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.
