Almost 40% of Young Americans Live with Parents!

WSJ today (12/22/2016) has an article reporting that nearly 40% of young adults, age 18-34, are living with parents, siblings or other family members.  This is the highest percentage since 1940!  The rise has been occurring despite the “rebounding economy” and “recent job growth.” [No mention of the kinds of jobs or the incomes attached to this “rebounding economy”] And the rise began in 2005 well before the Great Recession of 2008. This runs counter to the trend following previous recessions (yes, recessions are a recurring feature of our economy with its “business cycles” or “periodic crises” depending one one’s perspective). Following a recession an economic recovery  would take the form of a rapid increase (spike) in employment and growth that would be accompanied with a decline in young adults living with their families. That is because economic growth (from about the 1940s through the 1970s) involved a sharing of that growth; instead we have seen the top 1% or fewer making off with most of the increase with little or none going to working class individuals or families — despite the slight rise in incomes reported recently. Today’s incomes are inadequate for supporting a single adult or two adults living together — never mind having children — as a household unit.

Another way of conceptualizing this: Young adults are not forming households (marrying, having children or just moving out on their own).  The cause? Economics.  And I would guess probably Education — as more and more people go to college and then finding limited or unrewarding (financially and otherwise)  job opportunities, return for further education. Findings:  the lower the income of the young adult the lower the likelihood of starting a household (not living with one’s family of origin).  The higher the income, the more likely to have started a household.  Incomes are just not keeping up with the cost of housing — including the cost of renting!  The Wall Street Journal, looking at it from an investor’s perspective, reports “far less demand for housing.”  Who did this research? Real-estate tracker, Trulia. [Where are our PhD students and graduates?]  The outlook for the future: more of the same!  These economic conditions that young people face may keep “their homeownership rates near historic lows for likely the indefinite future,” said Ralph McLauglin, Trulia’s chief economist.

Obama Economy “Unfinished Business”

Obama Economy has Unfinished Business

  1. no productivity increase
  2. huge numbers not in workforce
  3. inequality unprecedented

 

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