Equity Between Generations

Poverty among the elderly is giving way to affluence,
while children are swelling the numbers of the poor

One of the articles in Caring For Families (IC#21)
Originally published in Spring 1989 on page 26
Copyright (c)1989, 1997 by Context Institute

A society such as ours makes its most concrete statement of priorities in the form of a budget. The more important we (or our government) hold something to be, the more money we spend on it. In our last two issues we explored some of the hidden costs of spending such large amounts of money on defense. Sam Preston now directs our gaze to another swollen spending category whose problematic aspects – especially with regard to the support of families – are more subtle.

Preston is past president of the Population Association of America and a demographer who directs the Population Studies Center, U. of Penn. His work (as well as that of fellow demographer Kingsley Davis) on the increasing impoverishment of children and the growing affluence of the elderly has been credited with bringing much-needed attention to this delicate but significant issue.

The problem is not so much that children and the elderly are competing for scarce resources in a zero-sum game; rather, there are structural problems in the way we set priorities that leave children – our future – out in the cold. Fortunately efforts are under way to address this situation, led by such groups as Americans for Generational Equity. To learn more, contact them at 608 Massachusetts Ave. NE, Washington, DC 20002.

Alan: "Generational equity" has become a kind of a shorthand term referring to several related trends in the way resources get distributed between generations in our society. Can you describe these trends?

Sam: Well, the term itself is not one that I’ve used, although people charge me with having written about generational equity, and I suppose in a general sense I have. The trends I tried to document in my Scientific American article [December, 1984] suggested that childrens’ well-being has probably declined on many measures in the past 15 or 20 years, while the relative well-being of the elderly has increased. That comparison is seen most vividly in economic measures, particularly poverty indicators, which showed a clear rise for children in the past decade and a clear and very rapid decline for the elderly. The elderly used to be the poorest group – that is, they had the highest incidence of poverty in the country. But by the early 1980s children had clearly replaced them.

Another factor that subsequently emerged is that the average incomes of families with children have not deteriorated as much as the income distribution has. Over the last ten years the United States has become a much more unequal society in terms of income and wealth. So a combination of factors have pulled more and more kids below the poverty line.

Also, such indicators of mental health as we can find – suicide rates, survey responses – also suggested improvements for the elderly and some deterioration for children, at least as reported by their parents. And what struck me as curious about these trends was that they occurred at a time when children were declining in numbers, which demographers tend to think of as a clear-cut advantage for a population group, and the elderly were growing rapidly, which demographers view as a disadvantage.

Alan: How did you first get interested in these trends? What magnetized your professional curiosity?

Sam: I can’t point to a particular episode. A demographer has lots of things coming across his desk, information from national statistical systems and so forth, which I tend to glance at. Suddenly I saw a pattern that had not been pointed out previously – a deterioration in conditions among children in many different dimensions. So my interest was empirically driven.

Alan: What are some of the driving forces behind these trends?

Sam: When you turn your attention to children, the first and most important of all problematic social trends is the change in the American family. At this point, 22% of kids are born out of wedlock, and about half of the kids born in wedlock will see their parents divorce in the course of childhood. So fewer than half the kids in America spend their full childhood with both parents. And when a breakup occurs, in most cases the father does not make child support payments, and usually he does not see his child on even an annual basis after the first year or two.

So to use the sociological jargon, a changing social construction of the family has occurred in ways that may have increased satisfaction for adults, but there are bystanders to the process: the children, who have not done very well. My figures suggest that the breakup of the family – that is, the increased incidence of children living only with their mother – was responsible for about 45% of the increase in poverty between 1970 and 1982.

The second factor is that incomes for younger persons, including heads of young families, have not done well in the past 15 years – in fact they’ve decreased if you use a constant price index. To some extent this reflects the difficulties of absorbing the "baby boom" generation into the labor force. But it also reflects a very slow rate of national economic growth.

Alan: Despite what the pundits tell us?

Sam: Yes. It depends on what measure you look at. If you look at per capita income, we’ve done well. Part of the reason is that there are fewer kids, and that by itself would tend to cause per capita income to rise. There has also been a flood of women into the labor market, which has increased workforce participation rates among adults in general. But at the same time, we’ve had a very low rate of growth in labor productivity, which is probably the key indicator of economic success.

A third factor is that while these things have been occurring within the family and within the economy, their effects could have been off-set by social policy. But in fact, social policy during this period – the late 1970s to the present – has tended to look the other way. The major programs for supporting children (Aid to Families with Dependent Children) were cut back about 35% between 1970 and 1985 according to Senator Moynihan’s office. So I think those three factors have combined to cause the problem of increasing poverty among children.

Alan: What other changes in American society might also be contributing to the trend?

Sam: Well, at the same time that we’ve had these problems for children and cut back in their social policy positions, we’ve also had an unprecedented expansion in benefits for the elderly. Now I see that as reflecting, above all, a series of self-interested motives. Not just among the elderly – in fact, programs for the elderly remain very popular across the board, especially among middle-aged people, and for two reasons. One, most middle-aged people now have at least one elderly living parent. And two, most middle-aged people are concerned with their own well-being, their own welfare when they retire.

Programs for the elderly are also seen as virtually costless – you put a lot in now, but you’ll get it all back later. And there is a complex of motivations operating here. Older people obviously have an interest in lobbying, or voting if you will, for themselves. Younger people also have an interest in voting for those programs both because they are concerned about certain elderly people and because they are concerned about themselves when they get older.

Obviously, two of those three sources of support aren’t there for children. Children don’t vote on behalf of themselves, and adults don’t vote on behalf of their own childhood. That’s over and done with – there’s nothing they can do to affect it, whereas they can affect conditions under which they retire. So that constellation of motives has just come further and further to the surface, to the point where now slightly over half of our federal domestic expenditures, excluding interest payments, goes to support Social Security, Medicare, and federal retirement.

And this trend is evident in most developed countries. It’s not unique to the United States. What is unique to the United States are the terrible, declining conditions among children. The circumstances in Japan, for example, are radically different, in good measure because the Japanese family has stayed together. Kids are growing up with both parents. Younger parents are doing better economically. As a result, Japanese kids are sharing in the economic boom whereas most American kids have stopped doing so.

Alan: How have older Americans reacted to the news about this trend?

Sam: The reaction to my article among organized groups of the elderly was initially very hostile. The AARP [American Association of Retired Persons] called me "America’s leading crusader against the elderly" in an editorial in their journal, Modern Maturity. They later retracted the story, but in any event the initial hostile reaction was based on several factors: one, I appeared to be threatening programs for the elderly which are need-based – at least the rhetoric surrounding them is need-based – and if you point out that the elderly as an aggregate group are no longer as in need as they used to be, it threatens the expansion of those programs.

Two, they pointed out that there are many pockets of elderly. Of course black elderly are not doing very well, and very old women are not doing very well. So the picture in terms of averages can be somewhat misleading. That’s true of any kind of average in the social sciences, although a proportion of people in poverty is not, strictly speaking, an average. It’s an indicator of a distribution.

Alan: In other words, the numbers of people who actually qualify as being in poverty.

Sam: Right. Over time, however, I have sensed that the elderly – especially in the AARP – recognize that the problems among children are problems that affect older persons as well.

The basic point I was aiming at, not as explicitly as I might have been, was that in some ways we’ve lost our sense of national or collective purpose. We’ve begun to see ourselves and our society as a collection of individual motives – to feather our nests, to get what we can out of society. If that kind of mind-set dominates public policy, if it’s just a bunch of groups competing for resources in a zero-sum game, then children are going to fall further and further behind.

It takes a conscious national effort to say, in the trite phrase, "the children are our future." Well, they are the future of the labor force, and they are an important entity in and of themselves if our nation is going to have better future prospects than it has at present. This kind of approach was much less prominent by the early ’80s than it had been, say, in the late ’60s; after all, the "war on poverty" of that era was pitched at children. We’ve got to have more of a sense of a collective future, a collective responsibility, in view of the fact that the sense of private responsibility for children is declining.

Alan: How does this thinking translate into possible solutions?

Sam: Well, the basic solution is, I think, to adopt some kind of child allowance scheme of the kind that most European countries and Japan have – that is, a payment to parents of dependent children linked to the number of children in the family. The parent gets a certain amount for clothing, food, etc. – it’s much like how we pay people who are over 65 for being over 65. I’m afraid that’s a pie-in-the-sky answer, because I don’t see us going that way.

I think many of the problems of children are also functions of what’s going on in the educational system. That’s something I believe we’re addressing. The falling state of American education has been widely documented, and it got a lot of publicity in the early ’80s. That led to initiatives at the state level, and most states have sharply expanded their budgets for education.

We also need a better functioning welfare system, but I don’t think that’s going to solve all of our problems. The problem of poverty among children is largely a result of family difficulties and macro-economic difficulties.

But I also feel that a change in the climate of opinion is probably more important than any specific change in social policy. When you point out a problem, there’s a tendency for people to say "Well, what’s the government going to do about it?" I see the problems of American children as reflecting a greater degree of selfishness and self-interested behavior, as well as a lack of social concern, on the part of adults. This comes out in private behaviors toward children – particularly in the case of fathers – and also in social behaviors, such as cut-backs in welfare. It’s a pattern of change that we were not fully aware of, and I think seeing it, and seeing the consequences of it for kids, is a start toward getting us back on track.

Alan: That kind of broad change in public opinion usually only comes about through public education efforts and social organizing of various kinds.

Sam: I think that’s right. This is very speculative, but I think people are able to see collectively the consequences of their collective decisions and adjust personal behaviors accordingly. You can see instances of that in World War II, for example, where an immense national threat was vivid and visible, and people’s behaviors responded. There was much more self-sacrifice on the part of large numbers of the population.

I hope this is not equivalent to a war, but if this problem continues, it’s going to seriously erode national performance on any measure you want to develop. It’s already affecting the skill-levels of the labor force very badly among younger entrants to the labor force. If you look only at white collar jobs, our higher education system is still working quite effectively. But the two-thirds of the population that’s not going to graduate from college is really less well-equipped than their parents’ generation, for the first time in American history. That’s been said a number of times recently, and perhaps it’s trite – but we make the assumption that progress is the birthright of every American, and it’s just not the case at this point.

I think the publicity that these trends are starting to get will help make us more conscious that we are in effect involved not only with our own children, but with other people’s children. That’s the connection that’s hardest to make: that we have an interest, a national interest if not a specific self-interest, in seeing that we do a better job of raising the next generation.

On the other hand, what’s going to happen to restrain the growth of benefits for the elderly? The elderly resist this idea, and some of their organized representatives have become a special lobbying group of the kind that you see in every walk of American life. And at this point, I’m worried. I’m less worried about whether we can make changes among children than I am about whether we can restrain the growth of spending for the elderly, which is competing increasingly with every other social budgetary item. I don’t mean there’s specific competition between children and the elderly, but the elderly-oriented budget is simply growing to the point where it’s pushing out a lot of other potential initiatives, given the fact that we don’t like to pay taxes. And we’re not going to start liking taxes any more in the future.

Alan: What about the size of the elderly population? Is it still growing?

Sam: Actually we are entering a period when the growth of the elderly is slowing, because people who are turning 65 were born in the low-fertility 1920s or 1930s. But the elderly population is going to continue to grow fairly rapidly, because mortality has declined for those groups. The over-85 population will continue to grow very rapidly.

I saw a poll recently listing a variety of public programs and asking which ones people would most like to see expanded and which ones contracted, and I think 78% of the population wanted to see medical programs for the elderly expanded and only 2 to 3% wanted to see them cut back. Despite the fact that we are now spending so much on older people, there is still a tremendous demand to expand such programs.

Alan: That gives you some concern?

Sam: Yes, it does, because I’d like to think that we could do other things in society besides spend money on ourselves as older people. It’s not clear to me where the restraint is ultimately going to come from for that part of the federal budget.

I thought the catastrophic health insurance plan that was passed last year was a very good program for older people, because of the great uncertainty about who’s going to need long-term care, and I also thought it was a good thing that the elderly were basically going to pay for it themselves. But I’ve heard recently that there’s been a tremendous outcry on the part of a variety of older people (not including in this case the AARP, which I think has been very responsible) that the tax – which is a surcharge on the elderly’s income taxes – should be rolled back and the expenses of the program spread more widely. Now it seems sensible to me to have the elderly pay for more of their own care, because they are a relatively well-off group.

Alan: And the tax scheme for this program is a progressive one.

Sam: Right. There are lots of very poor older people, but they’re not paying income tax in the first place.

Alan: Does anybody talk about redistributing the budget from areas like defense spending towards programs for children, so that this doesn’t have to be a zero-sum game between children and the elderly?

Sam: Yes, that’s a very common reaction, and it certainly makes sense. Spending on the elderly now exceeds spending on defense, but defense spending is the second largest element in the federal budget. I have personal hopes that this will change, and I think it’s important to point out – it’s important for everybody to point out – that the defense budget is also crowding out other domestic initiatives that we could be taking. Opinion polls show an emerging national consensus that we don’t need to increase spending as rapidly as we have been, at least on defense. And perestroika is really adding fuel to that view.

Alan: What about the individual family? How are they feeling the effects of these changes in concrete terms?

Sam: That’s an interesting question, and this may or may not answer it. We have a pair of social surveys from 1957 and 1976 that asked identical questions -how you view your marriage, how you view your children, what expectations you have about other people in their performance of parental roles, marital roles, and so forth.

There was a huge change between 1957 and 1976 in the way people answered these questions. Both marriage and childbearing were seen as far more restrictive of personal freedom in 1976 than they had been in 1957. Likewise we were much less ready to label an unmarried parent as socially troublesome in ’76 than we were in ’57. I think we revised our whole understanding of family relationships during that period.

The effect of this revision caught up with us in the late ’70s and early ’80s. I think we allowed ourselves to become a society more interested in self-fulfillment and personal gratification than the fulfillment of social expectations in the family. Ron Lesthaeghe, a good sociologist from Belgium, traces this trend all the way back to the Reformation – western societies have just developed, over time, a much more individualistic way of looking at the world, and the family was the last holdout.

I find some merit to that argument, but I think a number of other things were involved. The growing availability of contraception during the period from 1957 to 1976 made it much less important to tie sex to marriage. Also this was the period when the environmental and population control movements grew dramatically, so it seemed much less necessary to bear children. I mean, it almost seemed a socially damaging act to have kids.

We form these norms and values by somehow reading our subconscious, looking at the effects of what we’re doing, realizing that they’re good or not so good, and then creating expectations about behavior in general – both our own and other people’s – that are based on our perception of whether or not we’re going down the right road. The road we were on in the ’50s was probably seen as damaging to the environment and restraining both men and women from doing things that they valued. There has been a general change in the way we look at the world, and a relaxation of social pressures to conform. I think we in American society want to avoid as much as possible having other people make stringent demands upon us.

But look at Japan, where those demands are still in place. Yes, they’re eroding to some extent, but fewer than 1% of children in Japan are born out of wedlock, the divorce rate is 1/3 of the divorce rate in the United States, and much less is expected out of a marriage romantically. Japanese people are involved in more social aggregates that reduce some of the pressure on marriage to be the "be-all and end-all" for individuals. In any event, Japan now seems to me to be around where we were in the 1950s. 96% of kids grow up living with their parents; it’s the Ozzie and Harriet family, Japanese style. Are we going to go back to that? Who knows?

Alan: And do we want to?

Sam: Good question! Look what we’d be sacrificing by doing so! But I think it’s important to see what’s been happening, and in my view this changed set of expectations about parenthood and marriage is the single most important factor in the changing conditions of children.

Look at the Mormons in Utah, where things are very different. They have the lowest illegitimacy rate and the lowest divorce rate in the west. I’m not saying we should all become Mormons, but it’s important to recognize what that sect is telling us. It’s telling us much the same thing Japan is: it is possible to live in a society where people’s relationships are very different from the way they are in the United States today.

The social construction of the family in those cases is somewhat more satisfactory for children and somewhat less satisfactory for adults. That’s a trade-off that we’re only very dimly aware of. If we don’t go back down that road, my guess is that we’re going to have to take better care of kids through social policy.

There are two polar types of countries, in both of which kids are doing very well. Sweden, on the one hand, has a very major set of social programs that work. For instance, something like 48% of kids now being born in Sweden are born out of wedlock. That’s not to say there isn’t a father present who visits the child (though in many cases there isn’t). But social policy is so elaborate and so protective in Sweden that, if you look at measures like poverty, kids are still doing extremely well there.

On the other hand there’s Japan, where the welfare state is really negligible and much less visible than in the United States, but where private responsibility for children is still highly developed. We neither have the great sense of private responsibility that Japan has, nor the sense of social responsibility that Sweden has. I think we’re going to have to move toward one of those poles, and it’s not clear to me which.

But I don’t think we’re going to be happy seeing each new generation come out with a higher level of emotional difficulties than the preceding one, or getting worse schooling, or being characterized by more impoverished childhoods. It’s not something that a healthy society wants to see happening. And if you’re a cautious person, you would have to say that the most obvious solution is to move toward the Swedish system because changing social norms and values is a very unpredictable process. I don’t think anybody understands much about how that happens.

Alan: Certainly few people understand how to catalyze change in that regard.

Sam: I agree, so we need to monitor the situation very closely. But I sense that in the next decade there is going to be a real revival of interest in the conditions of children, and we’ll probably be going the "war on poverty" route again: a much greater assumption of social responsibility.

Do NOT follow this link or you will be banned from the site!