The future is not looking good for Generation Y. They are beginning their adult lives in the most financially strapped time to be a young adult. Student loans, outsourced jobs, and a slow economy are making it more difficult to be financially secure coming out of university or college.
Despite being the most educated generation to date, millennials are having hard times finding jobs. The combination of outsourced manufacturing and saturated job markets make even getting a job a worry for many. And once they do find a full-time job that’s actually in their field, their pay will likely be low, and their debt will likely be high.
According to the Census Bureau, the average salary of someone between the ages of 18-35 is the lowest it has been since before 1980. When adjusted for inflation the median income in 1980 was $35,845. By 1990 it increased to $36,716, up $871. By 2000 it increased steadily again to $37,355, a gain of $639. Between the years of 2009 and 2013, the average salary of an adult went down to $33,883, down by $3,472 from 2000. With slim chances of a positive change, the time millennials need to be saving they have to be paying off debts.
Speaking of debts, they are rising. Specifically student loans from an irrational increase in tuition rates. When adjusted for inflation, the cost of tuition has increased by 234% from 1993 to 2015. To compare, the inflation overall inflation rate went up by only 63%. The percentage of Bachelor’s degree graduates with student debt is at a high of 71%, 25% more than it was at in 1993. The average debt among graduating Americans is $26,500. If you were to pay off $250 a month, it would take a little over eight and a half years to pay get out of that debt. With all other living costs, this reduces the chances of any significant savings.
The amount of adults between 18-35 buying a home are also at a low since they began collecting the data in 1994. The reasoning behind this stat may also be affected by the home buying become less popular when you can rent somewhere and be downtown instead. Many millennials are pushing back the time they want to get married and start a family in a new home.
Tough times will be ahead for young adults of this and future generations.