Young debt
A recent Washington Post piece on young adult debt makes for interesting reading. The basic thesis is that the time spent investing in professional qualifications at academic institutions, geared towards establishing a foundation for a vocation, do not adequately provide for the costs of modern living. There isn't enough money to earn to pay for all the goods and services a young adult will need or want.
Despite covering an interesting and relevant topic, the article comes across as somewhat ironic and hypocriticial. The solution the article profers for this dilemma is to buy one of a number of self-help books on how to keep your budget in the black. Young people are in debt or don't have the capacity to fund their lifestyles... so buy a book that tells you how to do it.
I've noticed that usually these sorts of books or commentaries lack one key ingredient - institutional analysis - what are the economic principles, and how do the institutions which manage or control the economy create an environment in the costs of living increase?
Take the present situation. The commons is constantly being privatised. Less and less public money is being invested in the public, more and more public money is being privatised (for example, aid and disaster relief money going into the coffers of corporations, privatised roads, public utilities, hospitals and academic institutions, and so on). This automatically leads to an increase in costs. At the same time, the overall share of wealth is being less equally distributed. There are now more billionaires than ever (partially explained by an increase in population which has increased the global economy, and partially explained by inflation) yet this has not been matched by a comparable increase in the general population's wealth.
There is limited mention of the deleterious effect of corporate consumerism on youth debt. The fanatical and always increasing promotion of fashionable consumption (purchasing items that aren't a necessity) by corporations as the pre-eminent form of social expression - typically at the expense of other, more meaningful forms of expression (for example political or familial). The 'urge' to purchase products, to consume, is an unchallenged axiom in the Washington Post article (although it is good to see some reference to 'European social policy', also known as 'common sense'). The urge to consume is presumed to be an almost organic human right. Yet once you remove the facade, I think the article is really just a spruik for the books it mentions. The corporations (in this case the Washington Post, which sells readership to advertisers) are so shamelessly obsessed with profit they will even sell you books bemoaning the pressures of purchasing the goods corporations sell to us! As I am keen to say at every opportunity, Orwellian stuff!!
posted by Iqbal Khaldun @ 10:19 AM
3 comments
3 Comments:
Good questions BoredinHK. I like to think they are. Certainly I think young people are continually underestimated, and this has been the situation since time immemorial. Kids aren't as integrated into the status quo as adults, they are more likely to make decisions on the basis of some system of ideals, and most are naturally inquistive. Whether this 'potential' is ever capitalised on (no pun intended!) in a political context (getting young people involved in social causes) is another question altogether. A lot of kids are very interested in politics. Most aren't, I suspect mainly because the opportunity to appreciate politics is not given. It's not like being politically aware is something taught in school. Indeed our society in general teaches people to be overly modest when expressing their views unless your are privileged or it is your job to be 'opinionated' (you work in the media, politics, etc).
An interesting read Iqbal.
It’s surprising to note that many people, including those resident in Australia, would find themselves on the street on account of missing between 2-4 pay cheques Although difficult to quantify, the absence of a steady and consistent income stream can prove exceptionally detrimental to most young adults. For those not influenced by a culture of consumption, there is pressure to either ‘conform’ as a means of feeling ‘accepted’. For example, several months atgo I was at house party in Paddington hosted by several persons in their early twenties. The residence in question was a 4-bedroom terrace, with each person paying approximately $220 per week in rent. These were all law students, none of which had graduated and all of whom were working part-time. Not all of them hailed from a wealthy background. Rather, their choice of abode by a desire to be viewed as ‘trendy’, ‘hip’ … entirely superficial considerations from the point of view of an intelligent, sane and rational person.
The above people, after some questioning, admitted that they were essentially living on the edge. Spending money was scarce, but they could at least boast about living in, supposedly, one of Sydney’s trendiest districts. This whole episode reminded me of another anecdote, one in which a Clayton Utz paralegal purchased a $1500 suit as a means of making himself feel either adequate or accepted. At day’s end, he was still a sh*t kicking junior-level employee without about as much personal influence in the firm as a glass paperweight. Then again, much of modern life, influenced by commercialism and peer-pressure, is driven by impression as distinct from substance.
However, I should perhaps move to the key issues in the Washington Post piece, namely the high ‘start-up’ costs of young adults as regards education. Thankfully, the Australian educational system is a much different creature from that in the US. We have the benefit of HECS and PELS, both of which allow you to repay your debt to the Commonwealth via deductions from your assessable income over time. This is much less burdensome than taking a ‘bank loan’ and having to repay the principle with a substantial amount of interest.
Also, cost of living is a huge factor affecting your ability to ‘financially manage’ as a young adult. For example, an entry-level tax adviser (top-tier firm) can expect to make between 52-56,000 in Sydney. The same person in Adelaide would probably start at a base salary of $39,000. Although sufficient reimbursement to accommodate general living expenses, luxuries are definitely out of the picture (e.g. Apple Ipods etc).
Financial well-being involves a substantial investment of constraint on the part of the income-earner. This is something not all young adults have in abundance, although some act wisely by saving and seeking to put down a deposit on an investment property at a young age. And yes, it is assuming to note that corporations (specifically publishing enterprises) realise these dilemmas and seek to document them in professional journals/periodicals/books. They then charge the very subjects of their publications (i.e. financially constrained adults) a premium to read what most would already know – truly Orwellian stuff.
Hey mate! Just checked your blog and there is a raft of activity I've been missing. Sounds like you're having a blast abroad, good stuff.
Hey I don't think that anecdote is off topic at all. It's kinda tied into the same issue. Speaking of which I've finally decided to get a credit card so I can purchase stuff online. There's this Visa Debit card that looks to my liking. When I went onto their website I was struck at how 'easy' they made the whole purchasing experience feel. Like you can practically purchase a wife with perky breasts and 2.5 perky kids with your Visa card.
As Orwell once (did not) say: freedom is the freedom to purchase useless items on credit. All hail Emperor Bush/Blair/Howard/[insert middle-aged male here dictator of choice here]!
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