By: Catherine Clements | Student Columnist
It’s no secret that millennials are facing a financial struggle. Millennials are entering adult life stages, such as buying a house or having a family, later simply because they cannot afford it.
Student debt in the U.S. currently holds at $1.3 trillion according to Jared Meyer, fellow at the Manhattan Institute for Policy Research.
To make matters worse, the average income for millennials is falling below the national average by 20 percent, an income average that was exceeded by young adults 30 years ago, wrote The Guardian.
As a young adult it seems like there are just too many factors contributing to this national downturn in income. Merely one of these circumstances would put a millennial at an economic disadvantage, let alone a combination of several unlucky components.
Joblessness, debt, globalization, demographics and rising house prices are affecting young people around the globe, according to The Guardian. This is the first time earnings for young people have dropped so far below the rest of the population.
Based on the median income, adjusted to inflation, young people are making $2,000 less than their parents in 1980, according to The Atlantic.
Living as a millennial, this observation is disturbing. How could a generation that’s more educated than ever be so economically setback? Going to college was supposed help us make money, not lose it.
Further investigation of this issue and possible solutions was done by the Joseph Rowntree Reform Trust as a two-week Guardian project.
The Luxembourg Income Study (LIS): Cross-National Data Center reviewed the economies of Australia, Britain, Canada, France, Germany, Italy, Spain and the U.S. The LIS found that individuals aged 65-79 have more income than the average under-30s.
The fact that grandparents are bringing in more money living on a fixed income and social security than those actively working is incomprehensible.
What effects will this lack of wealth for young people have on their futures or even future generations?
The consequences of this financial downturn can be seen by examining trends of current millennials. Life stages for young people are delayed, and it is not just a result of changing values. But rather Generation Y simply cannot afford to keep up with the buying trends of the past.
Millennials are more likely to take out loans for school, stay in their early employer careers longer, get married later and are less likely to become homeowners than young adults in the previous generation according to studies done in Oct. 2014 by the U.S. Council of Economic Advisors.
These finding are of no surprise. If anything it only confirms that millennials are lagging in the basic stages of adulthood compared to older generations. While drowning in student loans, young people cannot even consider purchasing big ticket items like a car or house. The fact of the matter is millennials simply are not making what their parents did at their age.
“Current working-age, middle-class groups are increasingly concerned with their and their children’s job prospects. An increasing number of people think children in their country will be worse off financially than their parents,” Gurría said.
Overqualified and underpaid graduates are taking any job they can get. The idea that one has to start somewhere may need to be reconsidered.
“Maximizing your first salary is really important because it determines your salary for the rest of your life,”said Matt Wallaert, chief scientist at GetRaised.com
For example, if one takes a job with a salary of $35,000 for a $50,000 profession he or she is educated to do, even their next promotion will likely not bridge the difference. A young person’s first salary sets the standard.
At this point, the priority of many millennials is to be able to support themselves, and any notion of family or having children is far off in the future.
The number of college graduates planning on having children has dropped 36 percent in the last 20 years, according to Steward Friedman, a professor at the University of Pennsylvania. Fewer than half, 42 percent, plan to raise kids at all.
The issue Friedman discovered was not that millennials did not want kids, but that they did not feel like they could manage it.
It is a shame that millennials feel they have to choose between financial stability and a family.