Younger people are putting off marriage, children and buying homes because they lack financial security — unstable jobs and too much student loan debt.
That’s one of the interpretations of a new report from the Census Bureau on Millenials. (1)
In looking at generational change, the report compares 18 to 34-year-olds in 2016 versus 1975. In looking at just the older portion of this group, 25 to 34-year-olds, there are striking differences:
- 1975: 45% lived on their own, were working, had married and had a child.
- 2016: 24% live on their own, are working, have married and have a child.
From the point of view of the economy, the difference is huge. Buying a home drives spending on furniture and appliances, as well as painters and a range of other services. Having children drives demand for larger cars and clothing. Doing neither reduces spending in all of these categories.
The average income for 25-34-year-olds in 1975 was $30,101. In 2016, it was $43,751. That sounds good until you factor in inflation.
- A salary of $30,101 in 1975 dollars is worth $134,283 in 2016 dollars.
- The percent of people with student loans has climbed from 17% in 1975 to 41% today.
More people have gone to college, but they’re paying more for education in order to earn functionally less than their parents.
The report also notes that among the growing percentage who live with their parents, there are issues with health or grandchildren that interfere with employment. There’s also an issue with a cohort of younger white males who lack a college degree and have very limited employment prospects.
As long as politicians ignore these trends, efforts to keep the economy going will run out of steam. In this context, Andrew Cuomo, the government of New York, seems especially prescient in eliminating college cost as a burden for many New York residents.
Vespa, Jonathan, “The Changing Economics and Demographics ofYoung Adulthood: 1975–2016,”Current Population Reports,P20-579, U.S. Census Bureau,Washington, DC, 2017.