Dear Dr. Frain:
My 24-year-old daughter has found a job in her field that she enjoys but she is not making enough money to pay all of her bills. She has considerable debt because she borrowed $25,000 to complete her B.A. degree. My daughter shares an apartment with a friend in an inexpensive part of town, uses public transportation and has taken on babysitting to make ends meet and hopefully to save for graduate school. I have read in various magazines that this generation of young people has an “entitlement syndrome” and that they are refusing to grow up, but I believe that our 20 and 30 year olds have it harder than we did when we were striking out on our own. Do you have any suggestions or thoughts on this issue?
Confused in CA.
Dear Confused,
I have been reading some of the same articles and I understand your confusion. Congratulations to your daughter for finding a job in her field and for trying to live within her means. She is not alone in her struggle. Many young adults are having a tough time. You are right; it is harder today than it was for baby boomers. The economy and the economic policies of our time have made if much more difficult for this generation. (A good book on the subject is: Strapped: Why America’s 20-and 30-somethings Can’t Get Ahead by Tamara Draut).
According to Monstertrak.com, a job placement firm, jobs are hard to get and harder to keep. Many entry level and manufacturing jobs have been sent overseas and the jobs that are left are part time, and don’t provide health insurance or other benefits that we came to expect. Company loyalty to their employees has become almost nonexistent. The 45 million young people in our nation’s work force face a choppy job market in which entry-level wages often trail inflation, making it hard to cope with high housing costs and rising debt load. Adults in their 30s earn less than their parents did at the same age, reversing the assumption that each generation will be better off than its predecessor. The Census Bureau showed that the median income for families with at least one parent age 25-34 fell $3,009 from 2000-2005 and continues to drop. The amount college students have borrowed for college has jumped by more than 50% in recent years because of soaring tuition and the fact that it usually takes 5 years on average for a student to finish college. The average credit card debt for young people is approximately $9,000. This debt is for groceries, gas, car repairs and medical expenses. (In 1970, only 51% of Americans had a credit card, today 93% have
In a weak labor market younger workers fare the worst and experience all the declines in the economy. They get stuck in entry-level positions for a longer period of time because there are fewer middle management positions available. The unemployment rate for workers ages 20-24 is 8.2 percent even though it is 4.2 % overall. Many young adults are starting to believe that the American dream is off limits to them.
I mention all these statistics to clarify the financial issues facing our grown children at this time. It is extremely difficult to become an independent adult when you are weighted down by debt and are entering a job market where wages and benefits are lower than in the past.
The good news is that a college education is still worth it. The more education a person has, the more they will earn in their lifetime. My advice to parents, if they, can afford it, is to lend their struggling 20-30 year olds a hand without causing financial stress for themselves. A growing number of families are keeping their grown children on their health insurance. Some states such as New Jersey, have enacted higher age limits so that children can piggyback onto their parents’ policies until they are 30. Other states, such as California, have rejected higher age limits. California parents and adult children can shop for affordable policies online. Many parents are pitching in with family plans for cell phone service. Others are offering to pay car insurance as a family or are subsidizing rent expenses for a set period of time. Most families are available as a safety net if some unforeseen expense or emergency should arise. It is important to keep lines of communication open between generations to discuss the complexity of family life today.
Best to you and your family!
Betty Frain, MFT Ph.D.
