Economist Diana Furchtgott-Roth says millennials will have a more difficult time achieving success than young people had in the past.
The main reason: most government policies benefit older people, she says, leaving young people with few choices and a mountain of debt.
The share of teens and young people who are either employed or looking for work are at historic lows, while the number of young adults living with their parents are at record highs, Furchtgott-Roth said during a speech in Minneapolis at an event hosted by the Center of the American Experiment, which aired recently on MPR News.
These trends start with the failure of elementary and secondary school education; specifically the failure to remove "bad teachers," Furchtgott-Roth said.
"Basically, there's a lot of institutional interests, such as unions who protect these teachers from being fired," she said.
Offering more options for schools could help solve this problem, she said, with the worse schools going out of business, just as a bad restaurant would.
While higher education allows for this kind of choice already, it comes with a hefty price tag — college graduates are leaving school with an average of $30,000 in debt, and few opportunities to pay it off, Furchtgott-Roth said.
"All of you probably think that it's natural to have to need loans to go to college," she said. "You don't see that federal government policies are basically forcing this on you."
In 2010, the government took over the student loan portfolio in order to pay for the Affordable Care Act, Furchtgott-Roth said. But when they lend that money, they don't look closely at who they are giving it out to, or if they'll be able to pay it back. That means colleges can raise their tuition, knowing the federal government is going to keep increasing the loans offered to prospective students.
"That is not fair to you," Furchtgott-Roth. "It's another example of how policy is biased in favor of entrenched interests."
To break this cycle, she said, we need to remove the federal government from the student loan system completely so private lending institutions would be more inclined to look at what careers students intend to peruse, the chances of them getting a job after graduation and how much it should cost to get the proper training for it.
Another thing hurting young workers is the push to raise minimum wage, Furchtgott-Roth said. As wages go up, so do expectations for workers, so teens with little experience may no longer qualify for what used to be entry level jobs. At the same time technology is taking the place of a lot of low-skill work, further shrinking the job market.
The government needs to start forming policy around what will be best for the young workers in America, because "a country that betrays its youth is not going to survive," she said.
For the full speech, click the audio player above.
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