Over 1 Out Of 3 Millennials Now Live With Mom and Dad
More young adults are living with their parents than ever before in the past 40 years. But they're not just the stereotypical unemployed college graduates.
According to a Pew Research Center analysis released earlier this month, 40% of 18- to 31-year-olds with a high school degree or less, and 43% of those with some college education, were living at their parents' home in 2012.
Although 36% of America's millennial generation — (young adults aged 18-31) — lived at home last year, those with a college degree seemed to fare better, with just 18% living at home in 2012.
"This phenomenon of increasingly living with mom and/or dad, this is more concentrated among the less educated," said Richard Fry, a senior economist with Pew Research Center.
With an anemic job market, rising tuition costs and surging real estate prices, millions of millennial who don't have a college degree just can't seem to get a break painting a grim picture of the slowly recovering economy — particularly for this demographic. And due to the recovery's painfully slow pace, millennials may find themselves living under their parents' roof for much longer than expected.
Often seeing it as a financial lifeline, returning to the nest after college and even into the thirties is becoming more common and less stigmatized for millennials which could lead them to stay longer with their parents.
"I don't see any stigma at all anymore. The stigma would be a sense of wistfulness that they wished they were independent. I see more often a sense of real appreciation for the safety net," said Lauren Riklee, executive in residence at the Boston College Center for Worlk & Family, who is writing a book on millennials in the workforce. "By and large, it's really interesting to watch because in many respects, it’'s become normative because the options are so limited. Home is the place where they take you in."
While the option of returning home after graduation is becoming more comfortable for new graduates, the chances of trying to make it alone in a few years are looking slimmer.
Even if a young adult is lucky enough to land a job or internship, chances are the work may be temporary, part-time, or poorly compensated. The options for a non-college educated millennial are even more dire since he or she would also have to compete with college grads willing to take on a job that may not require a college degree.
The Economic Policy Institute has even suggested that with the average wage dropping since 2000 for college graduates, millennials are entering the workforce during "a lost decade" where young workers' labor market prospects are an apt barometer of the strength of the overall labor market. In other words, so long as there is wide-spread unemployment for millennials, the overall labor market will suffer as well leaving us in a disappointing cycle.
According to the Pew report, the rise in millennials returning to the nest "represents a slow but steady increase over the 32% of their same-aged counterparts who were living at home prior to the Great Recession in 2007 and the 34% doing so when it officially ended in 2009." A closer look at the research also shows a rise in non-college educated millennials aged 25-31 who still live with mom and dad, hindering their desire to become independent adults and financially afford the traditional milestones that come with it like buying a house, getting married, and maybe starting a family.
According to Mark Zandi, chief economist at Moody's Analytics, each time a household is formed it adds an estimated $145,000 to output that year that sends ripples through the economy. Without the inability to buy major goods and services that do come with the traditional and cultural milestones of entering adulthood, unemployed or underemployed millennials remain a terrible waste of human capital that have enormous potential to drive the economy forward.
In the long run, the economic setback for this key demographic could have major consequences for the overall economy and potentially prolong its recovery period.
According to Bloomberg senior economist Joseph Brusuelas, the youth unemployment crisis could cost the U.S. almost $18 billion over the next decade — an estimate he calls "conservative."
Despite the many waves of optimism that the economy is headed in the right direction and economists including the current prediction that 2014 could be the best year for growth since 2005, the recovery for this particular demographic is painfully slow. Unless job opportunities for millennials improve and increase, the overall economic recovery could go on for much longer than expected.
By the looks of it now, that home gym in your parents basement will just have to wait.