Saturday, June 23, 2012

Youth Scarred by Obama Economy

The USA Today  has a piece on how young people are harmed by starting their careers in difficult economic times.   Half of recent college graduates are not working and of those that are, only about 40% are in positions that fully utilize their skills.

Back to the 1930s
Social scientists say these young adults are a lot like the Americans who came of age in the early 1930s, both in the economic upheaval they confront and in the attitudes toward success, contentment and risk aversion that they are forming.
"The economic situation (of young adults) is completely parallel and analogous to the (Depression-era) GI generation — raised in relative affluence, and then just as they are to start in that affluent world, it all comes crashing down," says Morley Winograd, who has co-authored several books on Millennials, the generation born from 1982 to 2003. "And so they have to find new ways to persevere. They just have assumed that everything that came before them was a mirage — that it was false, built on unsafe foundations."

Excess student loan debt is making their suation far worse.  But, I would note, the amount of debt burdening young people from student loans is a drop in the bucket compared to the problems that young Americans will experince from general government indebtedness(15 times higher at least)

A Harvard University Institute of Politics survey in March and April found that more than three out of four college students expect to have a somewhat or very difficult time finding a job. And 45% expect student loans to affect their financial circumstances "a lot" after they graduate.
Their pessimism is based on the experience of the 20-somethings just ahead of them. A Rutgers University study this spring of 444 graduates who received bachelor's degrees from 2006 to 2011 found that 51% were working full time. The rest were in graduate school, unemployed, working part time or no longer in the job market.
One in four were living with parents. Those who got jobs beginning in 2008, the height of the Great Recession, earned a starting salary, on average, 10% less than those graduates who entered the job market in 2006 and 2007, according to the Rutgers survey. All this has happened as the total amount of student loan debt in the USA surpassed $900 billion.

Saturday, June 16, 2012

Obama's Amnesty Means More Competition for Jobs, College for You

The Washington Post  states the obvious, Obama's amnesty program means more competition for jobs and  university slots for young Americans.  With half of young Americans out of work or underemployed, do you really need more headwinds in starting your career.

And needless to say these individuals obviously will have a leg up on young whites because of affirmative action.  Hope and change!

But opponents of illegal immigration warned that the policy could create significant new competition for jobs and university slots at a time of nationwide recession and numerous states’ efforts to curb public spending.
“I see a tidal wave coming,” said Brad Botwin, president of Help Save Maryland, a group that opposes legalization for undocumented immigrants. “Half of our college graduates today can’t find jobs, and the unemployment rate for high-school-aged Americans is extremely high. This is unfair to U.S. citizens and legal immigrants who are out there struggling to get ahead.”



Tuesday, June 12, 2012

Generation Rent

 NPR documents the collapse in home ownership rates among young people in America.  As noted in my post below, young people seeing parents, friends and siblings struggle with homes that are underwater are naturally loathe to buy a home and take on the mortgage debt.  This shows the longer run costs to society of bubbles.  Namely, the bursting of a bubble changes individual perception of the risk of a particular investment.

The Taylors aren't alone. The economic hammer has fallen especially hard on 20somethings — part of the so-called Millennial Generation or Gen Y born roughly between 1975 and 1995. Plagued by high unemployment, many have had to delay careers, marriage and having children. And the idea of owning a home is more often being put off or written off entirely.

In a nation where homeownership is part of the American dream, a generation of renters could alter communities where they live and redefine the idea of middle-class success.

'A Recipe For Frustration'

"They've seen what their parents are dealing with, what their brothers and sisters are dealing with, in terms of being saddled with home values that are less than what was paid for," says Paul Conway, a former chief of staff for the U.S. Department of Labor who is now president of Generation Opportunity, a think tank specializing in the economics of Generation Y.

Sociologist Katherine Newman, who chronicles some of the struggles in her book The Accordion Family: Boomerang Kids, Anxious Parents, and the Private Toll of Global Competition, agrees with Conway that we may be witnessing the creation of a generation of renters.

"I'm hoping that the Millennial Generation doesn't set its sights on homeownership as a benchmark of economic stability, because it's going to be out of reach for so many of them that it will just be a recipe for frustration," she says.

Sunday, June 10, 2012

Young Wisconsinites Swing Towards Walker


Perhaps no institution is as harmful to the employment interests of young people as unions.  Unions insist on seniority rules that make it more difficult for young people to find work, change employers, learn new things on the job and gain promotions.  Seniority rules also make the jobs of young people less secure--young people with less seniority are the first to be laid off. 

Young people in Wisconsin are getting the message.  Public sector unions were the main issue in the 2012 Wisconsin gubernatorial recall election.  In that election, young people moved decisively towards Republican Scott Walker and away from Democrat Tom Barrett.  US News reports: 

According to Crossroads Generation, a group dedicated to reaching young people with the messages promoting individual liberty, limited government, and free enterprise, in the recall election Walker carried the vote of those under the age of 25.

"According to exit polling," the group said, "for voters aged 18-29, the Democrats' advantage among this group was cut in half compared to 2010. While Milwaukee Mayor Tom Barrett held a ten-point advantage among 18-29 year olds in the 2010 election, that gap was reduced to five points in Tuesday's election."

Home Ownership Among Young People Plummets

The Boston Globe reports that home ownership rates in Massachusetts among 25 to 34 year olds fell by 20 percent between 2005 and 2010.  High unemployment and high debt are the reason that young people can't make the transition from renting to ownership and in many cases, from moving out of their parent's' home.  The Globe writes:

The number of 25-to-34-year-olds owning homes in Massachusetts plunged 20 percent between 2005 and 2010, even as the overall number of homeowners in the state increased slightly, according to the US census. The rate of homeownership, which measures the percentage of housing units occupied by owners, fell more for 25-to-34-year-olds than any other age group, declining to 34 percent from 40 percent in 2005.

And as for the factors:

High unemployment, crushing student debt, and tight credit conditions are keeping many young adults and families from becoming homeowners, analysts and real estate professionals said. At the same time, the turmoil that has followed since prices peaked in 2005 and the housing market collapsed is changing this younger generation’s view of housing, long thought of as a safe, sure investment and prerequisite to the American dream.
Government created the housing bubble.  Many of these young people who saw their older friends and siblings buy homes only to find their residence deeply underwater.  It's no wonder that young people today are hesitant to make such an investment.

Saturday, June 2, 2012

From BA to AA

The Milwaukee Journal reports that college graduates are increasingly going back to technical school to learn practical skills. 

Ericka Seastrand graduated from the University of Wisconsin-Madison in 2008 with a bachelor's degree in consumer science. She beat the pavement for nine months, and the only job she could get was retail sales associate at a mall.

"The market was really competitive," the 26-year-old from West Milwaukee recalled last week. "My degree was a generic business degree - nothing technical or tangible in the skill set. So I decided to get another degree with a hard skill set."

Seastrand is one of a surprising number of 20-somethings who graduated from college in recent years, couldn't find good-paying jobs with their four-year degrees, and enrolled in a technical college to earn a second degree or diploma geared toward specific job opportunities.

In the last three years, 6.4% of the total number of degrees and diplomas awarded at Waukesha County Technical College went to 20-somethings who self-reported they had at least 16 years of education before enrolling at the technical college, according to data analysis requested by the Journal Sentinel. Twenty-somethings represented 79.5% of all WCTC's grads from 2009 to 2011 who already had bachelor's degrees.

Generation Broke

Boston Globe 
Notwithstanding their collective $200 billion in spending power, and an awesome ability to drive cultural and fashion trends, millennials are not feeling flush these days. Those not drowning financially are often treading water at best, according to surveys like the one released last month by WSL/Strategic Retail, a consulting firm that tracks shopping and retail trends.

Millennials now represent “the highest percentage of Americans lacking enough money to meet their basic needs,” outdistancing Gen X-ers and baby boomers in that dubious regard, according to the survey.
Burdened by $1 trillion in college debt, millennials seek the lowest price on most of their purchased items (80 percent say), shop for lower-priced brands whenever possible (60 percent), and do much of their bargain hunting online (57 percent), the WSL survey found.

Call them Generation Groupon. And with thousands more collecting their college diplomas this spring, ever more of them are sailing into young adulthood, ready or not.