Young people perceive that something is amiss with the economy they’ve inherited. According to an extensive survey of young Americans released yesterday by Demos and Young Invincibles, nearly half of 18 to 34 year-olds believe they’ll be worse-off than their parents. In fact, they already are.
Seizing the opportunity to alter their fates, participants in the Occupy Wall Street demonstrations point to rising inequality, reduced financial regulation, mounting debt obligations, and the lingering recessionary effects of the financial crisis as sources of their current unease, and they struggle toward a vision of a different world. Some of these factors are just the most recent evidence of the business cycle sinking to its predictable trough, but many have been brewing since before the Millennials were born.
In real terms, only the most educated workers are earning what their parents did a generation ago, and the gap in earnings between those with a college degree and those without has grown. At the same time, tuition and fees at public 4-year institutions more than tripled and the availability of financial aid failed to keep up with the rising costs. Average student loan debts are at an all-time high:
Compared to their parents’ generation beginning adulthood in the last-worst recession of the early 1980s, money is tighter, post-secondary education is more vital, and the burdens of those early-life investments necessary to establish financial security last far longer and are far more severe.
And unlike their parents before them, young people today can expect less protection from the fluctuations of the economy even when they do have a job. Employer-sponsored health insurance has declined significantly. Traditional defined-benefit pension plans have all but disappeared. Unions safeguard just half as many workers now as they did in 1983. For young people in 2011, landing a good job is not what it used to be.
No wonder, then, that the new generation of workers is making decisions differently than their parents, and looking to the future with a sense of prevailing caution. Some observers lament the arrested development of today’s young adults, citing their unwillingness to leave the nest and become financially independent. But considering the trends outlined above, and detailed in Demos’ State of Young America Databook, these “grown children” are simply being rational and prudent in the face of a 30-year decline in the economic conditions of young workers
Take, for example, this poll result:
Forty-six percent of 18 to 24 year-olds and 26% of 25-34 year-olds have delayed moving out from their family home specifically because of the economy. In fact, more than half of young men and nearly half of young women still live with their parents:
The trend reveals as much about the need for pooled resources in tough times as it does the attitudes of young people.
The generation that chaperoned the deterioration of economic security now faces the boomerang effects of their decisions as young adults rely to a greater degree on their families for the stability lacking in the economy as a whole. And it is not only the older generation affected by this insecurity, but the next as well. A quarter of young adults report delaying marriage and 30% delayed starting a family due to economic conditions. Moreover, 37 percent rank their anxiety over being able to afford to send their future children to college a 10 out of 10. With the seeming instability of economic conditions, the traditional markers of adulthood have been postponed, and the family planning is just one locus of the effects.
But despite the actuality of a generation suffering from 30 years of failure to protect their standard of living, and despite the reality that young adults are making their major life decisions with an air of defeat – accepting crippling debt burdens, going without health care, and acceding stagnant earnings as a practical certainty – these young people still hold hope for the future. Sixty-nine percent of them believe their generation can live the American Dream. What that dream will mean, exactly, as young workers take the reins of political and economic decision-making will be shaped in part by the lowered expectations imposed by the trends of the past 30 years. Assuredly, it will not be their parents’ American Dream.