BABY BOOMERS & MILLENNIALS HAVE VERY LITTLE IN COMMON

…Many of these millennial graduates will still be living at home

 

Young adults still living with their parents is a world-wide issue.

 

Were you aware that according to Pew Research, in 2014, in the US, Canada, across Western Europe, and in Japan, nearly one third of millennials and young adults 18 to 34 were still living with their parents.

 

Now there are good reasons for this, as homeownership remains far out of a young person’s reach. National home prices today are still at levels that are not that far below their pre-Great Recession peaks.  In some metro areas such as Silicon Valley, San Francisco, New York City, Boston and Chicago, the housing prices are at all-time highs.  That also includes rental prices, which have skyrocketed, seriously outpacing today’s inflation.

 

Young people are also living with their parents in higher numbers in part because they’re delaying marriage. This is because of two separate issues.  It’s due to today’s questionable job prospects and a growing perception that financial security is a prerequisite to getting married.

 

Let’s also not forget that instead of going to work right out of High School, like many Boomers did, or going directly to college with little or no college loans, that is not the situation for today’s millennials.

 

Due to FDR’s New Deal programs after WWII, the national infrastructure that today’s boomers enjoyed all their lives was largely built by their elders. Those who went to college in the 1960’s paid very low or no tuition and they received much more generous public subsidies for their schooling. For decades the Boomers have paid tax rates far too low to actually fund the government services they received.  (This, and various unnecessary wars that have escalated the nation’s debt.) The results of years of this have racked up trillions in federal debt and that bill has now been handed to their kids.

 

The Boomers today also have to face the fact that for decades the US tax code incentivized home buyers to purchase as much house as possible, whether or not they needed the space.  At least, by doing this, many of the Boomer’s houses now have that extra space for the kids to live until they can finally make it on their own.

 

Unfortunately, if all of today’s rules stay the same, there’s even more trouble ahead.

 

Let’s say that there’s a Boomer couple who both worked every year of their adult lives, with both spouses receiving an average wage until turning 65 before retiring.  According to estimates from the Urban Institute, for every $1 that this couple paid into the Medicare system while working, they will receive $3 back in benefits.

 

Guess who’s going to be paying for and making up that difference in paid benefits?

 

Yep, it will be those spare-bedroom or basement-dwelling, millennial kids.

 

Today’s boomers have benefited for decades from huge national public generational transfers of wealth.

 

The economic and social conditions that today’s young adults face is far more dire than that of their parent’s generation.  Today’s millennials and young adults have high unemployment, and there is severe underemployment.  Many are graduates with no jobs and high student debt burdens. In addition, on a national basis, many of today’s jobs wages have been stagnate for a decade.  In addition, did the chosen career that the young adults studied for and graduated, does it fit within the needs of today’s jobs?  It has been said that over 20% of today’s available, good paying jobs did not even exist a decade ago.

 

Understanding all of this, it probably makes good sense to not expect that the youngsters should be moving out as their first milestone of adulthood.  Being a millennial today is a lot different than when Boomers were thinking about leaving home and making it on our own.

 

Think about it…….

 

Copyright G.Ater  2016