[Joint House and Senate Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 114-176
MILLENNIAL VOICES ON ADVANCING THE AMERICAN DREAM
=======================================================================
HEARING
BEFORE THE
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 18, 2015
__________
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JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
SENATE HOUSE OF REPRESENTATIVES
Daniel Coats, Indiana, Chairman Kevin Brady, Texas, Vice Chairman
Mike Lee, Utah Justin Amash, Michigan
Tom Cotton, Arkansas Erik Paulsen, Minnesota
Ben Sasse, Nebraska Richard L. Hanna, New York
Ted Cruz, Texas David Schweikert, Arizona
Bill Cassidy, M.D., Louisiana Glenn Grothman, Wisconsin
Amy Klobuchar, Minnesota Carolyn B. Maloney, New York,
Robert P. Casey, Jr., Pennsylvania Ranking
Martin Heinrich, New Mexico John Delaney, Maryland
Gary C. Peters, Michigan Alma S. Adams, Ph.D., North
Carolina
Donald S. Beyer, Jr., Virginia
Viraj M. Mirani, Executive Director
Harry Gural, Democratic Staff Director
C O N T E N T S
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Opening Statements of Members
Hon. Daniel Coats, Chairman, a U.S. Senator from Indiana......... 1
Hon. Carolyn B. Maloney, Ranking Member, a U.S. Representative
from New York.................................................. 2
Witnesses
Hon. Elise Stefanik, a U.S. Representative from New York......... 5
Mr. Jared Meyer, Fellow, Manhattan Institute for Policy Research,
New York, NY................................................... 7
Ms. Jennifer Mishory, Executive Director, Young Invincibles,
Washington, DC................................................. 9
Submissions for the Record
Prepared statement of Hon. Daniel Coats, Chairman, a U.S. Senator
from Indiana................................................... 30
Report titled ``Millennials' Slow Start Down the Road of
LIFE''..................................................... 31
Prepared statement of Hon. Amy Klobuchar, a U.S. Senator from
Minnesota...................................................... 36
Prepared statement of Hon. Carolyn B. Maloney, Ranking Member, a
U.S. Representative from New York.............................. 36
Prepared statement of Hon. Elise Stefanik, a U.S. Representative
from New York.................................................. 38
Prepared statement of Mr. Jared Meyer, Fellow, Manhattan
Institute for Policy Research, New York, NY.................... 41
Prepared statement of Ms. Jennifer Mishory, Executive Director,
Young Invincibles, Washington, DC.............................. 51
Chart titled ``Marginal Tax Rates Must Nearly Double to Fund
Entitlement Spending'' submitted by Representative David
Schweikert..................................................... 61
Questions for the record for Mr. Jared Meyer submitted by
Congresswoman Carolyn B. Maloney, Ranking Member, and responses 62
Questions for the record for Ms. Jennifer Mishory submitted by
Congresswoman Carolyn B. Maloney, Ranking Member, and responses 63
Questions for the record for Mr. Jared Meyer submitted by Senator
Amy Klobuchar and responses.................................... 66
Questions for the record for Ms. Jennifer Mishory submitted by
Senator Amy Klobuchar and responses............................ 66
MILLENNIAL VOICES ON ADVANCING THE AMERICAN DREAM
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WEDNESDAY, NOVEMBER 18, 2015
Congress of the United States,
Joint Economic Committee,
Washington, DC.
The Committee met, pursuant to call, 2:06 p.m. in Room 106
of the Dirksen Senate Office Building, the Honorable Daniel
Coats, Chairman, presiding.
Representatives present: Paulsen, Hanna, Schweikert,
Maloney, and Beyer.
Senators present: Coats, Cassidy, Klobuchar, and Heinrich.
Staff present: David Brauer, Connie Foster, Harry Gural,
Colleen Healy, Christina King, Kristine Michalson, Viraj
Mirani, Brian Neale, Thomas Nicholas, Leslie Phillips,
Stephanie Salomon, Aaron Smith, and Sue Sweet.
OPENING STATEMENT OF HON. DANIEL COATS, CHAIRMAN, A U.S.
SENATOR FROM INDIANA
Chairman Coats. The Committee will come to order. We
appreciate our witnesses here today to talk about Millennials.
Obviously I am not totally qualified to totally relate to
Millennials. One of my staff members who is in my age bracket
said, ``You should have me on the witness table because I've
got two Millennials living in my house, and I can't get them
launched.''
[Laughter.]
So it is going to be an interesting hearing that we have
today, and it is an important one because we are dealing with a
generation of people who are very important to the future of
this country, and there are issues that we need to talk about.
I am going to give a very brief opening statement. Our
first witness, Congresswoman Stefanik has to get back to the
House, and so we want to get to her quickly so she can do that,
and then also hear from our other witnesses.
The Joint Economic Committee has produced a piece here,
thanks to some very good staff work, titled ``Millennials' Slow
Start Down The Road of Life.'' It talks about the challenges
that this generation has in terms of education, debt to achieve
that education, unemployment and not finding jobs that match
the talents and skills learned in college, stagnant and less
promise of career path growth in the job market, delay of
marriage, housing issues not a priority but delayed by debt,
and job uncertainty, and looming spending and rising debt that
have put Millennials' futures at risk.
All of these are issues, and there are others that we will
be discussing today. I am going to ask unanimous consent that
my full statement be entered into the record, and also if
Senator Klobuchar does not arrive, she has asked, in a timely
basis, she has asked also for her statement to be put in the
record.
I will turn now to our Ranking Member, Congresswoman
Maloney, for her opening statement, and then we will move to
introduce our witnesses and start the hearing.
[The prepared statement of Chairman Coats appears in the
Submissions for the Record on page 30.]
[The report titled ``Millennials' Slow Start Down the Road
of LIFE'' appears in the Submissions for the Record on page
31.]
[The prepared statement of Senator Klobuchar appears in the
Submissions for the Record on page 36.]
OPENING STATEMENT OF HON. CAROLYN B. MALONEY, RANKING MEMBER, A
U.S. REPRESENTATIVE FROM NEW YORK
Representative Maloney. Thank you so much, Chairman Coats,
for calling today's hearing. Millennials are central to our
Nation's economic, social, and cultural vitality. They are the
largest generation, bigger than the Baby Boomers, approximately
88 million people.
They are also the most educated and racially diverse
generation in United States history. But Millennials face
significant challenges in many ways far greater than those
experienced by the Boomers.
Millennials generally have higher rates of unemployment,
lower incomes, and more student debt. Many Millennials have had
no choice but to delay getting married, buying a home, and
saving for retirement.
These challenges were greatly magnified by the Bush-Era
Great Recession. The Recession was an economic catastrophe that
deeply hurt many Millennials and will have a lasting impact on
them.
We have come a long ways since the darkest days of the
Recession. The economy continues to recover. The overall
unemployment rate has been cut in half, and businesses have
added jobs for 68 consecutive months, the longest streak on
record.
Millennials have benefited substantially from this
recovery. Unemployment is down and wages are beginning to move
up. This year's college graduates will likely enter the best
job market in years. Yet significant problems remain.
It is useful to compare what Millennials are experiencing
today to what the Baby Boomers experienced a generation ago.
Many Baby Boomers with only a high school education could
afford to buy a house, raise a family, save for retirement, and
pass something on to their children. But most Millennials will
need a college degree to come close to matching that success
and will struggle longer to achieve it.
The question is how to pay for it. The real median income
for those households headed by a 25- to 34-year-old has fallen
by nearly 10 percent in the past 15 years. So more young people
have been forced to borrow money to go to college. The share of
households headed by someone under age 35 with student loan
debt has more than doubled since 1989, and they borrow more
money, too, with median debt tripling during this same period.
Some Millennials will end up paying back loans well into
their 30s, 40s, and even their 50s. And because so many
Millennials leave college with student debt, they do not have
the money for a down payment for a first home. Home ownership
for those under 35 years old has declined and is now about 2
percentage points below its average in 1994.
Young people are even returning home to live with their
parents. The Pew Foundation finds that a larger share of women
18 to 34 years old are living at home, 36 percent, than at any
time since 1940 when those statistics were first collected, and
the share of men is even higher.
I hope we can use the hearing today to not only understand
the scope of these problems, but also to focus on solutions.
For guidance, let's look at the first rule of medicine: Do
no harm. Let's start with education. Should we force students
to rely on private student loans that are more costly and come
with fewer consumer protections?
No. The truth is that Millennials cannot afford it. What
about government spending? Should we slash spending so we have
a smaller government that provides fewer services?
Fifty-three percent of Millennials oppose that approach.
Let's turn to health care. Thanks to the Affordable Care Act,
uninsured rates for younger Millennials have been cut in half,
as those under the age of 26 are now able to stay on their
parents plans as well as utilize exchanges across the country.
Should we cave to efforts to repeal the health care law? Of
course not. Millennials make up approximately 7 in 10 workers
who earn at or below the minimum wage. Should we allow the
right wing to block efforts to increase the minimum wage?
Clearly, no.
Should we privatize Social Security? No. Instead, let's
come together to pass modest measures to make sure that it will
be strong when Millennials need it.
Should we roll back consumer financial protections that
help protect them from predatory practices? Some call this
cutting red tape. I would call it dangerous.
But it is not enough to block destructive actions that hurt
Millennials. We must focus on targeted actions that will help
them. And I will mention just a few.
We need to make college more affordable by strengthening
federal and state support for higher education, making tuition
free at community colleges, and increasing investments in Pell
Grants.
We need family-friendly policies so Millennial parents can
make a living and raise their children. Let's repair our
Nation's roads and bridges to lay the groundwork for a stronger
economy.
If we don't do it now, Millennials will pay a very steep
price down the road. And let's not ignore what will perhaps be
the greatest challenge of our time: climate change.
We must fight those who claim that climate change is a
hoax. Failing to address climate change would leave an
unimaginable burden on Millennials and future generations.
The challenges facing Millennials are real, but the
solutions exist and it is our job to help chart the course
forward. Let me close by saying that it is wonderful to have on
our panel a colleague from the House, and a Member of the New
York delegation. So, welcome, Elise, and I look forward to your
perspective as well as the testimony of the other panelists.
Thank you, and I yield back.
[The prepared statement of Representative Maloney appears
in the Submissions for the Record on page 36.]
Chairman Coats. Senator Klobuchar, I have already put your
statement into the record, but I would love to give you some
time to summarize what you had to say.
Senator Klobuchar. As the Ranking Senator, thank you. I am
going to have to leave early, but I did also want to thank Ms.
Mishory for being here. She is going to be in Minnesota in mid-
November, which we know is the best time to visit--right,
Congressman Paulsen?
[Laughter.]
And then, Representative Stefanik, I know you used to work
for Tim Pawlenty, our former Governor, so we welcome you any
time.
This issue of the Millennials, I am so glad that you are
having a hearing on this because we know that so many different
issues confront Millennials. And I have heard Congresswoman
Maloney go through a number of very important issues. I think
the savings issue is going to be important. As you have more
people that are changing jobs in the GIG economy, which when I
first heard about it I though it meant like gigs, as in
computers, and then I realized you mean a lot of jobs. And with
so many jobs with Millennials, that is going to be a piece of
it. And, as well we know, the student loan costs, paid sick
leave, and so many economic challenges. But there's also so
many opportunities with the economy having stabilized and
improving.
So with that, I am going to let you go on with the hearing
here. Senator Blunt and I had agreed to meet with the
Ambassador from the Congo on some important adoption issues,
but I look forward to hearing what happens. Thank you.
Chairman Coats. Senator, thank you.
I am going to do something a little bit different here. I
am going to introduce Mr. Meyer, and then introduce Ms.
Mishory, and then have Congressman Hanna introduce you. And the
last shall be first. The last to be introduced will be the
first witness, given your time constraints.
Mr. Jared Meyer is a Fellow of the Manhattan Institute. His
research includes micro economic theory--don't ask me what that
is--and the economic effects of government regulations. Mr.
Meyer is a regular contributor to several national media
outlets, is co-author with Diana Furchtgott-Roth of
``Disinherited: How Washington Is Betraying America's Young,''
published just this year. He will have a tape--no, not a table
outside where----
[Laughter.]
He can sign the book, but you can go to Barnes & Noble, or
Books-a-Million and get that book.
Before joining the Manhattan Institute, he was a research
assistant for political philosopher Douglas Rasmussen. He holds
a Bachelor of Science in Finance and a minor in Philosophy of
Law from St. John's University. We welcome you, Mr. Meyer.
And Ms. Jennifer Mishory, Executive Director and Founding
staff member of Young Invincibles. That's what some of my kids
say they are.
[Laughter.]
She is a member of the Consumer Advisory Board of the
Consumer Financial Protection Bureau. She previously served as
consumer representative for the National Association of
Insurance Commissioners, and graduated with honors from UCLA.
She received her Law Degree from Georgetown University Law
Center, and is admitted to the California Bar.
I would like to turn now to Representative Hanna to
introduce our first witness.
Representative Hanna. Thank you, Chairman.
I am pleased today to introduce my friend and colleague,
Representative Elise Stefanik who serves the 21st District of
New York, just north of me. Representative Stefanik graduated
from Harvard University with honors as the first member of her
immediate family to graduate from college.
She is not only the youngest Member of Congress serving
today, but she is also the youngest woman ever to be elected to
this institution.
She is a member of both the Armed Services Committee and
the Committee on Educational Workforce. She also serves as a
freshman representative to the Policy Committee, and heads the
Millennial Task Force.
Representative Stefanik was formerly Director of
Communications for the Foreign Policy Initiative, and worked in
the White House as part of George W. Bush's Domestic Policy
Council staff.
Prior to her election, Representative Stefanik also worked
at her family's small business, Premium Plywood Products,
founded over 20 years ago in Upstate New York. Welcome.
STATEMENT OF HON. ELISE STEFANIK, A U.S. REPRESENTATIVE FROM
NEW YORK
Representative Stefanik. Thank you, Congressman Hanna. Am I
good to go? Great.
Good afternoon, Chairman Coats, Ranking Member Maloney, and
my Distinguished Colleagues on this Committee.
It is truly an honor to participate in today's hearing and
have the opportunity to discuss issues that are not only
important to my constituents, but also to over 80 million other
Millennial Americans throughout our country.
It is critical that we as legislators recognize the
opportunity Congress has to support and empower Millennials,
the current generation between the ages of 18 and 33 years old.
I look forward to sharing my unique perspective both as a
Millennial and as a Millennial Member of Congress.
Over the last year, I have chaired the House Republican
Millennial Task Force. This Task Force aims to identify and
tackle the issues facing Millennials, while also embracing the
unique and innovative ways these Americans face challenges.
I have chaired three hearings to date to address these
goals, and trust that what was learned will prove helpful to
this Committee.
In June, the Task Force invited several leaders in
Millennial research and polling, including Mr. Meyer who is
here with us today. The hearing explored and delved into the
demographics of Millennials and identified key issues of
concern.
We learned that Millennials make up one in three U.S.
workers, and have now overtaken Generation Xers as the largest
generation in our Nation's workforce. Additionally, Millennials
are the most educated generation in our history, while also
carrying student loan debt far greater than our parents and
grandparents.
We also learned that a majority of Millennials do not
believe they will be able to attain the standard of living or
the quality of life enjoyed by their parents.
Our witnesses explained that this generation faces
entrenched challenges to innovation and advancement that are
the result of a Federal Government that has not recognized and
responded to a changing America.
In August, I held a field hearing in my District where I
spoke to Millennials from diverse fields, ranging from
advertising to agriculture. These young Americans from New
York's 21st District shared the hopes they have as they start
their professional careers, as well as the challenges they face
in today's economy.
Ethan Allen, a Millennial farmer who I represent, mentioned
the regulatory burdens young farmers face as they look into
entering the agricultural field. Other Millennials who
participated on the panel spoke of the crippling student debt
that prevents them from starting new businesses, and also the
crushing costs of health care that make it a challenge to save
for retirement.
However, what truly inspired and impressed me was the
optimism, and this new way of looking at the world which this
Millennial generation exudes. These are young Americans that
strive for fulfilling jobs and care about their local
communities.
They do not shy away from challenges, and they want to
participate in society, their communities, and in local
government. However, often they feel held back by archaic
processes and over-regulation.
As leaders in Congress, we can help with these challenges,
and we can support and help grow our empowerment economy to
allow young people to bring about economic change for
themselves.
Just this past Monday I chaired the third Task Force
hearing here. We explored how companies are attracting and
retaining Millennials in their workforce, as well as how
today's technology is providing flexible opportunities for
Millennials to earn money and advance their careers.
I heard from Google and PricewaterhouseCoopers who shared
their thoughts on the empowerment economy. Mazie Clark, a
Millennial from Google, pointed out how flexibility and
competitive benefits are enjoyable, but at the end of the day
it is about empowering workers to succeed and live the lives
they desire.
Terri McClements from PricewaterhouseCoopers discussed the
real-time feedback system at their company that instills open
communication and a sense of ownership among employees, 80
percent of whom are Millennials.
Another witness at the hearing was Uber, which is a great
example of the empowerment economy. This company allows for
flexibility and allows, for example, a full-time student to
earn a living on their own schedule, or even gives a stay-at-
home mom the opportunity to set her own hours and receive a
paycheck to benefit her young family.
By allowing Americans the flexibility to work the hours
that fit within their busy daily schedule, companies such as
Uber are creating the needed opportunities which are
desperately desired by Millennials.
Although these Task Force hearings have primarily focused
on the economics of the Millennial generation, it is critical
that we address the student loan debt crisis. I share the
concerns of this Committee and many of my House and Senate
colleagues.
When the most educated generation in our Nation's history
cannot start businesses, purchase homes, or save for retirement
because they are held back by decades of loan payments, we must
make it a priority to discuss innovative ways to address this
solution.
I am thankful to have been invited to speak to this
Committee today, and I look forward to an ongoing and
productive conversation on how we as leaders in Congress can
best serve the 80 million Millennials across this Great Nation
who will be our future leaders.
Thank you.
[The prepared statement of Representative Stefanik appears
in the Submissions for the Record on page 38.]
Chairman Coats. Well thank you very much. We appreciate
that. We hope you will be able to stay to take some questions
from us. We understand when you'll need to leave.
Mr. Meyer.
STATEMENT OF MR. JARED MEYER, FELLOW, MANHATTAN INSTITUTE FOR
POLICY RESEARCH, NEW YORK, NY
Mr. Meyer. Chairman Coats, Ranking Member Maloney, and
other Members of the Joint Economic Committee, I want to thank
you for giving me the opportunity to give testimony on how to
embrace Millennials' vision of the American Dream.
I am a Fellow at the Manhattan Institute for Policy
Research, and the co-author of the book ``Disinherited: How
Washington Is Betraying America's Young,'' but don't worry it
isn't any of you who are doing the betraying.
Over the past four months, I have traveled across the
country and I have spoken with Millennials about the economic
challenges they are facing, and also their vision for the
future.
Millennials have been called the most entrepreneurial
generation. While this may be true based on their desires to
start businesses and their near-universal respect for
entrepreneurs, few young Americans have followed through on
their entrepreneurial dreams.
A Bentley University survey of Millennials found that 66
percent of the respondents have a desire to start their own
businesses, and Deloitte found that about 70 percent of
Millennials envision working independently at some point in
their careers.
Yet, only 3.6 percent of businesses are at least partially
owned by someone under the age of 30. This is the lowest
proportion since the Federal Reserve began collecting data
nearly a quarter century ago.
Additionally, the Brookings Institution found that business
startup rates are much lower now than they were in the 1980s.
But these declines should not be surprising. Government policy,
particularly in regards to regulation, is stuck in the 20th
Century and continues to hold back economic opportunity.
The U.S. Code of Federal Regulations is over 175,000 pages
long. The number of pages has steadily accumulated since the
1970s, but five of the six all-time high counts have occurred
under President Obama's tenure. And in these pages, there are
over one million commandments from Washington in the form of
restrictive words such as ``must,'' ``cannot,'' or ``shall.''
How can we expect business owners to comprehend which of
these million restrictions apply to their businesses? It is
simply a waste of their time.
Financial regulations such as the Security and Exchange
Commission's restrictions on equity-based investment can
severely limit a startup's ability to raise capital.
The Jobs Act of 2012, a law that President Obama touted as
one of the ways he has aided Millennials, included a provision
to allow for equity-based crowdfunding. Debt- or rewards-based
crowdfunding were already permitted under existing law, but the
SEC has still not implemented the equity crowdfunding rules,
leaving entrepreneurs delaying their projects.
And even if entrepreneurs are able to fund their
businesses, labor regulations can prevent their projects from
getting off the ground. One example of this is occupational
licensing, which requires people to spend a substantial amount
of time and money to gain government's permission to work.
One out of three American workers now needs to gain
government licensing or certification in order to earn a
living, and this is up from 1 in 20 in the 1950s. It takes an
average of 70 times as long to become a government-approved
interior designer as it does to become a government-approved
emergency medical technician.
Additionally, the pass rate for the Louisiana florist exam,
which is for a florist certification, is only half as high as
the pass rate for the Louisiana Bar Exam.
These burdens vary across states, and licenses are rarely
transferable if a practitioner moves. This disproportionately
affects those who have to move due to a spouse's job such as
military spouses, and mobile, often young workers.
The negative effects on young people from excessive
occupational licensing are one reason why President Obama's
2015 budget called for $15 million to go to states that
institute common sense reforms, to make sure that licensing
keeps the public, not established companies and practitioners,
safe.
Further initiatives to curb states' desires to license
young people out of work should be welcomed by federal policy
makers. Other labor regulations affect the flexibility of
entrepreneurs' hiring decisions. A recent Labor Department
proposed rule would expand the numbers of employees who qualify
for overtime pay.
Those who earn up to $50,400 a year might have to be paid
overtime, up from the current level of $23,660 a year. This
would reduce flexibility for entrepreneurs and their employees.
Telecommuting, which is another mainstay of startups, would
also take a hit, since employers would have to keep close track
of their employee's hours.
Furthermore, the U.S. Department of Labor is making it more
difficult for startups to hire contractors. DOL recently issued
an administrator's interpretation to clarify the definition of
``independent contractor.'' But the problems for startups arise
because this interpretation downplays an employer's lack of
control over employees' hours as a determining factor for
determining employee versus independent contractor status.
This means that more workers will be determined to be
employees rather than contractors, and startups will be forced
to pay up to 30 percent more, money they often do not have, to
provide the associated benefits.
The American Dream may have once been finding employment at
a large company, working there for a few decades, then retiring
with a defined benefit pension plan, but now Millennials'
American Dream looks much different than that of their parents
and grandparents.
New opportunities to change or advance one's career are
prioritized, and individualized flexible work arrangements are
the model of the future.
Thank you for the opportunity to give testimony, and I look
forward to your questions and continuing this discussion.
[The prepared statement of Mr. Meyer appears in the
Submissions for the Record on page 41.]
Chairman Coats. Thank you. And, Ms. Mishory.
STATEMENT OF MS. JENNIFER MISHORY, EXECUTIVE DIRECTOR, YOUNG
INVINCIBLES, WASHINGTON, DC
Ms. Mishory. Thank you. Chairman Coats, Ranking Member
Maloney, and Members of the Committee, thank you for the
opportunity to appear here today.
I am the Executive Director of Young Invincibles. We are a
nonprofit, nonpartisan organization that works to expand
economic opportunity for young people in this country.
Definitions vary, but according to Pew there are 75 million
Millennials, and we are the most diverse generation in American
history. So 57 percent are White, 21 percent are Hispanic, 13
percent are Black, and 6 percent are Asian Americans. This
compares to Boomers of which 72 percent are White.
In 2013, 65 percent of 25 to 34-year-olds had completed
some post-secondary education, and about a third of Millennials
are also parents.
Overall, we are the most educated, the most tech savvy, but
also face deep financial challenges. When we interact with
young people across the country, they tell us about struggling
to attend school, find good jobs, raise families, and pay down
debt.
The Recession accelerated trends that left Millennials with
critical challenges unlike those seen by our parents.
First, we have seen challenges in finding employment. While
young people have experienced job growth in recent years, there
are several negative trends in youth employment further
exacerbated by the Recession.
Unemployment levels are consistently above the overall
level of joblessness, and this trend is even more troubling for
young people from communities of color.
Indeed, Millennials are now the biggest generation in the
labor force, yet they account for just 33 percent of employed
Americans. And this can have long-lasting effects. Years later,
workers who graduate during a period of high unemployment earn
significantly less than workers with better timing.
Second, we have seen wage stagnation and benefit reductions
for this generation. Wages have actually decreased for
Millennials in the past decade, almost twice as fast as the
decrease seen by workers across age groups.
Young people are disproportionately more likely to work in
sectors with lower wages. So median wages have declined or
remained unchanged in the last decade in four of the top five
industries employing most 18- to 24-year-olds.
Other trends similarly impact this generation. One in four
employed 18- to 34-year-olds is only working part-time. The
rise of the sharing economy, while it does provide desired
flexibility and entrepreneurship for some young workers, it has
also likely accelerated that trend.
As a result, many of today's young workers lack key
benefit, wage, and other workplace protections, and even
consistent workplace scheduling when it is needed.
Third, we have seen a growing demand for education, but
also growing debt. Research shows that by 2020 65 percent of
jobs will require some sort of post-secondary education beyond
high school, yet affording college is just too hard.
Since 1978, tuition and fees have increased over a thousand
percent, primarily due to a decrease in state spending for a
student. And state investment is down a total of 23 percent
since the recession.
As a result, student debt has ballooned. In 2014, 70
percent of grads left with an average of $29,000 in debt.
Students tell us that their debt means delaying major life
decisions, and a recent study indicated that student debt
prevented $83 billion in real estate sales last year.
Overall, the median net worth of young households is about
$10,000, and that is a 41 percent decline from 1995. So it is
clear. Tackling these challenges requires action.
First, we need to invest in quality education. Making
education more attainable means that states need to reinvest,
and the Federal Government can help to incentivize them to move
in that direction.
And Congress must double down on investments such as the
Pell Grant and make it available year-round. Moreover,
simplifying the financial aid process and providing students
with clear information about which schools are providing good
outcomes would give students a better chance to make decisions
that are right for them.
Congress must also address the quality issues at taxpayer
funded poor performing schools. We can do this through risk-
sharing models or other means to incentivize schools that are
doing well.
Second, we need to help those with burdensome debt. Income-
based repayment plans can provide badly needed relief, and
those should be scaled up so that those who are struggling are
not forced to pay back more than they can afford. Additionally,
student loan refinancing and bankruptcy protections for those
who are really in dire straits are common sense solutions. And
those with debt need fair treatment from their loan servicers,
and that is just not happening right now.
Third, we need to do more to help youth who are not working
and who are in school. With 5.6 million opportunity or
disconnected youth in this country, youth who have potential
but have not yet been able to find a pathway to work, we must
scale initiatives to reconnect them to education and job
training such as those funded through the Workforce Innovation
and Opportunity Act.
Apprenticeships also yield graduates with increased
opportunity for gainful employment and a degree.
Fourth, we must redesign workplace policies for today's
economy. Policies that promote family economic security often
benefit young people, so Millennial parents are actually
experiencing the highest poverty rates seen by any parents in
the past 25 years.
Young parents experience a series of unique challenges,
including care-taking responsibilities, and barriers to stable
work and school schedules, as 25 percent of students are
actually parents.
Policies such as improving access to on-campus child care
for student parents, and better access to paid leave could
better support this generation now starting families. Despite
the challenges we face, Millennials are optimistic. It is up to
us to make sure that perception of the future becomes a
reality.
Thank you for your time, and I look forward to the
discussion.
[The prepared statement of Ms. Mishory appears in the
Submissions for the Record on page 51.]
Chairman Coats. Well thank you, and I appreciate the
testimony from our three witnesses. I will just ask a few brief
questions here, and then turn to my colleagues.
Ms. Stefanik, you indicated that despite the challenges
that Millennials face--and you named a number of them--there is
a real sense of optimism. That is a bit surprising, given the
fact that so many Millennials have been labeled as working in
less skilled jobs than the skills they have, saddled with a
significant amount of debt, and no longer think that they can
live the American Dream, or live the dream that their parents
have been able to live.
So I am trying to reconcile. Where does that optimism come
from? Sometimes I think--I am wondering why there isn't more
outrage, more outrage on the part of a generation that has been
robbed of the opportunity to live the American Dream? Robbed,
frankly, by the older generations, of which I am part of. Maybe
Representative Hanna would be close to it, anyway. Clearly
the--and you, Mr. Meyer, said that there are government
policies that have betrayed the younger generation, but, you
said, not from any of us; it is from all of us.
It is from all of us who have held elective office and
executive positions, and presidencies--I am not dividing
between one party or another party. We have all failed
dramatically to address the impact of running this country into
ever more debt, of not making needed reforms to mandatory
spending programs that are literally drying up all the--without
determining any kind of priority, good, bad, or indifferent, in
terms of policies that have been mentioned by all of you,
unaffordable, unaffordable because so much of our spending now
goes to mandatory entitlement programs, plus interest on our
debt.
And so you can talk all you want about--we can talk all we
want about supporting students, more Pell Grants for this, more
opportunities for that, more spending here, more education, et
cetera et cetera. That is being squeezed every year by our
refusal to address the main issues here.
So I am wondering where that optimism comes from when these
young people recognize that they are being robbed by older
generations and, frankly, by their elected officials both in
the Executive Branch and in the Legislative Branch that have
refused to take steps necessary to address this problem and put
them on a better path to living the American Dream.
We all ought to be ashamed of ourselves for falling to
groups like AARP and others who scare the heck out of older
people, knowing that we are running this Nation over a cliff.
And the biggest impact will be on the Millennials.
Representative Stefanik. Thank you for the question.
As a Millennial, I know I speak from personal experience
that you can be frustrated simultaneous to feeling optimistic
about the future of this country.
There is no doubt that the issue of our national debt will
rest on our generation's shoulders. Today we know that our
national debt is over $18 trillion. If we continue on this
current trajectory, by 2025 it will be over $27 trillion. This
is an unsustainable debt load that will continue to hamper our
generation's ability to grow and create economic opportunity.
But I did want to point to some of the other more hopeful
indicators about Millennials. Millennials actually volunteer in
historic numbers, but they feel very politically disengaged.
And I am about half the average age of a Member of Congress. I
think one of the lessons that I try to educate my colleagues in
Congress is that we need to actively reach out to Millennials
to make them a part of the conversation when we are making
public policy.
Millennials have come of age during a world of government
gridlock, during a world of partisan bickering, and we need to
do better about educating Millennials on how legislation that
we are voting on today will impact their economic futures, and
the choices economically that will be available to them.
But we are still hopeful. We live in, you know, an amazing,
changing economy right now with the information age and growing
companies like Uber that six years ago did not exist.
So I think that hope is those positive, disruptive ideas
that are a result of supporting this empowerment economy with
greater flexibility and increased entrepreneurship.
Chairman Coats. Thank you. Mr. Meyer, do you want to
comment on that?
Mr. Meyer. Yeah. I would just say I think what Millennials
see is, even in the face of government inaction, private
solutions driven by entrepreneurs that really excite them.
For example, the Post Office still has the same monopoly
that it's always had, but we have allowed entrepreneurs to
innovate around the Post Office so that we don't really need it
anymore. If we look at e-mail, or with private chains that are
coming in and filling gaps in service, this is what is seen
throughout the economy, especially as has been mentioned a few
times, with Uber. Most cities still have in place their taxi
cartels, where taxis get a special monopoly privilege on
picking up customers. But Uber has made those effectively not
matter anymore because it has an entirely different business
model that has superceded the existing regulatory structure.
So I think that is why young people are optimistic, and why
they have such respect for entrepreneurs--not only that they
want to be them themselves, but they realize the great benefits
that they have brought to today's economy.
Chairman Coats. And, Ms. Mishory, I want to give you a
chance to respond also.
Ms. Mishory. I certainly agree with my panelists that young
people are service oriented and volunteer at incredibly high
rates, and are entrepreneurial. I do think a lot of the
investments that we can think about making are really smart
investments.
So, for example, we did a report a couple of years ago
looking at the cost of youth unemployment. It was actually
costing the country $9 billion a year to have so many young
people out of work. If we could actually scale up some of the
innovations we have seen, and connecting young people to
training and jobs that will get them working, that is actually
going to help grow the economy and get folks back to work, and
actually alleviate that cost.
Chairman Coats. Well thank you. I want to urge all of you
to continue to support that optimism, which means you need to
put a lot of pressure on us who are making these policies on
straightening out our debt so they have a better future and not
burdening them down with regulations that are just no one can
even begin to keep up with, so that they too can come to a
point where they can have the same American Dream that we have
had and that our parents have had, and many others who have
sacrificed for the future of this country. We are not seeing
that sacrifice right now--we don't need more handouts, as
you've said. In my opinion, we need more empowerment. We need
to give you a reason to be optimistic.
Congresswoman Maloney.
Representative Maloney. Thank you so much, and welcome to
all of the panelists, and especially Representative Stefanik
who is from the Great State of New York that I also have the
privilege of representing. And my late husband's home was in
your District, our family home was. So I am very familiar with
that area and why you are so devoted to climate change and
other environmental issues.
I was very interested in your testimony that you chair the
Task Force for Millennials for the Republican Majority, and
your statements on flextime and how helpful it is for companies
to look at it. And given the example of Uber that allows young
mothers and students to work and also pursue their careers and
their education and their children.
So I would like to ask you to look at a bill that I have
introduced with Senator Casey on flextime which follows the
model of England, that allows flextime and is not mandatory but
protects workers that approach their employers for flextime. I
think it is flexible and good and could respond to the
challenges that you pointed out in your testimony.
Also I was interested in your support for climate change.
You were an original co-sponsor of a resolution recently
introduced in the House that noted the dangers of saddling
future generations with costly economic and environmental
burdens. And I would like to hear your thoughts on what should
be done to address climate change.
And isn't failing to act on climate change imposing
additional burdens and costs on your generation?
Representative Stefanik. Sure. So I welcome the opportunity
to review your legislation on greater flexibility in the
workplace. So the concept that Uber discussed, as well as
PricewaterhouseCoopers, I think that makes them unique is that
they were essentially ideas that came from the workforce and
the companies themselves.
So PricewaterhouseCoopers talked about how they were able
to model a flexible--you know, flextime that was responsive to
what their workforce said they were looking for. So the needs
of, for example, single parents are very different than
students who are maybe pursuing their graduate degree, or
taking extra classes outside.
And I think the key for me is providing flexibilities for
companies for policies that work to continue to promote
Millennials and provide economic opportunity for Millennials to
grow.
In terms of my original co-sponsorship of the resolution
related to climate change, I represent New York's 21st
District. The health of our environment is critically tied to
the health of the economy. But in terms of policymaking, we
have to find a balance in addressing this issue that is not
crushing jobs and creating overly burdensome regulatory costs.
I think we need to have this conversation going towards the
future, but I believe it should not be just one-sided. And when
I talk to Millennials, their key concern is getting a job in
today's economy. And we need to make sure policies and over-
reaching rules are not crushing our jobs today. But that
conversation needs to happen.
Representative Maloney. I would say you represent one of
the most environmentally beautiful Districts in the country,
and I look forward to further conversations on these two
issues.
I would like to ask Ms. Mishory. The oldest Millennials
were 27 years old and beginning their careers when the Great
Recession hit, and the impacts on their employment, income, and
wealth have been painful.
How has the Great Recession affected the employment and
earnings prospects of Millennials? And are these short or long
term impacts on their careers?
Ms. Mishory. Well the Recession certainly hit Millennials
the hardest. And so we are seeing a generation who graduated at
a time when they could not find work, and they could not find
work at higher rates than other age groups.
And research does show that those effects on wages can last
for as long as 15 years, and perhaps even longer. So someone
graduating at a time of recession will see that impact over
time.
So I do expect that those folks that have graduated during
that time period will see that for a long time.
Representative Maloney. And Millennials are also less
likely to own their own homes, and more likely to live at home
with their parents than previous generations. And is this
explained, in part, by the difficult economy which they have
inherited?
Ms. Mishory. Sure. And folks ask that question a lot, and
most young people do not want to be living at home when they
are 25, 26, 27. It is not a choice. I mean, we are talking
about people who are trying to find work, trying to save up,
and whether it is save up in the rental market that they happen
to live, or to be able to purchase a home, I think those
challenges are reflective of a confluence of issues.
So we are seeing either declining or stagnant wages. We are
seeing people that graduated during the Recession and could not
find a job. And then we are seeing folks that have student
debt.
And we have seen poll after poll, study after study show
that having student debt is impacting the housing market. And
as I mentioned in my testimony, we are starting to quantify the
billions of dollars in sales that it is actually holding people
back from.
So, absolutely. And I would say, finally, when it comes to
home ownership, it is also a generation that saw their parents
lose their homes, and I think are going to be perhaps a little
bit more reluctant to jump into the market.
Representative Maloney. My time has expired. Thank you.
Chairman Coats. Thank you.
Congressman Hanna.
Representative Hanna. Thank you.
As we know, we can agree that college is more a necessity
than ever, but it is also a choice. College debt is a choice
that people face, and a choice I think they have to make.
And speaking of Uber, you may want to talk about this, Mr.
Meyer, but right now the income from--for someone who runs a
Uber business, they are asking that it become W-2 income. Are
you familiar with that? I think that is in California, to be
precise.
But I want to ask you about something that Senator Coats
referred to. And that is, this notion of intergenerational
theft. Because while I agree with that, and I agree that we
have this enormous debt and slow growth, a lot of what Ms.
Mishory talked about would actually add to that, respectfully.
Pell Grants have grown exponentially in the last few years to
around, I think, $25 billion.
And some of the other programs, the state-funded education,
all of those kinds of things add ultimately to this problem.
So, I mean you have a bigger problem than we do, right, and
we are piling on. So how do you reconcile that with--and how do
you feel about the term ``intergenerational theft''? It is
curious to me that we use that, because it is benefiting our
parents--me, soon enough. Anyone? Elise?
Representative Stefanik. Thank you, Congressman Hanna, and
my good friend from Upstate New York. You know, I think our
national debt and our budget crisis in this country is a
generational issue. That is how I talk about it with my
constituents, most of whom are seniors, and they fear for their
kids and their grandkids' future.
I wanted to refer back to Senator Klobuchar's initial
statements that it is not only the national debt which is going
to be a huge challenge for my generation, but it is also our
savings crisis on an individual basis. The fact that
Millennials are facing the crushing debt of students loans.
They are pushing off pursuing home ownership. And they are not
saving for the long term.
We are going to be the generation that will, you know,
hopefully be there to support our parents as they become
seniors, and we will probably become caretakers and will have
to make some of those--you know, will be making those
decisions, but also, you know, providing the economic support
for our parents as they live longer.
So I think the savings crisis and promoting financial
literacy, and promoting more awareness of Millennials of the
importance of saving early will be beneficial. That is
completely aside from our national debt, which of course is a
generational issue.
Mr. Meyer. Well, Congressman Hanna, I want to thank you for
bringing that up because I actually just had a report released
yesterday through the Manhattan Institute describing
entitlement programs as programs that steal from younger,
poorer Americans, and give to older wealthier Americans.
And the reason we have not seen reform when it comes to
entitlements is older Americans view it as if they deserve
these benefits. But if you look at what a typical senior who
retires between--or who retired between 2000 and 2010 will
receive in Medicare, it is about three to seven times more than
what they paid in, even taking into account the possibility
that they would have gained investment income if they were
allowed----
Representative Hanna. Over a third of the people on, say,
Social Security represents about 90 percent of their income, so
the alternative is to push them into abject poverty?
Mr. Meyer. I don't disagree with your number, but I think
that is looking at the wrong picture. If we are looking at
income, it is only looking at part of the picture of older
Americans.
Very few are working, so of course they are not receiving
much income. But the wealth levels have grown drastically, if
you look at young Americans versus older Americans.
In fact, the average household wealth for a household
headed by someone 65 years or older is 50 times greater than
the average household wealth for a household headed by someone
35 or younger. And this was only 10 to 1 in the mid-1980s.
So if we want to talk about increasing income inequality,
the increase between the oldest Americans and the youngest is
something that we need to be looking at when we talk about
entitlements.
Representative Hanna. But, arguably, they had a lifetime to
earn that, too.
Mr. Meyer. Yes, but it has been increasing, about five
times.
Representative Hanna. Ms. Mishory, with 30 seconds left I
have.
Ms. Mishory. You know, I think that--I think that the word
``intergenerational theft'' is not necessarily the way a lot of
young people look at it. I think that it is worth thinking
about these safety net programs. Young people are thinking
about their parents, their grandparents, and themselves. So I
think young people do take a more nuanced view to it.
Representative Hanna. So it is a bigger crisis than just
your generation. It is all of us.
Ms. Mishory. And young people are generally supportive of
ensuring that these social safety net programs are there in the
long run, but also there for their parents as well.
Representative Hanna. My time has expired. Thank you,
Chairman.
Chairman Coats. Congressman Beyer.
Representative Beyer. Thank you, Mr. Chairman.
And, Congresswoman Stefanik, so much of what we have been
talking about is how government is messed up and created these
conditions, and what government should do. And yet I heard this
morning that only 12 percent of Millennials are registered to
vote.
By the way, old people are really good at voting.
[Laughter.]
Mr. Meyer. Ms. Stefanik, what can we do to inspire people
born between 1980 and 2000 to actually participate in the
political process?
Representative Stefanik. Thank you so much for the
question. I think that particularly as Members of Congress we
need to constantly reach out to Millennials, whether that is
going to college campuses, whether it is going to training and
development programs, preparing our workforce to talk to them
about why policies are relevant.
The other interesting statistic that is somewhat related is
recently Time Magazine found a poll that 89 percent of
Millennials are not interested in running for office in the
future.
This is, again, that disconnect between the historic
numbers of volunteers among Millennials versus they do not
connect that to public policy and the importance of making sure
that their voice is heard.
We need to change that as an institution. I am, you know,
very concerned that unfortunately we will not have the best and
brightest wanting to run for office at the local, state, or
federal level, and we need that here today.
I have been in Congress for less than a year, and we need
the best minds possible from diverse backgrounds, from all
across these very different districts to solve these
generational issues we face.
Representative Beyer. Thank you, Elise, very much.
Ms. Mishory, Isabel Sawhill over at Brookings wrote a book
last year about marriage in the United States, and said if you
draw a straight line by 2050 no one will get married in the
country. And we are already seeing this right now. The
generation of my kids, nieces and nephews, are all waiting and
delaying.
Should we be worried about this? What can government do
about this? What does this mean for population growth in the
years to come?
Ms. Mishory. We are certainly seeing the data play that
out. So young people tend to get married later, tend to have
kids later. You know, I think that there may or may not be some
cultural decisions, and sort of more having to do with the
culture of this generation. But I also think there is a lot of
economics going on here. So a lot of financial decision making
and going back to the issues of student debt.
We see over and over again young people telling us, polls
telling us that people are delaying those major life decisions
because they have debt. So they cannot save for that down
payment. They cannot save to have a kid. We have talked to
student debtors who say--there is one woman in particular who
told us, you know, I found out I was having my first child and
I couldn't get excited because I didn't know how I was going to
afford it because I had all this student debt.
And so it is really impacting young people in some very
major ways.
Representative Beyer. Great. Thank you.
Mr. Meyer, I was fascinated by so many of the things that
you said that I actually disagreed with, but I respect it. But
you talked about barriers to entry.
I was in the Virginia General Assembly for eight years and
every business bill I saw for eight years created by business
was to create a barrier to entry so that other businesses could
not compete against them.
So it is not government so much, necessarily, that is doing
that but businesses themselves. For example, on credit, every
person I talk to wants to borrow from a bank says as long as I
don't need the loan the bank will give it to me. They are
sitting on enormous amounts of resources that they won't lend
out.
Occupational licensing. We are a federal legislature.
Occupational licensing is almost completely down at the state
level. So should there be federal intervention on licensing?
Mr. Meyer. First of all I couldn't agree with you more
than, more often than not, regulation has the fingerprints of
big business on it. People who want to use the government to
keep out new competition by raising the barriers----
Representative Beyer. Small business, too.
Mr. Meyer. Yes, that's true. But I would say, when we look
at occupational licensing, this is something that I'm glad that
President Obama is really taking the lead on where he's
released a framework for policymakers and also calling for the
amount going to the states that institute successful reforms in
his budget.
I think it is something that has gotten so bad now--again,
one in three workers needing government permission to work, up
from one in 20 in the 1950s--that it does need some sort of
federal involvement, or at least federal prodding, where we're
saying to states: You need to take a long, hard look at your
list of licensed occupations. And when you see things such as
African hair braiders, or interior designers, or florists on
that list, you need to take a look at who is being protected?
Companies, or the public?
Representative Beyer. And one last thought--thank you, very
much. On the contractor issue, the six-part test, I think it is
really important to see the other half of the story. Which is,
employers who bring people on board to do a job full time and
treat them as contractors just so they don't have to pay
benefits or Social Security, or Unemployment Compensation.
At the same time, in virtually each of the six parts they
actually are employees. And that is what they were trying to
protect.
Mr. Meyer. I would just say, looking at the rise of the
sharing economy, this is something we need to encourage, the
flexibility and individualized work model. And if it is allowed
to go forward as it is stated right now, I think this will put
a major threat towards the sharing economy's business model.
Representative Beyer. My friend, Senator Mark Warner, is
worried about this a lot. The dilemma with the sharing economy
is that, at the same time do you want to strip away rights that
employees have had for more than 100 years in this country, to
things like Social Security contributions?
Thank you, Mr. Chairman.
Chairman Coats. Congressman Paulsen.
Representative Paulsen. Thank you, Mr. Chairman. I want to
thank all of our panelists for being here today. It has been
really good testimony. As the father of four daughters, two of
whom are Millennials, this kind of strikes home.
I am worried about the challenges they face. I am also
optimistic about the opportunities that they have, and what
their generation, and your generation can certainly achieve.
As we have learned in this Committee, there are some
challenges facing this generation for sure. It took five years
just to reach the starting point in terms of making up for the
number of jobs that were lost since the recession ended. That
has never happened in our country's history before, where it
took that long.
It is also the first time ever in an economic recovery
where incomes have declined, median household incomes. So they
have certainly got some challenges that they are facing as they
enter the workforce, and as they've graduated and they have to
retire student debt.
Congresswoman Stefanik, let me just start here. I think you
are uniquely qualified to answer this question. Your testimony
covered some of the challenges and the opportunities facing
Millennials generally. I am hoping you might also share your
perspective specifically on the challenges and opportunities
that Millennial women face, and what should we be doing here in
Congress to help address some of those unique challenges?
Representative Stefanik. That's a great question.
If you look at Millennials, women are the majority of
college graduates today. That certainly was not the case if you
look back to our parents' generation. Also increasingly women
are the primary bread winners in their families.
So the economic decisions that are made by a family are
increasingly made by women. I think that it is incredibly
important as policy makers to reach out to our female
constituents, all of our constituents, but specifically talk to
people who are making those decisions in a family, which is
more and more falling on women's shoulders.
I know, you know, from a freshman Member of Congress
perspective, much of the case work that I focus on in my
District when I hear from seniors who are facing challenges
related to Social Security, Medicare, or appointments through
the VA, we usually hear from their adult daughter who is
helping them go through the federal bureaucratic process, and
they are trying to overcome some of the challenges that the
Federal Government has placed in their way.
So I think recognition of the growing importance of women
in our economy today, that the broader economic success of
women is directly correlated to the economic opportunity for
our country's future.
Representative Paulsen. I will let all of you comment on
this, because you have all mentioned how the workforce has
changed significantly from the time when many of us were first
entering it. Millennials entering the workforce hold very
different priorities and values in terms of a flexible schedule
and time off that some other generations did not care as much
about.
You talked about Uber and Pricewaterhouse for instance. In
the House we passed the Working Families Flexibility Act, which
will allow employers to offer private-sector employees time off
in lieu of wages for overtime.
Maybe each of you can give a comment about how should
Millennials' priorities guide our thinking as we consider other
future legislative initiatives?
Representative Stefanik. Yeah. So you're referring to the
Working Families Flexibility Act. I am a proud co-sponsor of
that legislation introduced by Congresswoman Roby.
I also think, you know, what I've learned in the Millennial
Task Force from the perspectives of companies who are trying to
attract and retain Millennials, it is the ability to create a
program that is flexible to work within your company.
So not this one-size-fits-all approach. Because if you have
thousands of individuals in your workforce versus a small
business like my family's plywood distribution business, you
are not going to be able to have the same government-mandated
approach. I think we should be encouraging that flexibility for
companies, again, to attract and retain Millennials.
Representative Paulsen. Mr. Meyer.
Mr. Meyer. One of the things I worry about when I see the
new proposal to raise the overtime limits are that a lot of
companies that don't fit into the target are going to be
affected.
So what people are looking at mostly when they're pushing
to raise the overtime limit are fast food establishments. But
they are forgetting about the large number of startups who
often pay their employees in equity, and a few of them are
paying entry-level employees over $50,000 a year. So now
things, such as telecommuting, are going to take a hit. You're
going to have to keep much closer track on your employees and
not have the option to offer flextime or comp time in addition
to working longer hours, which I know is something that young
people are very interested in.
Representative Paulsen. Ms. Mishory.
Ms. Mishory. You know, I would certainly reflect similar
comments on flexibility, young workers do value flexibility
much more than previous generations.
Young workers also tend to value the mission and really
working for something they believe in. That might be sector
agnostic. That doesn't mean they need to work for a nonprofit.
But really wanting to make sure that they are making a
difference. And those types of things show up again and again
in polling.
I do think that as we're talking about flexibility it is
important to note specific issues facing young families and
young parents. So, for example, access to paid leave, paid
sick, to be able to take care of a child who gets sick and be
able to also hold their job is critical for young families.
Representative Paulsen. Thank you, Mr. Chairman.
Chairman Coats. Thank you. Senator Cassidy.
Senator Cassidy. I thought you were going to the other
side. I'm sorry.
Representative, thank you for instigating and inspiring
this meeting. Thank you all. Frederich Hayek would be very
pleased with your testimony, Mr. Meyer. The regulatory agency
co-opted by the businesses.
Let me ask you all. ``The New York Fed recently pointed out
how those in the lowest quantile of college graduates really
don't do that well, relative to those without a college
education, in terms of income.''
Now we have been hearing a lot about the burden of student
loans. And to a degree it seems like everybody advocates
greater transparency. The student who is taking on the debt
should know this particular degree is more or less likely from
this particular institution to usher me into prosperity, or to
keep me chained to debt. With me?
I am not really sure how to accomplish that. The Federal
Government I think has just kind of thrown in the towel. So
what are your all's thoughts? Do you think there would be an
appetite for that high school grad to be able to look on and
see that St. John's, if you graduate from there you're going to
be testifying before Congress, but perhaps some place maybe
not?
I open that up.
Mr. Meyer. Well luckily the data is now publicly available,
but it is not that accessible at this point. So you can look on
the College Report Card, it's actually something that came out
about two months ago, a public database that the White House
put together.
Senator Cassidy. But as I gather, though, if you can go to
one university and get a degree in gender studies and really
have no option but maybe grad school, you hope, and from the
same place get a degree in engineering and have six figures as
your first job, I don't think that database necessarily
differentiates between programs within the same college. Am I
correct on that?
Mr. Meyer. There's also been quite a wide variety of
academic research where researchers have looked at Bureau of
Labor Statistics data on this, because the government started
asking for the 2010 Census what your major was. So people are
actually able to see this now.
But I would agree with you that it is not that accessible
to the public, yet. So while it is out there, people in policy
and people in government may be able to look at this, but your
typical high school senior, they're not going to be out pouring
through these databases. So something to make that more
accessible I think would be welcomed to try to turn around
the----
Senator Cassidy. If it were accessible, would it therefore
be accessed?
Mr. Meyer. I think it would, because right now data that is
often not mentioned is that 4 in 10 college freshmen still
don't graduate within 6 years. So we are pushing a lot of
students into a 4-year college where they don't know what they
want to study, and they don't realize that while college----
Senator Cassidy. That is a different issue than the quality
of education. I mean, if you go to, you know, a for-profit
which some are good but some are bad, and some are going to
charge high tuition, et cetera, et cetera, and you are going to
end up with a degree which is not worth very much, that is
different from not knowing what degree you want to end up in.
Mr. Meyer. That is true.
Senator Cassidy. Well one is a lack of maturity, and the
other is a lack of a quality option.
Ms. Mishory. I do think we are still missing a lot of that
data. So we do have more of the school-level data that was
released in the last few months. We don't have the program-
level data, which is I think what you're getting at, and
information that would be critical.
So when we hear from young people about how they are
thinking about schooling and higher education, they are
interested in finding a job, and they're interested in
bettering their lives.
Senator Cassidy. So if you put a different question, if you
go to this school with this degree, you're more likely to have
a job, and you're more likely to have this sort of debt load,
if you finish in four years, this if you finish in five, some
sort of algorithm that they can plug in their plans?
Ms. Mishory. Yeah. I mean we don't provide that information
right now, and we certainly don't provide it in a way that is
accessible for students and families to make decisions about.
Senator Cassidy. Okay.
Representative Stefanik. I serve on the Committee on
Education and Workforce on the House side, and this is an
issue--to answer your question--would young people access this
information? Absolutely. I think greater transparency in the
job opportunities after you graduate, what the median income
over the next 5 or 10 years, or even a lifetime would be, I
think we would have Millennials looking into to pursue higher
education degrees that will be more likely to lead to jobs.
But I also think that we need to have a discussion about
financial literacy when young people decide to take on these
student loans so that they can connect their debt burden with
their job potential afterwards with the data that you just
recommended.
Senator Cassidy. Okay, so it is actually a little bit, for
those who lack the maturity or the financial literacy, you
can't ensure that they would use this data accurately and
adequately, but nonetheless the first thing is you have to
provide the data. Fair statement?
Representative Stefanik. I wouldn't call it a lack of
maturity. I would----
Senator Cassidy. No, I just say that because, believe me, I
am very aware that some people start college and change majors
three times. And they end up in what they really want to do
from when they start, but maybe we are just defining it
differently but we probably both know folks like that, huh?
They think they want to be a doctor and they end up a lawyer,
or vice versa.
Representative Stefanik. And I think having that data about
what, for example, their annual salary will be after they
graduate, what percentage of graduates from a particular
program are able to find jobs immediately or in the first three
to six months, having that information will ensure better
decision making for an individual's future.
I also think we need to rethink how we provide higher
education today. So the average college student looks very
different than the average college student of 20 years ago.
They are slightly older. Oftentimes they are a single parent.
Increasingly they are Veterans and therefore older.
We want to encourage a faster, finishing your higher
education degree faster than what you referred to, Mr. Meyer,
as staying in college for six years.
So one of the bills I have introduced is Flexible Pell,
year-round Pell so that you not only can apply as a student for
fall and spring funding, but that crucial summertime where you
may want to continue pursuing your education so that you can
graduate earlier and hopefully not to continue to increase your
student loan debt.
Senator Cassidy. Thank you. I yield back.
Chairman Coats. Senator Heinrich.
Senator Heinrich. Representative Stefanik, first off I want
to thank you for your efforts on Flexible Pell. I share that
view, and I think it is particularly important in states where
we have a lot of nontraditional students who need to be in
school in summer, and who need to finish as quickly as they
can. So I would applaud your efforts on that front.
I want to talk a little bit about the issue that came up
earlier of climate change. You know, given the fact that we
have--my generation and previous generations--have created this
issue, which we are now shifting the burden for coming up with
a solution squarely onto the Millennial Generation, and
generations that come after Millennials like my kids,
effectively of posing attacks on GDP productivity in the
future. Oftentimes, as you know, that conversation you were
talking about gets bogged down into regulatory and policy
issues versus innovation and R&D issues.
I am just curious if you have thoughts about what some of
the private sector solutions are to addressing climate change
that you're excited about.
Representative Stefanik. Sure. So in my District we have a
number of exciting I think ways to help solve this generational
issue. One is biomass. Biomass is a growing sector in broadly
the Northeast, but specifically in my District. It is
affordable, and it helps address I think the long-term
environmental challenges.
I also think that, you know, one of the key points that I
didn't state before is, this is a global issue. This is not an
issue that the United States can go it alone. We need to reach
out to countries like China and India to make sure that they
are a part of the solution.
But I absolutely agree that we need to get beyond the
issues of regulation and actually talk about where we can
innovate, and where we can invest in research and development.
Senator Heinrich. One of the interesting innovations that
we have seen, and we were talking about how sometimes
businesses like to put up barriers to new innovative businesses
coming in and changing their business model. You know, I grew
up in a utility family. My dad was a lineman. But utilities had
a monopoly, and today we are seeing people become their own
power generators, not only with distributed renewables but also
by utilizing things like plug-in electric vehicles and other
storage devices on the grid.
Do you have any thoughts with regard to that particular
dynamic and what sort of policies we should have in place to
allow those innovations to continue to change the business
model and change the market?
Representative Stefanik. I think innovation is good for the
economy. I think it is important to recognize as a country
that, you know, the population density is very different. So I
represent a very rural District. Many of my constituents are
driving, you know, over an hour to and from work every day. So
we don't necessarily have the infrastructure to pursue that the
way potentially urban districts are trying to pursue that type
of innovation.
But as a Millennial, I am a believer in innovation. I think
that if the government gets out of the way, there are lots of
ways to solve this issue in the private sector and with
technology companies and renewable energy.
Senator Heinrich. Thank you. Ms. Mishory, I want to sort of
switch gears real quick, since we have the potential for seeing
a highway bill emerge from the Congress in the future weeks.
And one of my frustrations is that we have gotten away from
basically paying for things. Around here it's become more and
more politically difficult for many of my colleagues to
honestly pay for things.
And not only are we not funding infrastructure, new
infrastructure, brand-new infrastructure going forward at the
rates that we need, but we are not even really having the
decency to maintain all of the infrastructure that previous
generations have built and given to us.
And we have been coasting on that infrastructure for a long
time. So how can Congress support and improve--let me back up.
One example I'll give you is there's talk about how we're going
to pay for the current highway bill with things like,
literally, asking community banks for a stake in paying for
what is effectively a transportation infrastructure piece of
legislation.
So what should we be doing on the infrastructure front in a
way that honors the previous investment that generations have
made, but at the same time providing the Millennial Generation
with the foundation for success that they deserve?
Ms. Mishory. So it's interesting. We are actually running a
series of roundtables with young workers in Houston, Texas. We
have an office down there. To hear about the challenges they
are facing in the workplace. So finding jobs, wages, et cetera.
And this issue of infrastructure has come up because young
people are actually having trouble getting to work, getting to
interviews, being able to actually engage in the workforce
because of the infrastructure problems that they are seeing.
So I think it is an interesting issue that is impacting
young people in a variety of ways.
Chairman Coats. Thank you, Senator. Congressman Schweikert.
Representative Schweikert. Thank you, Mr. Chairman.
Can I pass down just a couple of these slides? And I lost
my representative--oh, fine. The one question I had for her.
[Laughter.]
One of the reasons I'm passing out this chart, you know,
we've had this discussion bounce back and forth, and I think
the proper term is cross-generational wealth transfer--but how
quickly some of these numbers, and what they do to your future
position in the world.
Mr. Meyer, when you hit--and I am going to assume right now
today you are in the top tax bracket--when you hit my age, your
tax bracket goes from 35 to 66 percent. And that is just your
federal income tax. That may not be the supplements that are
required to deal with Social Security, Social Security
Disability, Medicare. And that is baked into the numbers. That
is not one we get to fudge. That's not one we get to walk away.
So someone who is in college today, when they hit their
peak earning years, their federal income tax will be double
what ours are. And we have done this to the generation
following us. And that is the basic math.
And there is a question built in here, and that is: How do
you activate Millennials particularly to understand the
structural, you can call it the structural deficit, structural
financial destruction in many ways our fiscal policies have
done to them?
A good example is--and I am going to, Mr. Chairman, without
objection I would like to actually put this report into the
record--I as a Baby Boomer when I retire, I am going to be
about a quarter of a million dollars plus on the earned social
benefits I receive. A Millennial, you are basically going to be
about $180,000 upside down, where you are going to pay out more
taxes by about $183,000 than you are going to receive. But when
I hit Social Security/Medicare, I get a quarter of a million
plus side. And this is what we have done structurally.
Do you run into Millennials that understand what we have
done to you?
[The chart titled ``Marginal Tax Rates Must Nearly Double
to Fund Entitlement Spending'' appears in the Submissions for
the Record on page 61.]
Mr. Meyer. Millennials realize that Social Security
especially is facing funding problems. And actually a majority
of them don't think they are going to get any money back at
all, which isn't true.
But what is surprising is they still have pretty vast
support for the program, because they realize that there are
certain retirees who need----
Representative Schweikert. Do they support the concepts
that we have to rebuild and redesign them almost immediately?
Mr. Meyer. Yes, they do. Actually, over 7 in 10 Millennials
view private accounts as something that should be pursued for
Social Security. You can't even find a group of 7 in 10
Republicans who hold this view. So Millennials realize
something needs to change, and I am glad you brought up the tax
increases. But what I found is the most effective way to show
that young people are going to be paying a lot more for Social
Security is bring up that if nothing changes, in 2050 people
will be paying a 31 percent payroll tax.
So ignoring the income tax, ignoring all your housing or
rent payments, you are going to be losing almost a third of
your hard-earned income just to cover Social Security and
Medicare.
Representative Schweikert. You actually didn't have to
charge it to the payroll tax.
Ms. Mishory. Certainly Millennials are interested in
ensuring that Social Security is there in the long run.
Representative Schweikert. But the real 10,000 pound
gorilla here is actually not Social Security, it's actually
Medicare.
Ms. Mishory. And I think when we look at polling to see
where young people's priorities are, there is support for those
social safety net programs and ensuring that they are there for
the long run, and ensuring that they are there for their
parents. So I think there is interest in ensuring that those
programs----
Representative Schweikert. But when you--but, I mean you
hold forums and seminars, do you get feedback of any
understanding of the scale? Okay, it is one thing to say I
support there being the earned social, you know, entitlements,
the social safety net--the understanding of the scale of how
out of whack the numbers are?
Ms. Mishory. Yeah, I do think that there is--and again,
looking at polling and research data--there is certainly
interest in ensuring that there are not benefit cuts. In the
long run, that is the sort of research that we have seen, to
make sure the programs are there for their parents and----
Representative Schweikert. But once again, how do you make
that math work? I mean, at some point math is math.
Ms. Mishory. Sure. I mean, I think that when young people
are looking at how these programs will be here in the long run,
looking at some modest changes to make sure that they're there
is something that, you know----
Representative Schweikert. Modest changes don't shore it
up, don't come close.
Okay, look, Mr. Chairman, obviously I am hoping the panel
members get a chance to read over the report and some of the
actual numbers. There is something very creative that this
Committee could focus on. I know we care a lot about the earned
social entitlements being there in the future, but we are also
entering the world of the new economy.
Are we going to have to rethink how you fund these
programs? If I live in the world as an Uber driver, is there a
sliver on each Uber fare that goes to the social entitlement
accounts? I mean, we are going to have to rethink the future,
because the new economy, the hyper efficient economy where we
are all carrying a super computer in our pocket, is changing
things around us very, very fast, yet we still have sort of a
1930s mindset on how we fund, you know, these government
programs. And I am hoping somewhere here, you know, one of the
gentlemen on the end was being actually very creative in what
the future should look like. I think we are going to all have
to do that.
And with that, Mr. Chairman, thank you for your patience. I
yield back.
Chairman Coats. Well thank you. This has been a most
interesting subject, with a knowledgeable panel. We have a
little bit of time, if any of the Members here have additional
questions this is the time to ask them.
Ranking Member Maloney.
Representative Maloney. No.
Chairman Coats. Congressman Beyer, everybody has got work
to do. I think the most important thing I take away from this
is that we need to delve into this, as Congressman Schweikert
said, into a much more detailed hearing relative to how we are
going to address this coming over-the-cliff fiscal situation
and the impact that it is going to have on the younger
generation.
I am glad to hear that some of them are thinking about
this. But when I hear things that young people are concerned
about taking care of the older generation, it makes me say
shouldn't it be the other way around? Shouldn't the older
generation, which is benefiting way beyond what they have
contributed, be worried about what is happening to the younger
generation?
So that is an issue that needs a lot further discussion. I
want to thank our witnesses and panel for being here. Most
interesting, and I will include Congresswoman Stefanik, as
Millennials you certainly brought us a good deal of information
and a good deal of knowledge, and we encourage you going
forward in the future to help us work through these very
challenging issues.
With that, this Committee hearing is adjourned.
(Whereupon, at 3:23 p.m., Wednesday, November 18, 2015, the
hearing was adjourned.)
SUBMISSIONS FOR THE RECORD
Prepared Statement of Hon. Daniel Coats, Chairman, Joint Economic
Committee
The committee will come to order.
I would like to welcome our witnesses and thank them for being here
today to discuss important issues facing the Millennial generation.
Generally defined as those between their late teens and early thirties,
Millennials represent the largest generation in our country--as a
percentage of the population and as a percentage of the workforce.
Widely recognized as well-educated, tech-savvy, and confident,
Millennials should be successful in our modern economy. However, as
discussed in a report released by the Joint Economic Committee
yesterday, today the Millennial generation faces unprecedented economic
obstacles. Allow me to share a few:
Our economy continues to grow at an anemic pace, which
has significant implications for Millennials entering the workforce. As
noted by the Pew Research Center, the labor market recovery for
Millennials has been ``much less robust'' compared to recoveries
experienced by previous generations.
Millennials are receiving lower starting wages than
previous generations, and their education also comes at a higher cost,
saddling many Millennials with significant post-college debt
obligations.
As we noted in a recent JEC hearing on higher education
financing, higher student debt coupled with limited job prospects makes
it difficult for many Millennials to take out a mortgage for a home.
These same financial pressures also delay starting a family.
Growing government regulations continue to discourage
entrepreneurship, particularly for younger workers. The number of
people under 30 years old who own a private business has recently
fallen to a 24-year low, down to 3.6 percent from over 10 percent in
1989. This is certainly a disturbing trend, and one which threatens the
long-term health of our economy.
Finally, the federal government's long-term fiscal
challenges continue to cast an ominous shadow over Millennials'
futures. Our federal debt is approaching $19 trillion, of which each
Millennial owes a share.
For all the taxes that Baby Boomers and older generations
have paid into the Social Security and Medicare systems, they will
benefit, on balance, over their lifetimes. However, Millennials have no
shot at receiving fair value for the taxes they pay into a system
rigged for intergenerational theft.
This leaves Millennials to question not only the feasibility of
upward economic mobility and eventual retirement, but to question
whether the American Dream will be attainable for them at all. Because
federal policy has either created or worsened many of the most pressing
challenges facing Millennials, Congress has a responsibility to address
them.
I look forward to hearing today from our distinguished panel of
Millennial witnesses on ways we can create greater economic opportunity
for their peer group. I would like to thank, in particular,
Representative Elise Stefanik (Steh-FAWN-ick) for joining us today to
offer her perspective.
With that, I now recognize Ranking Member Maloney for her opening
statement.
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Prepared Statement of Hon. Amy Klobuchar, a U.S. Senator from Minnesota
Thank you, Mr. Chairman. I'm pleased the Committee is discussing
Millennials' Voices and the American Dream.
I would like to submit my questions for the record.
I would like to welcome all of the witnesses here with us today.
And I know that Representative Stefanik has a Minnesota connection
having worked for former Governor Pawlenty's presidential run in the
last election.
I believe the issues Millennials are facing reflect the changing
nature of work in an on-demand economy. That's why I will be holding a
summit in Minnesota next Tuesday, November 24th. I also recently held a
Steering and Outreach Committee meeting on this issue.
In that meeting and in your testimony, I have heard that while the
Millennial generation is the most educated generation and has access to
technology, they are still concerned about student loan debt. I have
also heard about the possibilities of the gig economy, and the concerns
about access to paid sick leave and paid family and medical leave and
the ability to save for retirement.
As our economy changes, we need to put in place policies that
continue to support the middle class so that the Millennials will have
every opportunity to achieve the American Dream.
__________
Prepared Statement of Hon. Carolyn B. Maloney, Ranking Member, Joint
Economic Committee
Thank you Chairman Coats for calling today's hearing.
Millennials are central to our Nation's economic, social and
cultural vitality. They are the largest generation--bigger than the
Baby Boomers--approximately 88 million people. They are also the most
educated and racially diverse generation in U.S. history.
But Millennials face significant challenges--in many ways far
greater than those experienced by the Boomers. Millennials generally
have higher rates of unemployment, lower incomes and more student debt.
Many Millennials have had no choice but to delay getting married,
buying a home and saving for retirement.
lasting effects of bush-era recession
These challenges were greatly magnified by the Bush-era ``Great
Recession.'' The recession was an economic catastrophe that deeply hurt
many Millennials and will have a lasting impact on them.
the recovery has benefited millennials
We have come a long way since the darkest days of the recession.
The economy continues to recover, the overall unemployment rate has
been cut in half, and businesses have added jobs for 68 consecutive
months, the longest streak on record.
Millennials have benefited substantially from this recovery.
Unemployment is down and wages are beginning to move up. This year's
college graduates will likely enter the best job market in years.
millennials fare poorly in comparison to the baby boomers
Yet significant problems remain.
It is useful to compare what Millennials are experiencing today to
what the Baby Boomers experienced a generation ago.
education
Many Baby Boomers with only a high school education could afford to
buy a house, raise a family, save for retirement and pass something on
to their kids. But most Millennials will need a college degree to come
close to matching that success--and will struggle longer to achieve it.
student loans
The question is how to pay for it.
The real median income for those households headed by a 25- to 34-
year old has fallen by nearly 10 percent in the past 15 years.
So more young people have been forced to borrow money to go to
college. The share of households headed by someone under age 35 with
student loan debt has more than doubled since 1989.
And they borrow more money too--with median debt tripling during
the same period. Some Millennials will end up paying back loans well
into their 30s, 40s and even 50s.
homeownership and housing
And because so many Millennials leave college with student debt,
they don't have the money for a down payment for a first home.
Homeownership for those under 35 years old has declined and is now
about 2 percentage points below its average in 1994.
Young people are even returning home to live with their parents.
The Pew Research Center finds that a larger share of women 18 to 34
years old are living at home (36 percent) than at any time since 1940,
when these statistics were first collected. And the share of men is
even higher.
policies to support millennials
I hope we can use the hearing today to not only understand the
scope of these problems but to also focus on solutions.
For guidance, let's look at the first rule of medicine--do no harm.
Let's start with education. Should we force students to rely on
private student loans that are more costly and come with fewer consumer
protections? No--the truth is that Millennials cannot afford it.
What about government spending? Should we slash spending so we have
a smaller government that provides fewer services? Fifty-three percent
of Millennials oppose that approach.
Let's turn to health care. Thanks to the Affordable Care Act,
uninsured rates for younger Millennials have been cut in half, as those
under the age of 26 are now able to stay on their parents' plans as
well as utilize exchanges across the country. Should we cave to efforts
to repeal the health care law? Of course not.
Millennials make up approximately seven in 10 workers who earn at
or below the minimum wage. Should we allow the right wing to block
efforts to increase the minimum wage? Clearly, no.
Should we privatize Social Security? No, instead let's come
together to pass modest measures to make sure that it will be strong
when Millennials need it.
Should we roll back consumer financial protections that help
protect Millennials from predatory practices? Some call this ``cutting
red tape.'' I call it dangerous.
But it's not enough to block destructive actions that hurt
Millennials. We must focus on targeted actions that will help them.
I will mention only a few.
We need to make college more affordable by strengthening federal
and state support for higher education, making tuition free at
community colleges and increasing investments in Pell Grants.
We need family friendly policies so Millennial parents can make a
living and raise their kids.
Let's repair our Nation's roads and bridges to lay the groundwork
for a stronger economy. If we don't do it now, Millennials will pay a
very steep price down the road.
And let's not ignore what will perhaps be the greatest challenge of
our time--climate change. We must fight those who claim that climate
change is a ``hoax.'' Failing to address climate change would leave an
unimaginable burden on Millennials and future generations.
conclusion
The challenges facing Millennials are real, but the solutions
exist. Our job is to help chart the course forward.
Let me close by saying that it's wonderful to have on our panel a
colleague from the House and member of the New York delegation. Elise,
welcome. I look forward to your perspective and to the testimony of
each of our witnesses today.
__________
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Questions for the Record for Mr. Jared Meyer Submitted by
Representative Maloney and Responses
Mr. Meyer, you testified that average household wealth for a
household headed by someone 65 or older is about 50 times the average
wealth of a household headed by someone 35 or younger. You also noted
this is a significant increase from the mid-1980s, when senior citizens
held only 10 times the wealth of younger households. Those are
staggering numbers.
It seems intuitive that older households will have accumulated much
greater home equity than younger households. How do the wealth ratios
change if home equity is excluded?
In 2011, excluding home equity, the median net worth of households
headed by an adult under the age of 35 was $4,151. In that same year,
excluding home equity, the median net worth of households headed by
someone 65 years and over was $27,322. Looking at recent retirees (65
to 69 years old), the median net worth excluding home equity was
$43,921.
I'm also curious if the ratios have changed as the economy has
recovered and Millennials have added to their wealth. What do the most
recent data show?
The most recent Census data are from 2011. In that year, households
headed by an adult under the age of 35 had a median net worth of
$6,682, and households headed by someone 65 years or over had a median
net worth of $171,135. The median wealth levels for all age brackets
increased from 2009 to 2011, but the level for households headed by
someone under the age of 35 increased by nearly 100 percent. Still, the
ratio between young and elderly households was 1:26 in 2011, compared
to 1:10 in 1984.
We discussed the challenges for Millennials of being saddled with a
growing national debt. But there are other types of debt that get
passed on from one generation to the next, which impose real costs on
young people. For example, doing nothing about roads that are falling
apart and bridges that are falling down assigns enormous costs to
future generations. Putting off needed infrastructure maintenance is
both risky and costly.
In your view, what are the costs of delaying investments in
crumbling infrastructure? Who is likely to absorb those costs? How does
failing infrastructure affect our economy and U.S. competitiveness?
While it is uncontroversial that America's federal, state, and
local infrastructure needs improved maintenance, some estimates of the
problem are overstated. For example, the American Society of Civil
Engineers givers the United States on a whole a ``D\+\'' for its
overall infrastructure. It also designates 11 percent of U.S. bridges
as ``structurally deficient.'' Though this term sounds dangerous, it
does not mean that there is any particular risk of failure. It is not
surprising that an organization of civil engineers desires $3.6
trillion of spending on infrastructure projects by 2020. Standing in
contrast to these findings are those of the World Bank. In 2014, The
United States ranked fifth in the world for the quality of trade and
transportation related infrastructure, behind only Germany, Singapore,
the Netherlands, and Norway.
Cost overruns for publically funded transportation projects
contribute to declines in the quality of America's infrastructure.
According to Bent Flyvbjerg, Mette Kamris Holm, and Soren Buhl, the
average cost overrun for large public transportation projects is nearly
28 percent. Since there are limited funds to spend on infrastructure
improvements, it is important for policymakers to ensure that the cost
estimates are more accurate and are provided under a wider range of
assumptions.
The cost of infrastructure projects should also more closely align
with the users. Technology has made tolls much more efficient, and
express lanes that charge higher fares during times of high congestion
are another solution to funding challenges. Additionally, with
increased access to low-cost airfares, it makes little sense for train
routes to remain subsidized, especially Amtrak's long-distance routes.
Shifting the burden of paying for projects from taxpayers to users
would create incentives for funding projects that make economic sense.
What should policymakers do to ensure that Millennials don't get
stuck picking up the bill for infrastructure investments that our
country should be making now?
Moving a greater portion of infrastructure funding and spending to
the state level or private sector would be a welcome step towards
maintaining America's transportation system. The problems with
federally-funded infrastructure investment are shown by the Highway
Trust Fund. The federal gas tax has stayed at 18.4 cents since 1993.
This has not kept pace with inflation, and increased fuel efficiency
means that vehicles are driving more miles for each dollar paid in
taxes. As vehicles continue to become more fuel efficient, state-level
actions to move towards a vehicle miles traveled tax, such as the pilot
program seen in Oregon, can help to sustain transportation funding.
The Davis-Bacon Act is an 84-year-old law that makes the cost of
federally funded infrastructure projects more expensive. The prevailing
wage requirement also prices lower-skilled construction workers out of
federally-funded projects in some highly unionized areas. To fund
infrastructure maintenance and improvement at a reasonable cost, the
Davis-Bacon Act's prevailing wage requirements should be reevaluated.
You testified about occupational licensing and some of the
challenges associated with different licensing requirements across
states as well as the fact that some professions, such as interior
designers and tour guides, are licensed in some states, but perhaps
don't need to be. You lauded President Obama's effort to support states
that introduce common-sense reforms of their occupational licensing
practices. Varying licensing requirements in different states and the
lack of transferability across states can be especially costly for
those who move regularly because of a spouse's or partner's job.
Can you point to research that analyzes the economic costs of
states' occupational licensing? Are you aware of research that analyzes
the impact of licensing on entrepreneurship?
Some of the best research on the economic effects of occupational
licensing has been done by University of Minnesota economics professor
Morris Kleiner. He also offers useful solutions to scale back
occupational licensing laws. Below are some of his articles that I have
found helpful.
Morris M. Kleiner and Alan B. Krueger, ``Analyzing the Extent and
Influence of Occupational Licensing on the Labor Market,'' Journal of
Labor Economics 31, no. 2 (April 2013), pp. 173-202.
Morris M. Kleiner, ``Reforming Occupational Licensing Policies,''
The Brookings Institution, January 2015.
As for the effect on small business owners, Thumbtack.com, in
partnership with the Kauffman Foundation, releases an annual survey of
small business owners. Licensing requirements were the most important
issues in determining a state's overall friendliness to small
businesses.
Jon Lieber and Sander Daniels, ``2015 Thumbtack.com Small Business
Friendliness Survey: Methodology & Analysis,'' Thumback.com, June 2015,
(email Jon Lieber at [email protected] for a copy of the paper).
To understand the scope and scale of licensing on a state-by-state
level, the best resource is The Institute for Justice's License to Work
report. The report shows which states license 102 low- or moderate-
income occupations, along with the average monetary and time burdens
each license requires.
Dick M. Carpenter II et al., ``License to Work: A National Study of
Burdens from Occupational Licensing,'' Institute for Justice, May 2012,
p. 16.
Do you agree with Representative Beyer's statement that excessive
licensing and other regulations often result from the efforts of
businesses trying to gain advantage over their competitors? What should
be done at the state or federal level to limit the impact of businesses
seeking competitive advantage through the licensing process?
Yes, I agree that many regulations are passed because large,
established businesses want to raise barriers to entry and reduce
competitive threats. Since occupational licensing and many other anti-
competitive regulations are a state and local issue, there is not much
the federal government (outside of the judicial branch) can do
directly. However, offering incentives to states that institute common-
sense licensing reforms, as President Obama has proposed, is a welcome
start.
__________
Questions for the Record for Ms. Jennifer Mishory from Congresswoman
Carolyn B. Maloney, Ranking Member, and Responses
Ms. Mishory, with states cutting support for higher education, too
many students have been forced to take on too much debt. As you stated
in your testimony, almost 70 percent of graduates of public and
nonprofit colleges in 2014 had student debt, and that debt averaged
about $29,000. I'd like to get your thoughts on proposals to make
higher education more affordable.
What impact would restricting access to federal student
loans have on Millennials?
How about cuts to Pell Grants?
What would be the impact of increasing the market share
of private student loans?
How do consumer protections differ between federal and
private student loans?
The Federal Direct Loan program is an essential tool to ensure that
Millennials have access to institutions of higher education, and
restricting access to that program would damage Millennials' ability to
pursue the credentials they need to succeed in a 21st century economy.
Millions of young people rely upon loans to complete the financial aid
package they need to attend school, as evidenced by the fact that 71%
of 2015 bachelor's degree recipients graduated with student loan
debt.\1\ Limiting access to that assistance for undergraduates is
likely to have long-term negative consequences on attainment rates and
the skills gap we face. Loans should always be the final, not first,
piece of a financial aid package for students, and students should be
educated about the requirements--but claims that increasing financial
aid access have driven up tuition lack conclusive evidence, according
to the non-partisan Congressional Research Service.\2\ Limiting access
more than we already do would cut off opportunities for low- and
moderate-income college students.
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\1\ Jeffrey Sparshott, ``Congratulations, Class of 2015. You're the
Most Indebted Ever (For Now),'' The Wall Street Journal, May 8, 2015,
http://blogs.wsj.com/economics/2015/05/08/congratulations-class-of-
2015-youre-the-mostindebted-ever-for-now/.
\2\ ``No Causal Link between Federal Student Aid and Higher
Tuition,'' The Institute for College Access and Success, October 8,
2015, http://ticas.org/sites/default/files/pdf/
no_causal_link_between_federal_student_aid_and_higher_tuition.pdf.
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Even more important for low-income students is access to Pell
Grants, a program that has made college possible for millions of
Americans without requiring young people to take on debt.\3\ Pell
increases college enrollment among low- and middle-income students, and
a majority of African-American and Hispanic undergraduates rely on Pell
to go to school.\4\ Despite a proven track record of success, the
purchasing power of Pell has declined over time as college has become
more expensive, making it vital that we scale investments in the
program to ensure low- and middle-income students can begin and
complete their degrees.\5\
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\3\ ``U.S. Department of Education, ``Fiscal Year 2016 Budget
Request: Student Financial Assistance.'' http://1.usa.gov/1E8G0Mv. Page
Q-20.
\4\ ``Pell Grants Help Keep College Affordable for Millions of
Americans, The Institute for College Access and Success, March 13,
2015, http://ticas.org/sites/default/files/pub_files/overall_pell_one-
pager.pdf.
\5\ Ibid.
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The result of restricting Pell grant or student loan access could
be cutting off access to higher education for some students and also to
increase reliance on private student loans, since they would be the
lender of last resort for many young people trying to access or remain
in school.\6\ This would add complexity to a system that already offers
several types of loans and aid that students have trouble discerning
among, and move students into private markets that charge higher
interest rates than federal loans, raising debt levels. Moreover,
private loans routinely lack essential consumer protections like
deferment, forbearance, and income-based repayment plans with
forgiveness options, which are essential to providing relief on
payments when a borrower's earning power is low.\7\
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\6\ Lucy Lazarony, ``Private Student Loans: What to Watch Out
For,'' Credit.com, August 24, 2010, https://www.credit.com/loans/
student-loans/student-articles/private-student-loans-what-to-watch-out-
for/.
\7\ ``Federal vs. Private Loans'' Young Invincibles, October 2,
2012, http://younginvincibles.org/federal-vs-private-student-loans/.
Since 2010, Millennials have been able to remain on their parents'
health insurance until they turn 26 years old. Before the Affordable
Care Act (ACA), young adults would often lose coverage when they turned
19 or finished college. The uninsured rate among individuals ages 19 to
25 has been cut in half since passage of the ACA. In other words, a
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larger share of Millennials now have health care coverage.
What are some of the benefits of a greater percentage of
Millennials being insured? Does this have an impact on their health? On
overall health care costs? Have you heard directly from Millennials on
how the ACA has helped them--if so, please share a few examples.
Have we also seen a reduction in job lock for
Millennials--where Millennials are able to switch jobs without being
worried about losing health insurance? How can this affect their
careers and future success?
Higher insurance rates among young people boost the long-term
health of this generation and help protect us from financial pitfalls.
Young people need access to affordable health care services: about 15
percent of young adults have chronic conditions,\8\ young women in
particular need access to preventive care, and 19 percent of
Millennials have reported suffering from depression, making access to
mental services particularly important.\9\ Insurance coverage protects
against high out of pocket costs when accessing this care, and
encourages young people to proactively seek these services when they
need them. And new ACA-compliant plans are required to offer both
mental health services and preventive care. As a result, the ultimate
impact on increasing insurance rates on the health of this generation
could be enormous.
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\8\ Sara R. Collins, Elise Gould, Bisundev Mahato, Jennifer L.
Nicholson, Sheila D. Rustgi, and Cathy Schoen, ``Rite of Passage? Why
Young Adults Become Uninsured and How New Policies Can Help, 2009
Update,'' The Commonwealth Fund, vol. 64 (August 2009). http://
www.commonwealthfund.org//media/Files/Publications/Issue%20Brief/2009/
Aug/1310_nicholson_rite_of_passage_2009.pdf.
\9\ Michelle Castillo, ``Millennials are the most stressed
generation, survey finds,'' CBS News, February 11, 2013, http://
www.cbsnews.com/news/millennials-are-the-most-stressed-generation-
survey-finds/.
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But insurance also protects against even larger potential financial
calamity. Young people tend to end up in the emergency room more than
any other age group under the age of 75,\10\ resulting in costs that
can be devastating. It should not be surprising then that over half of
uninsured young people say that they have problems with medical bills
or are paying off medical debt that could have been avoided had they
had insurance.\11\ Enrollment in plans that cap out of pocket costs
reduces the number of young people facing these kinds of bills and
debt.
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\10\ Sally H. Adams, Claire D. Brindis, Charles E. Irwin, Tina Paul
Mulye, M. Jane Park, ``The Health Status of Young Adults in the United
States,'' Journal of Adolescent Health, no. 39 (2006). http://
smhp.psych.ucla.edu/pdfdocs/healthstatus.pdf.
\11\ Sara R. Collins, Ruth Robertson, Tracy Garber, Michelle M.
Doty, ``Young, Uninsured, and in Debt: Why Young Adults Lack Health
Insurance and How the Affordable Care Act Is Helping,'' The
Commonwealth Fund, June 2012, http://www.commonwealthfund.org//media/
files/publications/issuebrief/2012/jun/
1604_collins_young_uninsured_in_debt_v4.pdf.
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Additionally, research has shown that as many as 1.5 million people
will be released from job lock and able to work independently due to
the ACA.\12\ According to the Center on Health Insurance Reforms at
Georgetown University, the Robert Wood Johnson Foundation, and Urban
Institute, that figure is primarily because of the non-discrimination
and financial assistance portions of the law.\13\ Being freed from the
tether of employer-provided health insurance can allow many Millennials
who want to start small businesses a way to work toward achieving that
goal.
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\12\ Linda J. Blumberg, Sabrina Corlette, and Kevin Lucia, ``The
Affordable Care Act: Improving Incentives for Entrepreneurship and
Self-Employment, Timely Analysis of Immediate Health Policy Issues,''
The Center on Health Insurance Reforms, et al., May 2013, http://
www.rwjf.org/content/dam/farm/reports/issue_briefs/2013/rwjf406367.
\13\ Ibid.
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We have seen numerous young people benefit from the ACA in these
ways. In Austin, Texas, we spoke with Kim D., a young entrepreneur,
working to start her own marketing firm. Without employer-based
insurance, Kim didn't have access to affordable health care until the
ACA. Kim enrolled on the marketplace in the first open enrollment
period, and was able to continue pursuing her dream without relying on
health care from her job. Without this kind of freedom, Kim may have
abandoned her small business for more traditional work--stifling her
creativity and the boost she brings to the economy. In other cases, we
have seen the ACA save lives. Hristina R. of DC was constantly denied
health coverage because of a brain tumor before the ACA. In early 2014,
she gained health insurance for the first time in years. A mere few
weeks after getting covered, Hristina started experiencing alarming
symptoms and decided to head to the emergency room. Hristina had to
have emergency surgery for an ectopic pregnancy--a condition that could
have taken her life. Having health insurance not only allowed her the
ability to seek care, she also avoided a medical bill that could have
reached as high as $30,000. The financial and health benefits provided
by the ACA to Millennials like Kim and Hristina have been life
changing, and emphasize the importance of preserving the law.
__________
Questions for the Record for Mr. Jared Meyer Submitted by Senator Amy
Klobuchar and Responses
apprenticeships
Mr. Meyer, the apprenticeship program in Minnesota--the PIPELINE
program--is a national model for workforce development and post-
secondary education. This program began by determining standards in
four high-growth industries--health care, information technology,
advanced manufacturing and agriculture. The goal of this part of the
program is to establish standardized and portable credentials that are
transferable from employer to employer.
In your testimony you discussed the lack of
transferability of credentials. How would standardized and transferable
credentials benefit the workforce and entrepreneurs?
Due partly to federal student aid (see my testimony ``The
Unprecedented Debt Burdens Facing Millennials'' submitted to the House
Budget Committee on September 9, 2015), the cost of four-year college
has risen drastically. Thankfully, the United States has an extensive
network of affordable community colleges. As long as the credits gained
at community colleges are transferable to four-year colleges, students
have a more affordable path to a bachelor's degree.
Technical schools also offer promising paths to employment in in-
demand fields. Working with businesses to develop curriculum that
enables graduates to stay on top of their skills, as Minnesota's
PIPELINE Project does, is a welcome step towards filling the technical
skills gap.
The modern economy is changing rapidly, and skills learned in
school alone fail to prepare American workers for success. Education
has always been a life-long process, but it is even more necessary
today. In addition to partnering with employers to inform curriculum
and encourage training, accreditation of successful online education
platforms is another policy solution that deserves attention.
__________
Questions for the Record for Ms. Jennifer Mishory Submitted by Senator
Amy Klobuchar and Responses
retirement savings
Ms. Mishory, we have all heard that Americans are not saving enough
for retirement--that there is a savings crisis. In your testimony, you
point out that Millennials have saved less at this point in their lives
than previous generations.
What policies would help Millennials increase their
savings rate?
The increasing burden of student loan debt is hurting the
ability of many Millennials to save. What other barriers are limiting
the ability of Millennials to save? How can we address those barriers?
There are number of factors that seem to be driving the negative
savings rate \1\ held by Millennials. We have seen lower wealth
accumulation following wage stagnation and the lasting impact of the
Great Recession (which hit youth employment levels the hardest).\2\ We
have also seen a well-documented, staggering increase in the amount of
student loan debt held by young people today, which means more money is
going to pay down debt rather than save for the future. And the
increase in part-time and contract work, including the most recent rise
in the more flexible ``gig'' economy, has combined with the decline of
traditional pension and benefit plans to create the need to rethink
traditional retirement account structures and savings vehicles.\3\
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\1\ Josh Zumbrun, ``Younger Generation Faces a Savings Deficit,''
The Wall Street Journal, November 9, 2014, http://www.wsj.com/articles/
savings-turn-negative-for-younger-generation-1415572405.
\2\ Drew DeSilver, ``For most workers, real wages have barely
budged for decades,'' Pew Research Center, October 9, 2014, http://
www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-
have-barely-budged-for-decades/; Derek Thompson, ``Millennials'' $2000
Poorer Than Their Parents Were at the Same Age,'' The Atlantic, http://
www.theatlantic.com/business/archive/2015/01/young-adults-poorer-less-
employed-and-more-diverse-than-their-parents/385029/.
\3\ Emily Hong, ``Making It Work: A Closer Look at the Gig
Economy,'' Pacific Standard, October 23, 2015, http://www.psmag.com/
business-economics/making-it-work-a-closer-look-at-the-gig-economy.
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Tackling these challenges is critical. Certainly policies that help
low- and moderate-income young people build wealth, such as reasonable
increases to the minimum wage, an expansion of the Earned Income Tax
Credit to childless individuals under 25 years of age,\4\ or reducing
barriers to getting a degree in growing fields with growing salaries,
can all help. Additionally, reducing student debt burdens by expanding
income-based repayment plans and including tax-free forgiveness,
increasing uptake in Public Service Loan Forgiveness, and providing
refinancing options packaged with consumer protections, would all go a
long way toward freeing up income that could be saved by young people.
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\4\ Chuck Marr and Chye-Ching Huang, ``Strengthening the EITC for
Childless Workers Would Promote Work and Reduce Poverty,'' Center on
Budget and Policy Priorities, February 20, 2015, http://www.cbpp.org/
research/strengthening-the-eitc-for-childless-workers-would-promote-
work-and-reducepoverty.
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We are also at a critical juncture in rethinking workplace
retirement policies, given the decreased access to benefits and
changing workplace. Incentivizing businesses to offer tax-free benefit
plans and contribute to their employees' retirement accounts is a
start, but other policies to help young people access these options may
be needed (see below).
You also noted in your testimony that Millennials have more job
mobility than previous generations. Recently, the Treasury Department
launched their myRA plan to help workers who do not have a retirement
savings plan at their work. This account would move with the worker
from job to job.
What are your thoughts on this account? What policies
would improve these accounts?
How can we make retirement savings plans more portable?
MyRA is a welcome foray into the area of portable retirement
savings. It allows individuals with a relatively low level of income
and without access to an employer-sponsored retirement plan to put away
some money when they otherwise may not be saving.\5\ The $25 initial
deposit and low semi-monthly contribution requirement make savings more
of a reality, and the flexibility of rolling over those funds into a
Roth IRA at any time is also a strong feature of the account.\6\ Some
have suggested future changes such as diversifying investment
opportunities for higher returns or financial incentives like tax
credits to get more businesses to sign up and offer myRAs.
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\5\ See generally, myRA, https://myra.gov.
\6\ Ibid.
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gig economy
Ms. Mishory, in your testimony you note that one of the trends
we're seeing with the Millennial generation is a shift to part-time,
temporary and contract-based employment. For some the flexibility of
moving from ``gig'' to ``gig'' is something they chose. For others,
this is a result of changing employment patterns.
With this shift, what policies can we put in place for
American workers to help with changing employment patterns? How could
we help workers earn paid sick leave or paid family and medical leave
in an economy with changing employment patterns?
What policies would help Millennials save for a rainy day
or their retirement?
As individuals continue to pick up part-time, on-demand, ``gig''
economy work, it's vital that benefits associated with that work travel
with them as much as possible. That includes retirement accounts and
health care benefits as provided by new options like myRA and the
individual ACA exchanges, but also encouraging employers to offer
programs of their own for ``gig'' employees. It is also time to review
how we classify these employees to address the legal uncertainty in the
market and preserve protections and benefits for workers.
Paid sick leave and paid family leave are critical policies that
provide financial stability for young workers, and Young Invincibles
supports the FAMILY Act and the Healthy Families Act to create these
policies nationwide. We have also seen innovations on the state level.
In Rhode Island, New Jersey, and California, paid family leave is
administered through the state and funded by employees, so individuals
can access it on their own.\7\ These programs have shown to increase
economic security for new families, improve health outcomes, and
benefit businesses through increased employee loyalty and reductions in
turnover.\8\ Paid sick leave laws have also spread--now to four states
and 20 cities--and have similar benefits for workers and employers.\9\
It is critical that state and federal policy conversations consider
part-time and contingent workers when pursuing these reforms, and turn
to employers to ask for financial contributions given the benefits to
their businesses.
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\7\ ``State Family Leave Insurance Laws,'' National Partnership for
Women and Families, February 2015, http://www.nationalpartnership.org/
research-library/work-family/paid-leave/state-paid-family-leave-
laws.pdf.
\8\ ``The Family and Medical Insurance Leave Act,'' National
Partnership for Women and Families, March 2015, http://
www.nationalpartnership.org/research-library/work-family/paid-leave/
family-act-fact-sheet.pdf.
\9\ ``Paid Sick Days: Good for Business, Good for Workers,''
National Partnership for Women and Families, August 2012, http://
www.nationalpartnership.org/research-library/work-family/psd/paid-sick-
days-good-for-business-and-workers.pdf.
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There are also increasing state-level innovations around retirement
plan access. For example, in Illinois, by 2017, businesses will be
required to offer a plan to employees that will be run by the state in
an investment pool and funded by paycheck withholding.\10\ In
Washington, a marketplace has been established to facilitate people
learning about private plans and encouraging small businesses to match
employee investments in their retirement accounts.\11\ Opportunities
like these could significantly expand pathways for Millennials to save
and build wealth, and those reform conversations should also consider
part-time and contingent workers.
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\10\ Tom Anderson, ``Is Your State Getting Into the Retirement
Business?,'' CNBC, June 9, 2015, http://www.cnbc.com/2015/06/09/is-
your-state-getting-into-the-retirement-business.html.
\11\ Trent Gillies, ``Retirement Options Dwindle and States Step
In. But Should They?,'' CNBC, November 8, 2015, http://www.cnbc.com/
2015/11/06/retirement-options-dwindle-and-states-step-in-but-should-
they.html.
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[all]