the stunning fall of GenX, in charts

http://www.businessinsider.com/generation-x-least-prepared-for-retirement-charts-2013-5?op=1 D - also shows early vs late boomers- useful. D- and a dozen more charts as nice as this one! Great article.

impact of interest rate on student loans on bankruptcy rate, historically. enlightened Aussie policy.

http://money.cnn.com/2013/05/28/pf/college/student-loan-rates/index.html?hpt=hp_t3 D - things are about to get tougher for American poor student grads. "So the odds are about 7 million students taking out subsidized loans for the next school year will face bigger balances when they start paying off their loans after graduation. "Nothing will happen. They won't agree," said Matthew Chingos, an education policy fellow at the Brookings Institution. "And the rate will sunset back to 6.8%." " D - about what we charge our grads - a source of great shame for us. " The rate hike will only affect a third of all undergraduate students who have subsidized loans, in which the federal government absorbs some of the interest rate. Those are awarded based on economic need... To pay for the program, Democrats say Congress could get rid of tax breaks for the oil and gas industry. House Republicans aren't so keen on that. Even newcomer Sen. Elizabeth Warren has a proposal on student loans, although it hasn't made much headway. She would, for one year, shrink student loan interest rates to just 0.75%, the same as the the Fed's discount window to banks. Student debt has become a pressing issue with many young people looking for jobs. It is second only to mortgages as the largest debt consumers carry. In 2011, students on average owed nearly $27,000 in loans. " D - Big Oil comes before students. Oil has an effective lobbying presence in Washington. http://www.nakedcapitalism.com/wp-content/uploads/2013/03/STUDENT-LOANS-VS-CREDIT-CARDS_0.jpg D - American students were already in big trouble. ----- D - I had a stray thought the other day that kept me from going back to sleep. The theory was that spikes in interest rates over the last few decades resulted in Boomers defaulting on their relatively negligible student loans. While I could not tease apart the consumer bankruptcies without a whole lot more research, my theory tentatively held up. D- try to focus in on just a single decade at a time. Folks plan in a time span of a few years. So those spikes, though not a big deal compared to late 70's hyperinflation, still serve to disrupt financial planning, since it leaves folks overextended. http://www.ic.gc.ca/eic/site/oca-bc.nsf/vwapj/fig7_8e.gif/$FILE/fig7_8e.gif D - notice there is a lag of a year or three between interest rate spikes, and consumer bankruptcies. But there is a strong correlation - causative. D - wages for youth and young adults have not kept pace with inflation, let alone tuitions. D - messy chart, but just imagine a line drawn through the averaged point for college and university respectively. Also, notice how the chart amplifies every single percent. D - in conclusion, the relatively modest student debt of Boomer grads, combined with interest rate spikes, contributed to student defaults on loans, and bankruptcies. The last one, in the late 80s/early 90s, set the stage for harsh new measures for genX. These include removing grants in 1991 (my 1st year - lucky!). Also, by the mid-late 90s, not allowing bankruptcy upon graduation (within a year of me finishing school- hooray AGAIN!). Contrast our short-sighted and cheap position on student loans with the enlightened and long-term one of the Australian student loan architect: http://theconversation.com/architect-of-student-loan-system-unconcerned-by-record-debt-levels-11698 "The architect of Australia’s student loan system has poured cold water on a report highlighting record levels of student debt, saying he would not be surprised if a fifth of all student debt was never repaid... “Why should anyone care about the the size of the debt? We don’t care about the size of the debt, we care about people’s access to the system,” he said. “Of course you accumulate a big stock of debt, because there are so many graduates.” Professor Chapman, whose original paper led to wide-ranging reforms under former education minister John Dawkins, said the HECS system was designed with the assumption that about 20% of Australia’s student debt would never be repaid. “It was built into the system. Of course if people don’t have the money, they don’t repay and that’s part of the consequence of an income-contingent debt,” he said. “How much do you think the housing debt in Australia is? There has to be hundreds of billions in the stock of debt from housing mortgages and we don’t worry about that,” he said. It is better to have high levels of student debt than to lock poorer students out of education by demanding upfront fees for education, he said." D - contrast with our determination to extract our pound of flesh from student grads. What a difference...

the cavalier sense of entitlement to Old Age Security (OAS) of the middle and even lower-upper class

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/how-to-beat-the-retirement-clawback/article8641085/ For 2013, the government starts clawing back OAS benefits when your net income exceeds $70,954. “That’s a healthy income in retirement,” said Jason Watt, an Edmonton-based trainer of financial advisers. “I like to joke that, at that level, you’re not eating cat food.” OAS benefits are completely offset by the clawback with an income of $114,640. Human Resources Social Development Canada issued some figures a few years ago showing just 5 per cent of Canadians were affected by the clawback, and that 2 per cent lost their benefit entirely. -- D - cat food. Haha. Hahaha. ... Grr. ------ http://www.civilization.ca/cmc/exhibitions/hist/pensions/cpp-a90-dl_e.shtml D - too bad we are not similarly concerned about child poverty. All those multiparty resolutions on that quietly fail, and nobody mentions them again. http://www.ccdonline.ca/media/humanrights/chart-poverty-report3.gif

Expanded CPP, part 2

http://www.thestar.com/opinion/commentary/2013/05/26/seize_the_day_on_the_cpp.html

" The whole notion that employers have any obligation to help ensure a decent income after work — something taken for granted a generation ago — is now in question.
... Wages for middle-income earners have been stagnant for 25 years. One third of family units have no workplace pensions or private pension assets such as RRSPs...

 Canadian Federation for Independent Business (CFIB). Setting up a PRPP is completely voluntary and a majority of employers will choose not to offer them to employees. Dan Kelly, president of the CFIB...

Kelly’s organization wants taxpayers to foot the bill for providing assistance to retirees who do not have adequate pensions. This is actually a tax subsidy to those businesses who refuse to provide pensions for their workers. Those companies are, in effect, asking people who pay taxes to give them a free lunch.          

(versus - D)

The Canadian Labour Congress advocates a gradual doubling of Canada Pension Plan benefits. We began this campaign several years ago because we were convinced that it is easily the best way to provide for retirement security... A modest increase in CPP contributions will produce thousands of dollars a year in extra benefits for workers when they retire. If we phase in a small premium increase over seven years, it would result in a future doubling of maximum benefits... 

In fact, the CPP offers every Canadian worker $2 of savings for every $1 they put in. That’s quite a deal..."

------------------

D - a few observations:

1) wages have been stagnant for '25 years' - we only noticed this now, why? (See later- rhetorical.)

2) 1/3 of families have no RRSPs (as if this is new) - look at this chart. It is complex in the details - see the per-age category breakdown. A generalized trend is hard to suss out of it.

3) CLC - 'phase in a small premium increase over seven years'...

Why now? Cuz the Boomers are retiring. The oldest at 65 started in the last 1-2 years.

Meaning later Boomers will merely be clipped by the changes.

Whereas Generation X (and Y and then Z later) will bear the brunt of it.

Our older dinner date ordered the lobster, excused themself to the bathroom, then bolted and left us with the bill. Again.

If the Boomers wanted higher benefits in retirement, then they should have asked for higher premiums. A generation ago. THIS is a sore abuse of the 'each generation picks up the next's bill' arrangement. This is cold, hard lobbying. It's selfish and manipulative. And immoral.

As it is, the Boomers only paid the new higher 10% CPP payin rate for HALF their working careers.

This is just more of the same.

The Boomers have #s (biggest demographic), organization ( CARP - now that it has shed any veneer of actually being for retirees, instead being a callous Boomer lobby group) and participation (they VOTE).

They realized that nobody can stop them. And so. They are taking it all. Everything on the banquet table, taking it with them. Leaving a few breadcrumbs on the floor for the generations that follow.

Thanks for nothing.

(The small biz and labour versions only vary in nuance - social class, career. They share the GENERATIONAL analysis - something as powerful as gender in feminism as a tool...)