The effects of the recession have trickled down the economic food chain over the last five years.
Now, a new study from PNC Bank reports it’s hitting people who were in high school and college when they first started hearing terms like “bailout” and “golden parachute.”
The second PNC Financial Independence Survey released July 25 reports millenials, those ages 20-29, are far less financially independent than the group was just two years ago, when the first national survey was conducted.
Only 17 percent of the people in that age group with some college education say they are financially independent, compared with 23 percent in 2011. About 58 percent of those surveyed said they are behind where they expected to be in financial success, a rise of 26 percent since 2011.
It’s not like we need such a survey to tell us recent college grads are getting hammered by the economy. People hold on to jobs longer than ever, needing the Jaws of Life to pull them into retirement. People out of work, maybe for years, are taking jobs they are overqualified for simply to get back into the workforce and support their families.
Kurt Rankin, an economist with PNC who covers Central Pennsylvania, said if the economy continues to produce jobs at the rate it has for the last four months – nearly 200,000 jobs per month over that time, with 162,000 in July – we still won’t be back to pre-recession job levels of December 2007 for another year.
And that’s not even taking into account the jobs that would have been created since then but never materialized. If the economy had produced an additional 50,000 jobs a month since December 2007 – a somewhat conservative estimate – that’s 3.35 million jobs that would have been around, but aren’t.
It’s all a perfect storm of economic tidal waves crashing down on the millenials, and it’s going to take longer for this group to reach financial independence.
“That’s a lot of jobs that are not back out there,” Rankin said. “There’s a lot of people competing for those jobs that are out there, and it’s across all age spectrums.”
“Financially independent” covers three main themes, according to the study: Paying the bills, getting a job in their preferred profession and moving out of their parents’ homes.
Forty percent of respondents say they still live with their parents, and 28 percent of those 25-29 said they’re still at home.
With that percentage on the rise, it’s bound to have an effect on the home-buying market as well as the rental market – a market that already has seen its share of hits.
“Home buying has been depressed by this, yes,” Rankin said. “And since it’s likely they are not paying rent, the rental market is lacking demand as well.”
No one is saying this is wrong, or pointing fingers at those darn whippersnappers for not being able to get out of their parents’ basements and find a job. Hey, I did it for a while. Twice! It allowed me to get grounded and save up some money so that my life was only minimally in danger in the best apartment I could afford rather than constantly in danger.
What the survey is clearly saying is this generation will need to overcome external factors out of their control if they’re going to control their financial futures.