A New Deal of Their Own: Social Policy Once Helped the Young Join the Middle Class. Today, Government Aid Is Mainly for the Elderly and the Poor

By Starr, Paul | The American Prospect, March 2008 | Go to article overview

A New Deal of Their Own: Social Policy Once Helped the Young Join the Middle Class. Today, Government Aid Is Mainly for the Elderly and the Poor


Starr, Paul, The American Prospect


AMERICA DOES NOT DO WELL BY its young. For years government data and social-science research have demonstrated persistently high levels of poverty and related problems among children. In a UNICEF study last year measuring the well-being of children and adolescents in 21 rich countries, the United States ranked next to last. According to U.S. Census Bureau data, 17 percent of children in 2006 were growing up in families with incomes below the poverty line--just about the same proportion as in the 1970s.

What's less widely appreciated is that the problems afflicting children now extend into young adulthood. For roughly 30 years after World War II, young workers shared in economic growth, but since the 1970s they've lost ground. In 1967, according to research by Andrew Sum and his colleagues at Northeastern University, young men ages 18 to 24 who were employed full-time earned 74 percent as much as men 25 years of age and older, but by 2004, they were making only 52 percent as much. Young workers, especially if they haven't gone to college, are now also less likely to find long-term, stable jobs with health insurance and other fringe benefits; partly for that reason, many are taking longer to start families, as Sheldon Danziger and Cecilia Rouse point out in the introduction to The Price of Independence, a new book on the economics of early adulthood. Between 1973 and 2004, median real weekly earnings dropped 27 percent for young men and 9 percent for young women.

The persistent problems affecting children and the deteriorating economic position of young adults stand in contrast to the historic improvement in the well-being of the elderly during the same period. As late as 1965, 30 percent of the elderly lived in poverty. But in good part due to public policy--particularly the growth of Social Security benefits and the introduction of Medicare and its continued expansion, most recently in prescription-drug benefits--the proportion of seniors in poverty has been cut by two-thirds, dropping to 9.4 percent in 2006.

As this contrast suggests, the difficulties facing the young generally--both children and young adults--are the result of long-standing limitations in social policy whose effects have been aggravated by recent changes in the economy and the family. The three great waves of social reform since the 1930s--the New Deal, the post-World War II GI Bill, and the Great Society--failed to establish durable policies in support of the young.

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The New Deal did provide some assistance targeted to young adults, such as jobs in the Civilian Conservation Corps and the National Youth Administration and the provisions of Social Security that were originally conceived as aiding widows and their children. The youth employment programs were shut down between 1940 and 1945, however, and Aid to Families with Dependent Children evolved into welfare for single mothers and was cut back sharply in the 1990s. The survivors' benefits in Social Security do represent an important source of support for children at risk of a collapse in their family's living standards. But, particularly in fiscal terms, the greatest legacy of the New Deal is old-age pensions.

The GI Bill, in contrast, was targeted primarily to young adults. Educational assistance, home loans, and health care for veterans after World War II provided a great boost to the generation that came home from the war. And because spending for primary and secondary schools also jumped during the baby boom, social expenditures overall had a strong tilt in favor of the young. By its nature, however, the GI Bill was temporary; even though the United States has since been at war, young veterans have represented a much smaller proportion of their age cohort, and veterans' programs today cannot serve the broad purposes they did in the late 194Os.

Despite its initial focus on economic opportunity, the Great Society also did not create a durable source of social investment in the young.

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