In a few weeks, tens of thousands of students will graduate from college or university, and attempt to make their way in the economy. During better times, these former students would find jobs, rent apartments, and almost immediately begin to pump money into the economy. But—three years after the nadir of the economic crisis—the job market for young people is still terrible, and many have opted to live with their parents in order to save money. This, you can probably imagine, has only made the economy worse. Here’s The Washington Post:
More than one in five adults between ages 25 and 34 live with their parents or in other “multi-generational” living arrangements, the highest level since the 1950s, according to the Pew Research Center.
Analysts estimate that there are more than 2 million fewer occupied homes than there would have been had Americans continued moving into new homes and apartments at the rate they did before the recession. Not only are young people returning to the nest in numbers not seen in generations, but also the weak job market and increased border enforcement have caused a marked decline in immigration, hobbling another major source of new households.
Another thing to add to the pot of problems facing college graduates is the burden of student loans. When you owe hundreds of dollars to the bank every month, living with your parents—and saving even more money on rent—makes perfect sense, even if you have a job. To a certain extent, the whole reason I was able to take a low paying job out of college, and spend a lot of time writing was because I graduated without student loans. Paying back hundreds of dollars would have robbed me of valuable flexibility, and limited my opportunities.
The frustrating thing about all of this is that the solutions to this are conceptually easy. You can offer debt relief, you can expand eligibility for welfare, or you can simply give money to people, and allow them to spend it on whatever they like. Some young people might waste a $5,000 check from the government, but the large majority—if not the vast majority—would use it to pay off debt, and gain some measure of independence. It wouldn’t even cost that much, relative to the short and long-term economic cost of idle youth. It’s a no brainer, that has no chance of happening in the current political environment.