The Truth Behind 20-Somethings' Misery
When it comes to 20-somethings and money, everyone seems to have a different opinion.
After USA Today published a story on high debt levels held by recent college graduates last month, a letter to the editor criticized the young woman featured in the story for using an iPad while shopping. "If she can barely scrape by, perhaps she could use a pad and paper and shop at a regular grocery store while she saves up and pays her bills. Why must today's youth live like they are rich when they are not?" wrote the presumably middle-aged reader.
When U.S. News wrote a similar article on the tough job market for young people, older readers accused 20-somethings of being spoiled brats. In response to the finding that half of young adults have taken jobs they don't want in order to pay bills, a commenter calling himself "old unemployed guy" wrote, "The shock! The horror! It's called being a grown up and it really sucks. Fortunately there is a support group that meets at the corner bar every night."
And as Hannah Seligson reports in the New York Times this weekend, there's a brewing activist movement among young people committed to improving the dismal job market. The Campaign for Young America and Fix Young America are both working to improve job opportunities for recent college grads. In the related comments, readers argued over whether 20-somethings really do face a tougher job market than other generations.
Even popular television shows have jumped into this debate. In the opening scene of HBO's new show Girls, Hannah, a 23-year-old college grad living in New York City, flips out when her parents tell her she's cut off--they're not giving her anymore money. As two professors, they simply can't afford it anymore, her mother says, and besides, her mom wants to afford luxuries of her own, such as a lake house. Why should they continue paying Hannah's rent, two years after college graduation?
Despite all this back-and-forth about young people's prospects, it's not entirely clear just how depressed they should be about their economic future. Amid some good news--according to the National Association of Colleges and Employers, companies say they will hire 10.2 percent more grads from this year's class of graduates compared to the previous year, and they'll also pay them more--there are also unnerving reports. A recent one from the Pew Research Center found that employment rates among young people between the ages of 18 and 24 are at an all-time low, at 54 percent, and those who are employed full-time have experienced a bigger drop in weekly earnings (6 percent) than any other age group.
Or there's the research from the Yale School of Management's Lisa Kahn, who has found that students who graduate into a recession are likely to continue to face the negative effects from that recession, including higher unemployment rates and lower incomes, in some cases even 15 years after graduation. Research by Payscale.com also suggests that salaries flatten out after age 40, which means unemployed 20-somethings have a limited window to land jobs, ramp up their earnings, and settle in before salaries level off.
Taken together, these reports paint a complicated picture of post-collegiate life in America today. On one hand, well-educated young adults with the resources to muddle through unpaid internships or low-paying jobs until they land better ones seem poised to ride out the lingering effects of the recession. Meanwhile, a subsection of that group is gainfully employed at growing companies and barely noticed the recession at all. But young people without college education or the resources to grow their skills during these lean years face a tough road ahead, and could find themselves trapped in lower-paying jobs for years.
Some financial gurus, including Zac Bissonnette, author of the new book, How to Be Richer, Smarter, and Better-Looking Than Your Parents, insist that 20-somethings can be better off, as long as they make smart financial decisions, including avoiding debt like the plague. Holding onto that kind of optimism might be the only way move forward in the face of such economic headwinds.
