The Five-Year Party (25 page)
Read The Five-Year Party Online
Authors: Craig Brandon
“Temporary and contingent employment is the second fastest-growing industry in the country,” she said. “Manpower, the nation’s largest temp agency, has more Americans on its books than Wal-Mart.”
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Kamenetz’s young informants are, as a whole, pretty miserable. Not only are they poor and in debt, but they feel that the promises that had been made to them about their futures have turned into major disappointments.
“A major source of career dissatisfaction for college grads is not the low salaries or the long hours, but the contrast between our bright, shiny expectations and reality,” she said .
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This is finally the day of reckoning for the products of the self-esteem movement, the day when “You can be anything you want to be” is finally discarded and replaced with “How the hell can I make enough money to support myself?”
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This is finally the day of reckoning for the products of the self-esteem movement, the day when “You can be anything you want to be” is finally discarded and replaced with “How the hell can I make enough money to support myself?”
Following your bliss, she said, can lead to economic disaster, unemployment, and a lifetime of debt. Instead of the high life, she said, many of her generation are leading what she called “the G lifestyle”—trying to live on $1,000 a month.
Instead of catching hold of the bottom rung of the corporate ladder and climbing their way up, as previous generations did, most recent grads take jobs for which they are usually overqualified and underpaid. They have no health insurance and no job security. Many of these jobs are temporary, separated by significant periods of unemployment.
“Today’s job market is characterized by instability,” wrote Draut. “Job security today isn’t defined as knowing that you’ll be at the company a year from now. It’s knowing that you will be there
a month from now
. Young workers no longer start work at a company with the intention of staying until retirement. In fact, it’s a stroke of good fortune if they’ll still be on the company phone list two years later.”
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a month from now
. Young workers no longer start work at a company with the intention of staying until retirement. In fact, it’s a stroke of good fortune if they’ll still be on the company phone list two years later.”
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Today 29 percent of young adults or 18.2 million nineteen-to-thirty-four-year-olds don’t have health insurance, the age group with the lowest percentage of insured .
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“In addition to often working in a benefit-free zone, moving up the wage or career ladder in the new economy is more difficult than it was a generation ago,” she said. “The well-paying middle-management jobs that characterized the workforce up to the late 1970s have been eviscerated.” Instead of permanent jobs, she said, millennials must accept temporary jobs where they are hired for a particular project and then let go.
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“In addition to often working in a benefit-free zone, moving up the wage or career ladder in the new economy is more difficult than it was a generation ago,” she said. “The well-paying middle-management jobs that characterized the workforce up to the late 1970s have been eviscerated.” Instead of permanent jobs, she said, millennials must accept temporary jobs where they are hired for a particular project and then let go.
“Paychecks may be sporadic and unemployment is always one project away,” said Draut. “Instead of becoming more financially secure with each passing year, many young adults in their late twenties and early thirties find themselves struggling even more as they start having children and taking on mortgages. What they’re experiencing is paycheck paralysis.”
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The old idea that college graduates could afford to move into their own apartments after graduation has also changed in the era of party schools and huge student loan payments. Nearly half of college graduates move back in with their parents. Sociologists refer to this trend as “boomeranging” as the students who left home to go to college return because they are unable to find a job that makes enough money to support them, pressures that were unknown to previous generations.
According to the census of 2000, nearly four million people between the ages of twenty-five and thirty-four lived with their parents. Recent surveys have indicated that 60 percent of college students plan to live at home after graduation and 21 percent said they planned to remain there for more than a year.
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Wages for entry-level jobs haven’t kept pace with inflation, but the real reason for this phenomenon is the crippling levels of debt that students have acquired by graduation. “It’s become the norm for recent grads to move back home,” said Alexandra Robbins, author of
Conquering Your Quarterlife Crisis
.
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Conquering Your Quarterlife Crisis
.
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According to the Bureau of the Census, 46.7 percent of women and 53.7 percent of men aged eighteen to twenty-four still live at home. For ages twenty-five to thirty-four, 14.3 percent of men lived with their parents, compared to 10.9 percent in 1960. According to the
Student Monitor
, 73 percent of today’s graduating seniors will leave college with $23,000 in student loans and $2,169 in credit card debt.
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Student Monitor
, 73 percent of today’s graduating seniors will leave college with $23,000 in student loans and $2,169 in credit card debt.
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“Even before this latest downturn, this generation was not earning the same wages that their parents earned, taking inflation into consideration,” said Robbins.
Recent graduates also suffer from a form of “cost shock” when they have to pay for the luxuries they took for granted. Students brought up with every kind of electronic toy from iPods to cell phones and expensive brand-name clothing were also coddled in college with private bathrooms, housecleaning services, twenty-four-hour food courts and state-of-the-art fitness centers. After graduation, for the first time, they realize the high prices they have to pay to maintain those luxuries.
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And although a previous generation of parents may have made threats like “As long as you live under my roof, you’ll follow my rules,” today’s parents are much more willing to accept their children back, even into their thirties.
Most grown-ups do not look forward to continuing to live with their parents. “One of the prime reasons these ‘boomerang kids’ come back home is that housing costs have risen faster than inflation and faster than entry-level wages,” said Draut.
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Although the best places to look for jobs are big cities like New York, Washington, and San Francisco, those are also the places where apartments come with the highest rent.
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Although the best places to look for jobs are big cities like New York, Washington, and San Francisco, those are also the places where apartments come with the highest rent.
“The conveyor belt that transported adolescents into adulthood has broken down,” said Frank Furstenberg, the head of a MacArthur Foundation project studying the phenomenon. In the 1960s, kids were warned not to trust anyone over thirty. Today, they can’t live without them.
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A
Newsweek
report on the problem said parents of boomerang children are uncertain about how long they should allow them to stay. “They’re not sure when a safety net becomes a suffocating blanket. Psychiatrists say it’s tough to convince a parent that self-sufficiency is the one thing they can’t give their children.”
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Newsweek
report on the problem said parents of boomerang children are uncertain about how long they should allow them to stay. “They’re not sure when a safety net becomes a suffocating blanket. Psychiatrists say it’s tough to convince a parent that self-sufficiency is the one thing they can’t give their children.”
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A generation ago, no one had any doubt that spending four years in college was an economic benefit. The Bureau of the Census calculated the “college premium” as being worth a cool $1 million over the course of a graduate’s lifetime. Today, however, with the college curriculum dumbed down to grade school levels and tuition costs shooting up at three times the inflation rate, many economists and sociologists have advanced the heresy that, for many students, going to college may be an economic disaster.
Twenty years ago, Larry L. Leslie and Paul T. Brinkman, authors of
The Economic Value of Higher Education
, found that the college premium was alive and well. They concluded that for most people, private investment in higher education is a good decision; in many, probably most, cases it is an outstanding decision.
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The Economic Value of Higher Education
, found that the college premium was alive and well. They concluded that for most people, private investment in higher education is a good decision; in many, probably most, cases it is an outstanding decision.
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More recent calculations, however, have found that the so-called college premium has faded or even disappeared. Jason Kovac of WorldatWork, a Scottsdale, Arizona, professional association, said the earning differential between a high school graduate and a college graduate has been compressed since 1975. In some cases, he said, “experience could mean as much as a college education, or potentially more.” James Brennan, senior associate at the Economic Research Institute, said it was undeniable that the value of a college degree had depreciated in recent years. A degree, he said, merely signifies that the student has passed academic tests “with little relevance to the working world” and that employers understood that trade school graduates were much more focused on the specific skills that employers were looking for. “Today’s bachelor’s degree is yesterday’s high school diploma,” he said. “In an average family anyone can get one.”
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Kim Clark, an education columnist for
U.S. News & World Report
, identified the problem more clearly. Although a degree from a prestigious college or university is likely to open the doors to employment, she said, graduates of party schools and subprime colleges are not getting what they are paying for.
U.S. News & World Report
, identified the problem more clearly. Although a degree from a prestigious college or university is likely to open the doors to employment, she said, graduates of party schools and subprime colleges are not getting what they are paying for.
“A wide variety of studies show that, on average, college pays off in financial and nonfinancial ways. But some college graduates, especially those who attend low quality institutions or take worthless courses, will be below that average and might very well be wasting their time and money,” she wrote.
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The million-dollar benefit of a college education, she said, has shrunk to about $300,000 once the inflated costs of tuition and student loan interest are factored in. This calculation drew a number of comments from readers who suggested that a successful person will be successful with or without a degree. Bill Gates and many other wealthy dropouts have shown that it’s the person and not the degree that determines success. And because smarter people tend to go to college, she said, it may be that the higher salaries earned by college graduates are due to this artificial selection and not because of any value added by their educations. Other readers told her that they thought their degrees were a waste of time and money because they did not earn anything near the $50,000 salary that the average bachelor’s degree holder earns.
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The student’s major is a big factor in later success, she said. Those who majored in math, science, and career-related courses found better jobs than those who majored in English or history.
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The student’s major is a big factor in later success, she said. Those who majored in math, science, and career-related courses found better jobs than those who majored in English or history.
The U.S. Department of Labor has calculated that college graduates earn an average of $51,000 per year compared to high school graduates who earn just $31,000, but when you figure in the exorbitant tuition bills and the interest on student loan debts, the gap between the two is closing fast. What good is it to earn a $50,000 salary if you have to pay $800 a month in student loan payments? Also, it’s important to remember that by the time students spend six years at a four-year college, their high school graduate classmates have already been in the work force making money and gaining experience for six years.
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Students are unlikely to make up the cost of tuition and loans, despite the higher salaries they earn, said
SmartMoney
columnist Jack Hough in 2009. The employer who requires a college degree is putting faith in a system whose standards are slipping. He knows he is preaching heresy here, but circumstances have changed since the days when the idea that everyone needed to go to college was first put forward. The years spent paying off a college graduate’s loans, he said, puts him farther behind, despite higher pay, than a similar student who chose to go to work after high school graduation. It takes the college graduate years to catch up to the pay earned by the high school graduate.
SmartMoney
columnist Jack Hough in 2009. The employer who requires a college degree is putting faith in a system whose standards are slipping. He knows he is preaching heresy here, but circumstances have changed since the days when the idea that everyone needed to go to college was first put forward. The years spent paying off a college graduate’s loans, he said, puts him farther behind, despite higher pay, than a similar student who chose to go to work after high school graduation. It takes the college graduate years to catch up to the pay earned by the high school graduate.
“College degrees bring higher income,” said Hough, “but at today’s cost they can’t make up the savings they consume and the debt they add early in the life of a typical student.” While the high school graduate was busy earning, the college graduate was getting stuck with a huge bill.
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According to the Bureau of Labor Statistics, the advantage in wages that workers with college degrees hold over workers with high school diplomas hasn’t risen significantly since the late 1990s. In 2004, the bureau reported that for the first time the number of college graduates who were unemployed was higher than the number of high school graduates who were unemployed.
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The American Association of Economics found that the return on a college investment leveled off around 2005 with college graduates earning 45 percent more than high school graduates, but this estimate does not count the cost of paying off crippling college loans that high school graduates escape. Since 2005, the college premium shows signs of declining.
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The American Association of Economics found that the return on a college investment leveled off around 2005 with college graduates earning 45 percent more than high school graduates, but this estimate does not count the cost of paying off crippling college loans that high school graduates escape. Since 2005, the college premium shows signs of declining.
In September 2009, Korva Coleman of National Public Radio dared to ask a question that would have been absurd a generation ago: “If a college education doesn’t always get you a job, but it almost always gets you in debt, is it worth going to college?” Richard Vedder, a professor of economics at Ohio University, was among those who answered “probably not.” We are simply sending too many students to college and our economy simply cannot find appropriate jobs for them. “I think some kids are going to college that probably shouldn’t go to college,” he said. “It’s becoming more and more difficult for new college graduates to get jobs, independent of the recession. Twelve percent of the mail carriers in the country have college degrees, and I have nothing against mail carriers with college degrees, but I don’t think it’s an absolute necessity to have a degree to carry the mail.” He suggested that instead of pursuing the four-year college route, students should consider community colleges, career colleges, and vocational schools. “And some people, particularly those who are sort of, say, marginal academically anyway, perhaps it’s a waste of money to go to a four-year school and run up a huge debt.” Boyce Watkins, a professor of finance at Syracuse, told Coleman, “This blanket notion that going to college will guarantee you a better economic future is not always true.”
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