Gen-X and Gen-Y Workers Will Shoulder Double the Burden

October 10, 2003

Bill Virgin, a baby-boomer columnist for the Seattle Post-Intelligencer, has a regrettable message for all the Gen-Xers: "Get back to work!" In his recent article, "Boomers, Gen-Xers headed for Showdown," Virgin predicts generational welfare as soon as the inevitable burden of retiring baby boomers appears in Gen-X and –Yers' pay stubs. Absent reform to a prefunded, personal account-based system, any actions to dispel this conflict will be too late, and the burden will fall on the least politically represented.

Virgin explains: "If you're not earning money, then you're not paying taxes, and if you're not paying taxes then there won't be any money to pay my Social Security, and I'll be writing this column well into my hundreds and then won't we both be sorry."

He recounts a recent Business Week story, "Revolt of the Young: Germans balk at the heavy cost of supporting retirees." According to the story, a 24-year-old chairman of the Christian Democrat party said elderly entitlements are creating an intolerable burden for the young. The youth told a Berlin newspaper that they ought to "pay for their own false teeth and hip replacements."

Thankfully, as Virgin points out: "We're not to the point of such language in this country yet."

He continues: "To the extent there is an intergenerational battle, it's a one-sided contest. The younger set doesn't know what it is in for or up against, and doesn't vote anyway. … But don't count on the younger set staying silent forever. At some point, the evidence of what's going on is going to show up in the one place even [Gen-Xers and – Yers] won't be able to ignore—the paycheck stub.

"And because there are a whole bunch of [baby boomers] and a lot fewer [workers], there aren't many ways out of the snarl—raise the minimum age at which Social Security benefits can be drawn to about 87 or raise both income and Social Security taxes."

"And when they add that all up," Virgin concludes, "they are going to be highly torqued. Who can blame them? About their only hope is for a generation coming up behind them with enough workers to contribute mightily to the system (or else provide a convenient group of players for the next round of 'pass the debt')."

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