The Plight of Millennials

I recently ran across a couple of stories that caught my interest. The first was from Fox News, Majority of millennials financially rely on parents, survey finds. This story reported on a survey done showing that 70% of young adults between the ages of 18 and 34 received financial assistance from their parents within the last year. A third of millennials receive assistance each month from their parents for rent or mortgage payments. Two out of five millennials that own homes turn to their parents each month to help pay the mortgage.

A couple of the reasons for this plight given in the article include wages being lower than historically and the weight of college loan debt. The article suggested the average college student had $36,888 worth of student loans resulting in $357 in loan payments monthly.

The second article was published in Forbes from a Quora contributor, Why Are So Many College Graduates Unemployed?. This article discussed the plight of young college grads living under $100k of student debt and unemployment of college graduates being "rampant". This is the only article I have seen referring to college grads having $100k in student loans, the data from other locations doesn't support this number. The article reviewed how students were forced down the path of a college education by society and parents to get a college degree and then get a job.

These two articles actually made me feel bad for millennials. My personal opinion of most millennials had been they were spoiled kids having everything given to them, have grown up into a generation of "victims" with an overrated sense of confidence in what they "know to be true" and a exaggerated sense of entitlement. I don't think of all of them this way, I actually know a few that I would never throw into this description. But these two articles got me wondering just how bad it was for millennials.

I decided to do some digging to see how much worse off millennials have it than how I started as a young adult. I graduated college with a Master's Degree in Engineering in 1985 and a starting salary of just over $32,000, which I remember checking at the time was about $2000 above average of college graduates with Master's Degrees. My student loan debts from memory came to about $175 per month. Employment opportunities for college grads had gone down from when I started college, but they were still jobs out there if you looked for them. When I started college, employers were paying signing bonuses for college grads to come work for them, sometimes as much as a year's salary upfront, but those were gone when I graduated.

Converting from 1985 dollars to 2017 dollars my starting salary of $32,000 comes to $73,369. The 1985 average of salary for a Master's Degree of $30k would be just under $69k in 2017 dollars. My college loan payments of $175 per month in 1985 would be $401 per month in 2017 dollars. Money magazine reports the average starting salary of engineering grads in 2017 to be $63,039. Considering this number includes all engineering graduates and not just those with Master's Degrees and above, the number doesn't seem to be that far off. Now compare my $401 per month in student loan payments to the estimated $357 from the first article and again they numbers are comparable.

With my starting salary and the starting salaries of 2017 graduates being comparable along with the same relative amount of student debt. The plight of millennials must be a result of the "rampant" unemployment of college graduates. Since 1992, the Bureau of Labor and Statistics (BLS) has been documenting the unemployment rates of college graduates. The data looks like this:

The unemployment rate of college graduates, 25 years and older, recently hit 2%. Since 1992 the unemployment rate was better between around 1998 to 2001, but for the most part in this time period it's been at 2% or higher. Hardly "rampant" unemployment, but remember, in the United States you have to be actually looking for a job to be considered "unemployed". A thirty year old living in their parents basement whining about how bad things are instead of looking for a job is not "unemployed".

Granted, this hasn't been an extensive review of all the different fields one can receive a college degree, but I just don't see the "plight" of millennials. Yes, salaries for engineers with a Master's Degree or better my be down slightly, but hardly enough to be called a plight. In today's dollars my college loan payments were comparable to the average today, it certainly wasn't a plight then.

This small amount of research simply reinforced my feeling about the average millennial. It also reminded me of another article I had read a year of so ago, A Boomer Parent's Apology To Millennials that's well worth a few minutes. If you're one of the parents providing money for your millennial child to "survive", consider that since you are taking an active part in their finances you have the right to understand the full picture of their finances. Set down with them and go through the monthly expenses and see where the money is going. Show them where they can cut back on expenses and teach them to make a monthly budget. The choices we make with money can make all the difference in the world.

Toward the end of writing this posts I went back and read the first article again because something was bothering me. I finally found the phrase that bothered me, it is in reference to support millennials are receiving from their parents:

almost three in five millennials saying they couldn’t afford their lifestyles without the support

Could it be that it's not the economics of the world today making it hard on millennials? Could it just come down to "their lifestyles"?