The kids are all right. Their slightly older siblings, not so much.
For years you’ve probably been reading about aimless, idle millennials hunkering down in their parents’ basements, filling their days with video games, Instagram and deep, longing gazes upon their shelf of participation trophies. Members of the Boomerang Generation simply haven’t been sufficiently motivated — or well-parented? — to get a damn job, spouse and apartment of their own already. One need only watch “Girls” to understand how much my generation’s entitled, can’t-do attitude has been holding us back.
But census data released a few days ago offer some good news, or so it seems. The share of 18- to 24-year-olds doubling up with their parents fell in 2014, for the second consecutive year. In 2013, 55.3 percent of Americans in this age group lived with their folks; in 2014, 54.9 percent did.
That’s small, noticeable progress, even if the overall share remains high. Young people are finally leaving the nest.
Move up an age bracket, though, and the trends are heading in the wrong direction: Americans age 25 to 34 seem to be regressing.
Despite improvements in the overall economy, these older millennials have become more likely to bunk with Mom and Dad each year over the past three years. In 2014, 14.7 percent were living with their parents, the highest share since the government began keeping track in 1960. Among men, the number was especially high: 17.7 percent, or more than 1 in 6.
Now, maybe these divergent trends mean the younger bloc of millennials is finally heeding the advice of so many wise pundits who’ve admonished youths to grow up and start taking responsibility for themselves, while we older, more pigheaded millennials have instead dug our heels deeper into our parents’ sofa cushions.
More likely, what we’re seeing is evidence of the scarring effects of an unusually severe economic downturn. The younger members of Gen Y are loaded with debt, but they are at least graduating into an economy with expanding job opportunities; meanwhile, the cohort of young people unlucky enough to have entered the job market during a time of scarcer openings sees its economic misfortunes (and resulting inability to afford a homestead or other life milestones) persist.
In other words, the Great Recession may have led to a new Lost Generation — or at least a Lost Half-Generation.
Economists have known for a while that the damage from downturns can endure long after the economy has turned, especially among those whose greatest sin was bad timing.
Yale’s Lisa Kahnfinds that people who graduate from college during a time of high unemployment earn significantly lower wages than workers with better timing. This differential persists not for a year or two but for decades.
Why such long-lasting scars?
When openings are rare, young people take whatever job is available and get stuck on a lower trajectory, at worse-paying firms, with fewer opportunities for upward mobility. Many may end up trapped in the wrong industry altogether, at least when it comes to earning potential; a famous study by Stanford’s Paul Oyer found the lifetime earnings of MBAs were largely determined by the number of job openings in investment banking the year they graduated. “A person who graduates in a bull market and goes to work in investment banking upon graduation earns an additional $1.5 million to $5 million relative to what that same person would have earned if he or she had graduated during a bear market and had started his or her career in some other industry,” Oyer wrote.
Switching jobs is one of the most important ways young workers get raises and derail themselves from a low-paying career track. But research shows that young people who enter the job market during a weak economy seem to have unusual difficulty job-hopping later on. Perhaps they’re risk-averse, or they didn’t obtain the right skills in their entry-level jobs, or employers look askance at their spotty résumés. From a recruiter’s perspective, a 22-year-old fresh out of college might look more attractive than a 28-year-old stuck in his survival job at Starbucks. And these days, Great Recession-era graduates may have even more trouble finding promotions or jumping ship to a better-paying firm, thanks to the long-term, secular decline in job turnover at U.S. businesses.
The interaction of these economic trends — bad luck in the business cycle, and an increasingly sclerotic labor market even when times are good — suggests the Lost Half-Generation may continue losing out for a while yet.