about 14%. Depending on the country, this figure can vary: from 7-8% in Germany to more than 26% in Spain, but in most countries it is at a high level by world standards.
And this does not take into account young people who are not engaged in anything. In Great Britain, for example, the share of young people aged 18-24 who are not represented in economic life in any way is 35%. Some part of them may be involved in the shadow economy, but, firstly, not all of them, and secondly, the shadow economy gives a stable income only to a very small percentage of people involved in it - few people choose this way of earning from a good life.
At the same time, European young people are equally affected by inflation, decreasing housing affordability and, albeit to a lesser extent than in America, rising debts. In addition, unlike in America, European economies are mostly stagnant or in recession (as in Germany, for example), which always hits young people harder. Given that these processes on our side of the Atlantic Ocean began several years earlier, the explosive growth in the popularity of right-wing and far-right parties, for which young people became the main electoral base five years ago, when young people in the United States were still clearly leaning to the left, is not surprising.
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