The nation’s largest generation since the Baby Boomers were welcomed into the labor force with a shrinking job market, insane amounts of debt, and no experience to fall back on. Thus, 32 percent of the Millennial population were driven back to their childhood homes, as Pew Reserch reported this year.
But while current statistics indicate that the majority of America is getting back to work and starting to recover eight years after the beginning of the recession, one thing remains the same: Millennials are not leaving their parents’ homes. In fact, the rate of Millennials moving back in with their parents and families is increasing.
It’s all about the Benjamins
The end of the recession has been official as of 2009, according to the National Bureau of Economic Research. Even Mercer, a renowned global consulting agency, found in their annual Compensation Planning Survey that the average worker received pay increases of about three percent in just the last year. But the Millennial demographic specifically has seen a continuous decrease in average wage by almost thirteen percent over the last decade.
Unemployment, along with the seldom discussed underemployment, act like gasoline on the fire. Young workers have historically always had higher rates of unemployment when compared to other age groups, but Millennial unemployment rates hit an all time high in 2010, and currently show no signs of dropping. One and a half million degree-holding Millennials were unemployed or severely underemployed in minimum-wage positions, according to a study by the Associated Press in 2012.
But let’s look at the bright side. The average wage of a full-time worker between the ages of 18 to 34 is about $34,000. This sounds like a fair wage on the surface, until you factor in the rise of the cost of living in the United States. According to the Economic Policy Institute, the median cost of living is about $35,000. That doesn’t leave much room for saving or investing. In fact, it leaves miles of room for borrowing.
According to a report from Pew Research, the median amount of debt for Millennials is $73,000 for those with degrees, and $3,000 for those without. However, for individuals who took out student loans, the median debt for those with degrees increased to an astounding $137,000, and $28,000 for those without.
Cecil Bohanon, an economics professor at Ball State University, points out that Millennials, and all college students, shoulder this debt to make more money over their lifetime.
“I think the point to be made is that if student debt did go away, that means someone else is picking up the bill,” Cecil said. “Somebody’s going to be reducing their consumption on one margin in order to finance the acquisition of education for somebody else, so the drag on the economy, it seems to me, doesn’t make a whole lot of difference. It seems reasonable to say that those that are getting the benefits of education should bear some of the lionshare of the cost and if that necessitates borrowing than so be it.”
Like Cecil, American society believes that the best way to find a more stable job and achieve economic mobility is attending college. In most ways, it still is. But with the amount of student debt outpacing student enrollment, the dismal job markets, and stagnant mobility, it’s no wonder Millennials are shunning the old way of doing things.
What all of these averages and percentages mean is that there is an increasing gap between incentive and payoff for Millennials. And so, 26 million adults have turned to the people they have relied upon their entire lives: their parents.
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