A Grim Outlook for a Young Generation

December 13, 2011

Ask anyone under 25 today what it’s like to be young in America and you'll likely hear the same answer: it’s tough. New data supports this idea. The report State of Young America: Economic Barriers to the American Dream looks at the numbers behind the youth experience. Two organizations teamed up to write the report - Demos, a non-partisan public policy research and advocacy organization, and Young Invincibles, a non-partisan youth organization that seeks to expand opportunity for all Americans between the age of 18 and 34.

Expanding opportunity, particularly in the job market, has been particularly difficult for young people during the Great Recession. Unemployment for young Americans hit a 60-year high, according to the Bureau of Labor Statistics' 2010 Youth Unemployment Summary. Even more striking are the staggering unemployment levels among minority youth: 31 percent of young blacks and 20.1 percent of young Hispanics are jobless.

This has implications far beyond spending money and summer jobs to keep busy. Unemployment early in life has also been shown to have negative consequences not only for future employability and life-long earnings, but also for job satisfaction, health and happiness. So the current rates of unemployment mean that 4.1 million young Americans are at a distinct long-term disadvantage.

This is not a new development. The report notes that our nation has faced growing inequality over the past 30 years, driven largely by low-income jobs for less-educated workers, the rising costs of college, and increasing housing, health care and child care expenses.

But pair this trend with the fact that employment rates for young people never rebounded from the 2001 recession, and the result is a generation facing ruin, say the reports’ authors.

Unemployed and Underemployed – The New Norm?

In 2010, young people between 18 and 24 faced the highest unemployment rates in the country.

But just finding a job isn’t the only problem Millennials face. More than one-quarter (29 percent) of young Americans are underemployed—eager to work full time but stuck instead in part-time jobs—compared with 13 percent of Americans over 35.

The report notes that young veterans are hit especially hard in this economy, despite their service to the country. Unemployment for Gulf War II veterans between 18 and 24 is not only higher than that of the civilian population, but their median earnings are lower as well. Veterans ages 24 to 25 fair better with higher median income, but they too face higher unemployment rates than civilian counterparts.

The Gender Gap is Alive and Well

While all young workers are struggling to get by, there are some striking facts about the differences in experience for young men and young women in America.

Since 1980, the typical earnings for young men working full-time have decreased by 10 percent, from $42,400 to $38,000. During the same period, typical earnings for young women working full-time have increased by 17 percent, from $29,115.55 in 1980 to $34,000 in 2010.

But don’t let that shiny double digit increase fool you—young women still earn less than men of the same age overall; about 90 cents on every dollar or $34,000 to $38,000. (It’s worth noting that in 1980, women earned 69 percent of men’s earnings. So overall, we’re headed in the right direction.)

Unfortunately, young men and women with only a high school diploma today earn $10,000 and $2,550, respectively, less than they did in 1980.

The gender gap grows even wider when education levels are factored into the equation. Women with a high school degree earn 77 percent of their male counterparts’ earnings; college-educated women on average earn 84 percent of the salaries their male peers command. Young women with at least a bachelor’s degree saw a 20 percent increase over the past 30 years, while young men saw only a 1 percent increase, although men’s wages remain higher overall.

Higher Education, Health Care, Housing and Raising a Family

Common wisdom holds that to achieve the American Dream,you have to get a good education. Do that and you’ll find a job that enables you to support a family.

College graduates are still a minority of young people.

Unfortunately, getting a good education has become increasingly difficult for most young people. Demos and Young Invincibles note in the report that while college enrollment is growing, college graduates are still a minority of young people. Just one-third of Americans between 25 and 34 have a bachelor’s degree or higher, up from one-quarter in 1980, while one in 10 young people have an associate’s degree.

Nearly half of the students that enroll in college never finish, due at least in part to the increasing costs associated with earning an undergraduate degree.

More students are working longer and enrolling part-time to offset these costs, a situation that makes academic success more difficult.

Student loan debt is also on the rise and projected to hit $1 trillion dollars in the coming year. The average student graduates with more than $24,000 in student loans. That’s too much for some to repay: default rates on student loans topped 15 percent of graduates in 2009.

Once students leave college—with or without a degree—they face challenges getting affordable health care and housing.

The number of young people (ages 18 to 24) without health insurance rose from 28 percent in 2007 to a record high of over 30 percent in 2009—a total increase of 813,000. The Affordable Care Act may be one source of light on the horizon. Since it was enacted, the share of uninsured 18 to 24 year-olds has dropped by 2 percentage points to 500,000.

And then there’s rent. The share young people’s income consumed by rent has risen to 32.1 percent. That’s driving a significant number back home to Mom and Dad. Nearly half of all 18 to 24 year-olds are living with their parents. They are also delaying marriage and starting families until later in life. When they do start a family, more young mothers are working and utilizing alternative child care options.

So, What's Next?

At a glance, the numbers risk appearing demoralizing and intractable; it seems hard to find the silver lining in this seemingly very dark cloud.

But Young Invincibles has set that very goal for themselves.

In 2012, Young Invincibles will launch a Campaign for Young America to “turn the energy, hope and frustration about the economy and lack of opportunity into concrete policy and a way forward for our generation and country.”

Given the size of the Millennial generation, the group is betting that it will become a powerful force, capable of changing the direction of country – and keep the Millennials from becoming the first generation that is “worse off than our parents.”

We’ll be watching.

For more information about Young Invincibles' Campaign for Young America contact Maya Brod at maya.brod@younginvincibles [dot] org


Tara James is SparkAction's Senior AssociateOutreach and Engagement. You can reach her at tara@sparkaction.org.

Tara T James