Washington establishment vs. millennial.

Batkins, Sam

Disinherited: How Washington Is Betraying America's Young

By Diana Furchtgott-Roth and Jared Myer

152 pp.; Encounter

Books, 2015

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From spending money and passing on the bill to the next generation, to forcing the young to subsidize health care premiums of seniors, and passing licensing laws that place countless hurdles in front of new entrepreneurs, there are plenty of regulations that burden younger Americans. In Disinherited, Manhattan Institute scholars

Diana Furchtgott-Roth and Jared Myer blend personal anecdotes from millennials (those born between the early 1980s and the early 2000s) and relevant data that lend empirical support to the premise that federal and state policies routinely disfavor the young.

Furchtgott-Roth and Meyer survey three main policy areas: wealth transfers from young to old, a broken education system, and regulatory policies that disproportionately target youth. Not to proclaim all doom and gloom, they also devote a section of the book to reform proposals. While not entirely novel, their prescriptions for change offer a fresh perspective on the tired "rich vs. poor" debate and ask whether the real controversy is "old vs. young."

Typically, millennials are hardly a source for sympathy because they are often complicit--if not downright supportive--of the policies that harm them. But the same generational scorn could have been leveled against previous generations. Millennials might be difficult to appreciate, yet reversing many of the policies that currently harm them would do a great deal to enhance economic freedom in the United States.

Wealth transfers/Even casual observers of public policy know about the unfunded government mandates that the current generation and its progeny will soon have to face. Rather than focus entirely on Social Security and Medicare, the book unravels the Affordable Care Act (ACA) and its financial imposition on younger Americans. The law's modified community rating ensures that the oldest enrollees can be charged no more than three times what the youngest, healthiest enrollees are charged. For consumers in New York, the old age band was 1:1, which explains why the state's individual market utterly collapsed before the federal government started dispensing subsidies. In a surprise to few health economists, last year 27-year-old men experienced a 91 percent premium spike because of the law. Senior citizens and middle-aged Americans saw premium increases at a fraction of that rate.

The Congressional Budget Office offered fuel to the anti-ACA argument recently, finding that full repeal of the law would boost employment and wages, and add 0.7 percent to gross domestic product. This comes on the heels of a CBO report last year that found the United States would lose the equivalent of 2.5 million full-time workers by 2024, mainly because of labor incentives in the ACA. As Furchtgott-Roth and Myer argue, this has a disproportionate effect on the young, likely cutting their hours and making their labor more expensive.

Bad apples in education/Much ink has been spilled over the years evaluating the "military industrial complex." The "education industrial complex" should receive similar scrutiny, including its implications for students and new teachers. The authors argue that teachers unions and tenure make it nearly impossible for qualified new teachers to enter the market and for poorly performing ones to exit expeditiously. The problem, the authors note, is not pay, as the average teacher receives $57,000 in direct compensation. The problem is that it's virtually impossible to fire bad teachers.

In Chicago and New York City, only one in 1,000 teachers loses his or her job for poor performance, and in Los Angeles fewer than 2 percent are denied tenure. Yet, graduation rates in those jurisdictions barely top 50 percent. These policies not only hurt the youngest among us--students--but they also create state barriers to entry for new teachers.

To remedy those problems, Furchtgott-Roth and Myer push for school choice, namely charter schools. They cite research finding that the average charter school student in New York City could be expected to close 86 percent of the Scarsdale-Harlem achievement gap. This gap compares one of New York's wealthiest neighborhoods (Scarsdale) to one of its poorest (Harlem). School choice is hardly a novel solution to the nation's educational maladies, but the book does well to demonstrate how failed education policies disproportionately harm the young.

We don't need no regulation/The authors spend the third part of their book deconstructing the regulatory state and incumbent protections that harm start-ups and the young alike. Chief among the regulatory evils are licensing requirements that increase costs, present barriers to entry, and limit opportunity. Americans are routinely told that there is a "fundamental right to work," although some constitutional scholars might quibble. However, the government routinely inserts itself into determining the qualifications of yoga instructors, hair braiders, and makeup artists.

For Melony Armstrong, who aspired to start a hair braiding business in Tupelo, Miss., the fundamental right to work clashed with a yet-unknown "hair lobby" in the state. She was required to undergo 300 hours of coursework to obtain a "wigology license," which is something that unfortunately exists in this nation. This mandated training didn't contain a single tip on braiding hair. Before expanding her business, she was required to complete an additional 3,200 hours of classwork. As the authors note, in the equivalent amount of time she could have been licensed as an EMT, police officer, firefighter, paramedic, real estate appraiser, hunting instructor, or ambulance driver. Fortunately, Armstrong sued and the governor relaxed the hair braiding regulatory morass to a $25 fee and compliance with basic hygiene rules.

Beyond licensing rules, the authors spend a chapter reviewing perhaps the most infamous of regulations: the minimum wage. Despite the plethora of academic studies highlighting the folly of wage and price controls, populist politicians can't resist the urge to correct inequality through what they view as a "free" program. There is no direct federal or state outlay for raising the minimum wage and low-income employees receive a pay bump, so everyone wins. What the politicians ignore is that the biggest hurdle to crossing the poverty line is getting a job. Creating artificially high costs for labor makes it more likely that many--specifically younger--Americans will fall on the wrong side of the labor pool. As a result, the youth unemployment rate is already nearly double the overall rate and labor participation rates are lower as well. Yet, there are still "serious" policymakers who ignore this evidence and proclaim that a teenager in the rural South should be paid the same wage as one in Scarsdale, N.Y. This lunacy is naturally lost during the tired debate over wage controls.

Conclusion/The rise of millennials, who now outnumber baby boomers, should be treated as the start of a new chapter for the nation. Yet, as Furchtgott-Roth and Myer demonstrate, state and federal policies routinely disfavor the young. As the first generation in history with a risk of enjoying a lower standard of living than their parents, there are tremendous risks for the nation and for economic liberty if they falter.

SAM BATKINS is director of regulatory policy at the American Action Forum.