Millennials, jobless and dwelling in their parents' basements, have been labeled in the media as "lazy and entitled," says the Huffington Post. But before judging them as apathetic loafers, there are real economic reasons why millennials are drawn to the shelter and food-full-fridge of their childhood homes.
In March, the Onion ran a story about a college senior who "already has grueling 14-month employment search lined up after graduation." The article is satire, but too much truth bled through as the fictional student describes how he has "prepared himself to 'hit the ground running' right away with a prolonged, demoralizing, and desperate job hunt."
So, why are millennials unemployed and living at home? Here are a few answers:
1. The rise of the unpaid internship
“ ‘Internships to nowhere' have evolved far from their original purpose," says Forbes magazine. "Prior to the 1990s, formal internships were rare. They functioned as apprenticeships in credentialed professional programs such as health care or accounting. But starting with late-wave Xers, this formality began to fade. College credit started to replace pay as more high-prestige companies offered unpaid positions, which continued to attract plenty of well-qualified applicants willing to compete for free."
With millennials resorting to unpaid internships to start their career, parents are resigning themselves to housing their millennial children (or paying for their child's housing in another city) for the duration of their internship and subsequent, prolonged job hunt.
2. Entry-level jobs are scarce
The reality is that today's entry-level candidate is someone with a bachelor's degree, relevant campus work experience, an unpaid internship (or two or three), and other professional work experience on his or her resume. And yet, even those high-standard-entry-level jobs are hard to find.
The Wall Street Journal reported that “companies bruised by the recession have stayed lean by automating and outsourcing core functions while slashing training budgets and payrolls. But in an effort to cut costs, some companies also have cut entry-level jobs that serve as a crucial first step on the path to a professional career. And others have made the responsibilities for first-timers more sophisticated, raising the bar for new graduates, who are expected to arrive job-ready from day one."
3. The paradox of needing job experience to get a job
An applicant needs job experience to be considered, but he or she cannot get job experience without a job.
This paradox has led to unfathomable rates of recent graduate unemployment. "The unemployment rate for college graduates ages 20-24 this August was 10.8 percent. For those with a Bachelor's degree, the number was 10.6 percent while those with a Master's degree faced a 17.2 percent unemployment rate, according to data from the Bureau of Labor Statistics," says the Huffington Post.
Thus, many college grads end up like Muara Donovan, 26, who was spotlighted in Huffington. She "graduated with a Master's in International Affairs from Columbia University in 2012. After searching for a paid opportunity and 'applying like crazy,' Donovan moved back in with her parents during the summer after graduation to work a summer job and save money."
4. Incomes are down, but costs are up
In 2012, inflated-adjusted median household income was at its lowest since 1999 — lower than during the recession years, according to statistics from the U.S. Federal Reserve. But prices go up every month, as the Consumer Product Index from the Bureau of Labor Statistics shows. Thus, incomes are not increasing as fast as rent or goods prices. Millennials, even those fortunate to find a 9-to-5 job, cannot yet afford the expenses of living on their own.
5. Baby boomers are not retiring
"As the largest generation born in U.S. history, baby boomers' sheer numbers coupled with their reluctance to retire will likely ensure that their influence endures in the workplace in the coming years. Although the first wave of boomers became eligible for early retirement under Social Security about six years ago, the generation still constitutes about one-third (31 percent) of the workforce," Gallup reports.
If baby boomers do not retire, then the hordes of millennials waiting in the wings ready to take the jobs of retirees will be waiting for a long time.
6. Crippling student loans
American students' debt reached $1.08 trillion — yes, you read that right, trillion — in 2013, an increase of over 300 percent in 10 years, reports Time magazine. What that means for the economy is a sluggish housing market. Rohit Chopra, from the Consumer Financial Bureau, told Time in late 2013 that "three-fourths of the fall in household formation can be directly correlated to student debt." Graduates do not have the "disposable income or the credit score to buy a house. So they boomerang back home," Time reported.
The article noted that 81 percent of borrowers are considered the "most burdened borrowers," meaning they have more than $40,000 of student debt — some owing hundreds of thousands. This means that graduates return home, and delay marriage and family, to save money and pay back their debt, according to Businessweek.
7. The go-after-your-dreams philosophy13 comments on this story
The mantra that "you can do anything" was ingrained in the young minds of millennials. Today, they remain optimistic and completely "in control of their destiny," reported the Huffington Post.
Forbes addressed how this philosophy translates in job hunting. "Famously confident of their eventual success, Millennials don’t move on to alternative career choices in response to adversity — as many young Boomers and Xers would have done."
Thus, millennials stagnant at home are waiting for not just any job, but the perfect job.