The economy may be inching back from the worst downturn in decades, but 20-somethings still face a daunting road to employment and financial independence. They moved back home hoping to wait out the recession, until the job market turned around. But for many, what began as a temporary crash pad has become a permanent residence. Some 37 percent of 18- to 29-year-olds are unemployed or out of the workforce entirely, according to a February Pew Research Center analysis of Bureau of Labor Statistics figures; and the 19.6 percent unemployment rate for people 25 years old and younger in April was the highest since the Labor Department began recording the data in 1948.
But it’s not only the unemployed who are moving back home. A sizeable group of employed “millennials” (people born between 1980 and 2000), also are returning to the nest or accepting subsidies from their parents as a way to focus on developing careers, paying off student debt, and building savings. An AFL-CIO survey released last September found that a third of workers under age 34 live with their parents. A creditcards.com survey found that two in five parents are giving their adult children financial help.
The painful reality is that already modest entry-level salaries are falling. The average annual salary for 2010 college graduates is $47,673, 1.7 percent less than in 2009, when the economy was already in recession, according to National Association of Colleges and Employers data. It’s not that these young people aren’t making money at all, says Jane Adams, a social psychologist and parent-adult child relationship expert in Seatttle. “Just not enough to keep up with today’s housing costs, to save for graduate school or a future home, or to have the same standard of living that they have with their parents.”
In some cases, these return guests may be wearing out their welcome and growing lax about working hard, saving and moving out. A University of New Hampshire study released last March found millennials less hard-working and more money-hungry than baby boomers or the generation born between 1965 and 1980. The website Urban Dictionary recently introduced the term “Slackoisie” (pronounced slack-wah-zee), to refer to “narcissistic young professionals who often complain about work, are critical of long hours, and have an exaggerated sense of self-importance and entitlement.”
But for three very different employed young workers, living under their parents’ roof or accepting financial support motivated them to jumpstart careers, save, and seek autonomy as soon as financially feasible. Here are their stories:
One Tech’s Trek : Reid Fontaine, 27 years old, Glastonbury, Conn.
Reid Fontaine held a handful of media production and technical support jobs after his 2005 graduation from Franklin Pierce University in Rindge, N.H. After two unhappy stints as a local television news producer, including one layoff, Fontaine refocused his sights on information technology. When he was offered a six-month IT position at a Hartford, Conn., insurance company, he took his parents up on their offer to move back home in case the position didn’t pan out. By April 2009, the economy had plummeted, and when it came time for the company to review his contract, he was out of a job. He collected unemployment, worked odd jobs for a contractor friend , and job hunted. He landed his current position a full year later, managing computers and other IT equipment at a local elementary school. He worries it could be short-lived if the school board doesn’t allocate money for his position in its 2010-2011 budget.
“It’s been a bit of a crazy ride,” Fontaine says, but he is grateful for the time spent living at home. “It allowed me to bank a significant amount of money toward savings rather than dipping into it to pay bills. My parents knew that would ultimately help me later in life.”
He says his parents recognize that he’s not spending recklessly, and is steadying his career and building his finances enough to move out when it makes sense. “Sure, I’d rather be in an apartment in Boston making a large salary, but I also understand that I have changed career paths and it’s going to be more slow going,” he says.
His parents still don’t charge him rent, but he earns his keep as the family’s “technical guru,” helping his parents, siblings and grandparents fix their computer glitches and television sets. He also runs errands, does handywork around the house, and chauffeurs his mother when she needs a ride.
Though his relationship with his family is strong and he appreciates the roof over his head, “there are definitely some differing opinions on when the dishwasher should be emptied, what time I need to come home, and that kind of thing,” he says. “I love my family, but living here has definitely pushed me to seek work and stability, since it’s clear that I just need my own space,” he said.
The Political Apprentice: Ryan Carey, 22, Washington, D.C
By accepting an unpaid, full-time internship in the Washington office of Sen. Chuck Schumer, D-N.Y., Ryan Carey decided he’d be in a much better place professionally than if he had returned to his Syracuse, N.Y., home. “The job situation is even worse there than it is down here, so there would really be no career track to settle into,” he says.
His parents, who are both educators, recognized Carey’s ambitions to become a speechwriter or press secretary, and encouraged him to take the internship as a way to plant roots and gain experience. They went a step further, helping to pay for his food and day-to-day expenses and adding money to his debit account when they see it running low. “They’re willing to help me out as I work to get my foot in the door in DC,” he says. “It won’t be forever. They know that.”
When he started his internship in October, Carey, a 2009 graduate of the University of Maryland at College Park, moved in with his 26-year-old sister and her boyfriend, who own a condo in DC. His sister isn’t charging him rent, though she does expect him to help clean, contribute some groceries, and cook meals occasionally. “The good news is, I’m already a neat freak, and I happen get along well with my sister and her boyfriend.” He says he is more likely to relax at home than go out and socialize once his work day ends around 6:30 PM. His parents “are helping me launch a career, they aren’t helping me have a social life,” he says. “I do a lot of things that are free. If I go to a baseball game, I don’t get beers, if my friends go to a bar, it has to be inexpensive.”
Carey is focusing on learning as much as he can on the job before his contract expires this month. He began his internship doing office work, pushing papers, organizing press clips, and answering phones, and has advanced to writing grants, press releases and speeches. He’s clearly enthusiastic about his work, and has grown to enjoy the debate on health care and energy policy along the way.
He has been scouting political communications jobs on Capitol Hill for the last three months. “One of the nice things about our press shop is that I’ve gotten some major experience because it’s so busy,” he said. “Now I just have to remain positive.”
The Prudent Planner: Alyssa Goldstein, 24, New York
Alyssa Goldstein likes to exercise and values her free-floating work schedule as a freelance court reporter. Yet she limits her leisure time, and her social life ends up taking a back seat as she works to pay off $22,000 in student loans and other expenses, and build a nest egg to hopefully move into her own apartment sometime next summer. “If I say I’m not going to work for a day, that’s a day I’m not going to get paid for, and that won’t advance my career or money situation,” she says.
Goldstein lives with her parents in Queens, N.Y., and attended the nearby Queens College of the City University of New York, where she studied media, followed by a stint at a vocational school to study court reporting. She’s a freelance court reporter working four days a week on average, though she’s not compensated for the hours she spends editing the testimony. As a freelancer, she pays out of pocket for health insurance, and invested $10,000 in hardware and software to do her job. She hopes to land a full-time job with a less erratic schedule and benefits.
“Though I can see … getting assigned more involved cases, I’m still lower on the totem pole than most,” she says, adding that it could be five years before she can get a full-time job.
Living at home, she said, has made her close with her parents, but she contributes around the house and wants to take care of her own expenses out of respect for her retired father and nearly retired mother. “They were paying for a lot while I was studying and interning, she says. “I am feeling more independent because I can fund most aspects of my life, but also have a place to live while I save.”
Just as the hours she works in a day will vary, so does her pay, depending on the number of pages she submits. Some depositions last 45 minutes, other jobs last seven or eight hours. “There are definitely some days I make $500 and kind of have to bring myself down and say, ‘Don’t go spending it because you have to save for what you want next.’”
| Cost Analysis: Living on A Starter Salary in New York, Houston, and Portland, Ore. | |
| Salary applied to all: $47,673 (national average for a 2010 college graduate) with respective state and federal income taxes applied, including Social Security and Medicare, but no other withholdings; calculations include rent, food, and transportation costs, but not utilities or other expenses. | |
| Brooklyn, N.Y. Income: $32,935.44 take home per year after taxes, or $2,744.62 per month. Expenses: $1,146 per month per person to share a two bedroom apartment $340.33/month for food (12.4 percent of income) $389.74/month for transportation (14.2 percent of income) Leaves $868.55 each month for other expenses, such as clothing, entertainment, medical bills and savings | |
| Houston, TX Income: $36,838.92 take home per year after taxes (Texas has no state income tax), or $3,069.91 per month. Expenses: $907 per month to live in a 2 bedroom apt $377.60 per month for food (12.3 percent of income) $598.63 per month for transportation (19.5 percent of income) Left with $1,186.68/month for other expenses and savings | |
| Portland, Ore. Income: $33,245.28 take home per year after taxes, or $2,770.44 per month. Expenses: $909 per month/pp for a two- bedroom apartment $332.45 per month for food (12 percent of income) $446.04 per month for transportation (16.1 percent of income) Left with $1,082.95/month for other expenses and savings |
Table Sources: https://secure.gtmassociates.com/calculator.aspx, http://www.apartmentratings.com/, http://www.bls.gov.
Have you had a different experience? Please tell us about it in the comment box below.
Related Links:
http://online.wsj.com/article/SB10001424052748704250104575238692439240552.html
http://www.portfolio.com/views/blogs/daily-brief/2010/05/10/study-confirms-worst-fears-about-generation-y-workers
http://www.nytimes.com/2010/05/25/business/economy/25gradjobs.html
http://online.wsj.com/article/SB10001424052748704250104575238692439240552.html
http://www.bloomberg.com/apps/news?pid=20601109&sid=a8f9A4GYLECE
