For Many Millennials, Reality Kinda Sucks

Like many in her generation, 23-year-old Casey Griffin is back living with a parent after graduating from college, trying to figure out her next step.

In many respects, she's not that dissimilar to previous generations. A year out of college, Griffin is waitressing and doing other temp work in New York City while she looks for a professional foothold. But Casey and her cohort, the millennials, are dealing with an unusual confluence of trends that has darkened their outlooks, as well as their prospects for independence.

"I think our standards are lower for living -- it's accepted [to live at home]," she said.

Griffin said she'd like to save money and move into a shared apartment with friends, but the idea of living in her own apartment doesn't seem feasible in New York, one of the country's most expensive real estate markets. "I think about that sometimes as a dream."

The millennial generation -- the estimated 75.3 million Americans born between 1981 and 1997 -- is now the country's largest demographic group, but its members aren't feeling particularly bright about the future. Almost half of millennials polled by Bloomberg News said they expect to have a lower standard of living than their parents did. It's not hard to see why they're so pessimistic: two out of five are earning less than $30,000, while almost one-quarter said they are struggling with, or overwhelmed by, debt.

The millennials are also one of the most indebted groups when it comes to student loans, with each subsequent class graduating with ever higher levels of college-related debt. Earning $30,000 and trying to pay back an average of $35,000 in student loans is undoubtedly daunting.

That may explain why young American adults are still living with their parents years after the recession ended. On top of the high student-debt loads, millennials are stymied by the pricey rents in the types of big cities where they want to start their careers, such as in Griffin's case. The median rent in Manhattan is now $3,400 per month, or a 7.1 percent increase from a year earlier, according to Douglass Elliman Real Estate. On a job paying $30,000 per year, that type of rent is not affordable.

Young Americans with high student debt are less upwardly mobile than those who graduated a decade earlier, at least when it comes to home buying, the Federal Reserve Bank of Cleveland said in an October research report. "Student-loan borrowers are now less likely to purchase a home than non-borrowers," research economist Stephan Whitaker wrote. The reasons could be due to the debt itself, or the relatively weak recovery.

But there are deeper issues with the labor market, as well, according to Goldman Sachs, which in an August report noted that almost one-third of Americans between the ages of 18 to 34 are still living with their parents. That's sharply higher than in the depths of the Great Recession, when slightly more than one-quarter were still parked in their folks' basements.

The "puzzling" trend may not really be all that perplexing when one considers some nagging issues with the labor market, wrote Goldman economists David Mericle and Karen Reichgott. Even though the unemployment rate has dropped gradually during the post-recession years, the rate for 18-to-34-year-olds "remains elevated," they noted. Many millennials are also underemployed, working part-time jobs because they can't find full-time employment.

The trend of underemployment has been noted by the Case Foundation's Millennial Impact Project, an ongoing research study of the generation, said lead researcher Derrick Feldmann.

The underemployed might be relying on part-time jobs "as a stepping stone to the next position," Feldmann said. "Underemployment starts to work itself out after a year or two."

Even for millennials with full-time jobs, moving out might not be that easy, since renting an apartment requires saving enough for a deposit. Millennials "might fall short of landlords' expectations for a potential tenant's credit score, savings, or income history," they added.

Yet hope still exists among many millennials, of course. Slightly more than half of those surveyed by Bloomberg said they're very confident if they work hard, they'll be able to achieve a comfortable life. (One out of 10 said they were extremely or mostly doubtful about the idea.)

As for Griffin, who spent last year working with aspiring college students in economically struggling Greece, she said she moved back home with a fresh perspective on her generation's struggles.

"As bad as many of us think it is here, it's worse for kids my age over there," she said.

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