June 21, 2018
Well, the Journal did run a piece decrying generational inequality, but naturally, it went the other way. The issue is the projected rise in the cost of Social Security and retiree pensions, due to the aging of the population. Our population has always been aging due to tragic fact that better living standards and improved health care coverage allow people to live longer lives.
The Journal attempted to hide this simple fact from its readers by beginning its chart of old age dependency ratios in 1980 when all the baby boomers were in the workforce. If it had begun the chart in 1950, it would have shown a sharp rise in the old-age dependency ratio between 1950 and 1980 from 0.138 to 0.196. This was associated with (horrors) large increases in Social Security taxes over this period. These tax increases did not prevent workers in this period from seeing rapid gains in living standards because the benefits of growth were widely shared.
Real wages are projected to continue to rise in the decades ahead. Average wages are projected to be more than 35 percent higher in twenty years than they are today. The WSJ apparently did not have room to mention this fact in its piece on generational inequality.
It is true that most workers have not been sharing in wage gains in recent decades. This is due to the fact they have been concentrated at the top, with folks like corporate CEOs, Wall Street types, and doctors getting a disproportionate share of growth. This is a huge problem for today’s young, but it is a story of intra-generational inequality, not inter-generational inequality.
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