Young, Unemployed, Underemployed, and in Debt: Millenials Face Lackluster Job Market
Eric Andersen could be the poster boy for the problems facing so many millennials today.
Andersen, 25, graduated from the University of Iowa in 2010 with bachelor’s degrees in journalism and marketing. He had about $15,000 in student debt and no luck finding a job in his field immediately after graduation.
So he moved back to Des Moines to live with his parents while he continued his job search. To fill his time, Andersen worked part-time at Best Buy and then as a temp at Wells Fargo Home Mortgage, where he received no benefits and no paid time off but was expected to work at least 45 hours a week.
After about a year and a half, he was laid off from Wells Fargo and began receiving unemployment benefits. Andersen said after this setback, he decided to no longer settle for jobs outside of writing when it came to his career.
“I applied for jobs like it was my job,” Andersen said, adding he had about 10 different interviews before he landed a position at Stamats Communications, where he writes and edits for Meetings Focus magazine.
Andersen has been at Stamats for about six months now, and while he is very content with his job, he said he does believe that the prolonged search has had some negative effects.
“I feel like (the job search) has slowed things down some, like maybe I’d be paid more now or would have moved to a different position,” he said. “I feel like where I am now is where I would have liked to have been when I graduated.”
A Grim Picture
Millennials such as Andersen—generally those born between 1981 and 2000—face a lackluster job market filled with part-time jobs, high unemployment, and growing student debt.
The July unemployment rate, when adjusted for labor force participation by including those who have given up looking for work, for 18- to 29-year-olds is 16.1 percent, according to Generation Opportunity, a national organization of young people advocating for more economic opportunities.
This includes about 1.8 million young adults who were not factored into the unemployed rate by the U.S. Department of Labor because they are no longer in the labor force due to lack of jobs, the organization said. And the figure is significantly higher than the national average, which fell to 7.4 percent in July.
Rather than starting careers after college, many young people are forced to cobble together several part-time jobs, said Cori Whalen, a spokeswoman for Generation Opportunity. Whalen cited a recent survey that shows only 30 percent of young people consider their job to be a career, and only a little more than half—51 percent—are working in a field related to what they studied in school.
But high unemployment isn’t the only factor painting a grim outlook for millennials. Exploding student debt—especially in Iowa, where the rate is higher than the national average—is also hindering young professionals.
In 2011, the average student debt in Iowa was $28,753, nearly $2,000 more than the national average. This was up significantly from 2006, when Iowa’s average student debt was $22,926, according to the Project on Student Debt, an initiative of the Institute for College Access & Success.
Whalen said that while making student loans accessible to students is certainly a good idea, it can hurt young people in the long run if they become saddled with debt and are unable to find a well-paying job once they leave school.
“We are the most educated generation but have the least amount of opportunities,” she said. Young people “are stuck with this debt but have no career and no way to pay it back.”
But what does all this mean?
According to the Pew Research Center, more young people than ever before, 36 percent, have moved back home with mom and dad after graduation. The economy has more than one in five Americans ages 18 through 34 deciding to postpone having a baby, and the same number said they were holding off marriage until the economy recovered.
“Not having a steady career ties into every aspect of life,” Whalen said.
This also translates to fewer young adults buying their first homes. The share of younger households owning their primary residence fell sharply from 40 percent in 2007 to 34 percent in 2011, according to Pew.
Fewer millennials are car owners, as well. An August report put out by AutoTrader.com found that 50 percent of young millennials (ages 16-24) and 16 percent of older millennials (ages 25-32) surveyed don’t currently own a vehicle because they cannot afford one.
But John Solow, an economics professor at the University of Iowa, said the millennials’ situation may not be as dire as it seems. Solow said that while the unemployment rate is higher than most would like, it is nowhere near the levels seen during the Great Depression, and it is improving, especially in Iowa, where it sits at 4.8 percent.
“This notion that the job market is so terrible is a little excessive,” Solow said. “Unemployment among college graduates is not that high, even if it is a little higher than we’d like.”
And it does take a little bit longer to find that first job, he said.
Millennials’ student debt also isn’t as crushing at it appears at first glance, Solow added, if it is thought about as an investment to be paid back over the long term.
The higher earnings a college graduate can bring in contrasted with that of a high school graduate, over a lifetime, is certainly enough to pursue a college education, he said.
“I don’t think many adults would think twice about borrowing $30,000 or even $100,000 to buy a house because they’re looking at having 30 years to pay it off,” Solow said.