Stuck at the bottom and no way up

THE ECONOMIC clock has been running backward for millions of working-class Americans. But for the coming generation of young workers, the situation is especially hard.

The idea of the American Dream for workers--including the expectation that each generation would be able to do better than the previous one--was always an exaggeration that left out important parts of the working class, especially people of color.

But in today's world, the "American Dream" has become an American nightmare for almost all working people--and nowhere more so than for young workers who can't even look forward to holding their own, but instead face a much harder life than that of their parents.

Last summer, the AFL-CIO issued a report titled Young Workers: A Lost Decade. The report compared the conditions in 2009 for workers under the age of 35 with figures from 10 years earlier. It found that on nearly every front, young workers had lost substantial economic ground. According to the study:

Nearly a third of young workers reported being uninsured in 2009 compared to less than a quarter in 1999.

Some 31 percent reported that they were just making enough money to cover basic expenses (without putting aside any savings) and 24 percent reported their income was insufficient to cover basic expenses.

More than one-third reported that they were still living at home.

Only 58 percent reported having paid sick days at work, and only 41 percent reported paid family leave at work.

Almost two in five young workers delayed education because of their financial situation.

One in five reported that they were overqualified for their current job.

THE FINDINGS in A Lost Decade echo earlier reports, such as The Economic State of Young America, from the liberal Demos think tank in 2008. That study showed that median annual income for male workers aged 25 to 34 had plummeted from $43,416 a year in 1975 (in 2004 inflation-adjusted dollars) to $35,100 in 2004. Income for young women workers essentially stagnated. For African Americans and Latinos of both genders, the income situation was far worse.

As income declined for young workers, debt has skyrocketed.

One reason for this is rising tuition costs. Tuition costs doubled at public four-year universities between the 1970s and the 2000s. At some schools, tuition doubled again in the 2000s alone. Secondly, young workers turned to credit cards to keep up their standard of living, and to get through emergencies like layoffs and car repairs, or pay for health care.

By 2004, 25- to 34-year-olds were spending an average of 25 cents on the dollar on debt payments, and the average person under the age of 34 owed more than $8,000 in credit card debts. The average student loan debt in 2004 was $14,671.

Millions of young workers took on this debt with the hope that once they got a degree or made their way up the job ladder, they would be able to pay it off. The Great Recession has all but destroyed that hope, at least for now.

A Lost Decade also illustrates a growing pessimism about the economy among this generation. Over the 2000s, according to the report, the number of young workers who said they were "more hopeful than worried about their economic future" dropped by 22 percent--although a slim majority still reported being "more hopeful than worried."

In December 2009, I conducted a survey of students at Southern Illinois University (SIU) in Carbondale, Ill.--a mostly working-class campus in downstate Illinois. In my study, 58 percent of respondents felt their economic prospects were either "much worse" or "somewhat worse" than previous generations.

The crisis facing young workers in the U.S. is reflected globally. The International Labor Organization (ILO) issued a January report showing that global unemployment had reached record levels. Young workers specifically showed the biggest increase in joblessness since comparable records began being kept in 1991.

The job market is a nightmare, but the "ivory tower" provides little shelter. With the recession producing budget shortfalls in state after state, funding for education and student financial aid is drying up, and tuition continues to go up. As the Los Angeles Times reported:

Florida college students could face yearly 15 percent tuition hikes for years, and University of Illinois students will pay at least 9 percent more. The University of Washington will charge 14 percent more at its flagship campus. And in California, tuition increases of more than 30 percent sparked protests reminiscent of the 1960s.

In Illinois and Minnesota, important need-based financial aid programs are going unfunded. In January, Mississippi decided to increase tuition between 4.5 and 9 percent next fall.

From every direction young workers are being squeezed.

THERE IS a bright spot in this otherwise dim picture. Young workers today are facing the worst conditions of any group of young workers in generations, but they also tend to think more collectively about the economy and the means for solving the problems that face them.

According to A Lost Decade, a majority of young workers favor expanding public investment over reducing budget deficits--though you would never know it by listening to Barack Obama or the Republicans in Washington. A majority of young people blame Wall Street and Corporate CEOs for the economic crisis.

A 2008 study titled "The Progressive Generation," by the liberal Center for American Progress, bore out these conclusions. It found that young workers were more likely to support universal health care than any age group in decades. Almost 90 percent thought the government should spend more on health care, even if this meant raising taxes. Some 95 percent thought that education funding should be increased, and a majority believed the government should provide more services in general.

In my study of SIU students, 67 percent agreed that the government had a responsibility to "provide education, health care, housing and food assistance to working people and the poor." Some 69 percent agreed that the rich get richer at the expense of the majority, and that there was too much income inequality in the U.S.

A majority favored taxing the rich to redistribute wealth--and a similar number agreed that "politicians use racism, sexism and homophobia to divide working people, so that they won't blame corporations and the rich for their problems."

This certainly isn't the "big government bad" mantra that we see repeated ad infinitum by tea baggers on cable television news.

Even the idea of socialism has made a comeback among millions of workers. Last April, a Rasmussen poll showed that 33 percent of younger respondents preferred socialism to capitalism. This year, a Gallup poll found that a majority of people who identified themselves as Democratic Party voters or leaning in that direction said they had a favorable image of socialism.

In my SIU study, 33 percent indicated that they preferred socialism as an economic system. Only 27 percent preferred capitalism.

The sentiment exists for struggle against layoffs, tuition hikes and the modern-day debt peonage system of the student loan and credit card industries--and to organize for a political alternative.

But the left is still small, and the right wing--however much its forces may be exaggerated on Fox News--is real. Meanwhile, Corporate America is finding ever-more ways to make working-class pay for their crisis--tuition hikes, freezing the federal budget, cutting wages, increasing workloads, and on and on.

Despite holding an overwhelming majority in both houses of the Congress, the Democratic Party has continued to cede the political debate to the Republicans and the right, demoralizing its liberal base, including millions of young workers and students who hit the streets and knocked on doors for Barack Obama in 2008. Most liberal organizations--the labor movement included--continue to let Obama and the Democrats off the hook.

This means there are many unanswered questions about what could replace the failed policies of the past--and what we can do to change things.

Thus, while a substantial minority in the Gallup poll reported having a favorable view of socialism, a large majority also said they had a favorable view of the noxious phrase "free enterprise." Meanwhile, in my study, an overwhelming majority of people said they believed students had a right to disrupt the university in response to tuition increases. But there isn't yet grassroots organization to mobilize that kind of resistance.

We have to protest and fight back, but we also need to build larger activist movements for the battles to come, and we have to rebuild left-wing (including socialist) organizations that can articulate an alternative to a capitalist system--and a strategy to get from here to there.

In all this, one thing is certain: The American Dream is long gone. Ending the nightmare is up to us.