Growing up, deferred: college grads without jobs
The great recession has hit young adults ages 18-34 harder than any other age demographic, a recently published report by the Pew Research Center reports, but America's younger generation still believes the tenets of the American Dream are achievable -- although they are much harder to come by now more than ever before.
Competition for jobs among younger adults has many postponing major life decisions, while others have been forced to take jobs they don't really want just to generate income, the report finds. And the difficult job market, combined with additional years of higher education in order to "get a leg up," has added several years of financial dependence upon parents.
Although the national unemployment rate in January of 2012 was 8.3 percent, the U.S. Bureau of Labor Statistics reports, the unemployment rate for youths ages 18 to 19 was 20.5 percent. Unemployment for young adults ages 20 to 24 was 14.2 percent for men, and 12.3 percent for women. The sagging job market has forced the nation's younger generation to rethink their goals, yet they still remain hopeful for a bright future, the Pew report finds.
Among the reports major findings:
Financial goals are more difficult to achieve -- but hope remains
Eighty-two percent of people polled say it's much more difficult now for young adults to reach the same financial goals their parents have achieved. Seventy-five percent say it's harder to save for the future, while more than two-thirds agree that paying for college or buying a home has become tougher. But 88 percent of adults ages 18 to 34 remain optimistic about their financial futures.
Andrew Schrage, 26, knows a lot about saving money and reaching financial goals. Schrage graduated with a degree in economics from Brown University and worked in Chicago at an investment fund as a portfolio analyst before striking out on his own to co-found Money Crashers Personal Finance.
Though he had a strong grade point average and the cachet of attending an Ivy League university, he considers himself fortunate to land a job in today's economy -- his employment search took him to many different cities. However, Schrage still feels that he can reach many of the same financial goals as his parents.
"The idea of the American dream is still there and still within reach for people not only of my generation but all generations, even people just being born," Schrage says. "The landscape has changed, and over the last few years it has been especially rough with unemployment at 8 to 10 percent. But the dream still is there; it just has become a lot more competitive. More and more people are getting a college education, and lot of avenues that our parents could follow for a nice clear path to financial stability are a lot more saturated."
Adults today have to be more creative, Schrage says -- going to college or attending business school is not a sure bet anymore. Financial independence now means finding the right niche for your talents, and it also requires a great deal more drive and hard work.
Working sometimes means settling -- and waiting
For many, it's harder than ever to make ends meet. Forty-nine percent of young adults polled say they have taken jobs that don't adequately use their skills in order to pay bills, and nearly one-third say the hard economic times have caused them to delay major life milestones such as getting married or starting a family. Nearly a quarter of survey respondents had moved back in with their parents after living independently.
Schrage says he has many friends and acquaintances that settled for jobs or took jobs outside of their chosen industry or career path because employment options are so limited.
"Unfortunately the situation is that there are some very highly educated people who could do great stuff at any company, but they don't have any options available; there just is not the job market out there," he says.
Adulthood has been delayed
The Pew Research Center cites a 1993 poll conducted by Newsweek that found 80 percent of parents feel their children should be financially independent by age 22. Today, the Pew center says, that number has dipped to 67 percent. Nearly one-third agree that financial independence should occur after age 25.
Saving money at a young age is nearly impossible, Schrage says, due to the rising costs of school tuition and length of study. Financial independence rarely can be achieve until the later 20s, when careers are more established and salaries have a chance at outpacing living expenses and debt occurred with student loans, he says.
"It is not very reasonable to expect someone 22 or 24 years old and just a few years out of college to be financially independent -- especially if they are going to graduate or medical school. Unless parents can help pay for education and some of your living expenses, it is really difficult to avoid student loans, car loans and anything in those areas," explains Schrage.
"People in their late teens and early 20s, there are not a lot of people in a position where they have built up a nest egg or are prepared if they lose their job or have health issues," says Schrage. It is not because of financial irresponsibility, it is just the way our economy is set up. Education and cost of living have far outpaced salaries, making it difficult for us to save than it was for older generations."
Last December the Pew Research Center of Washington, D.C. polled 2,048 adults across the nation, including 808 adults ages 18 to 34. The Pew report also uses information gathered from the U.S. Bureau of Labor Statistics.