Why the 20s Are Nothing to Roar About
Twenty-one year old Meryl Draper, who graduated with honors in April from McGill University, took a big risk.
She relocated to Washington, DC in May to take an unpaid internship at a public relations firm. She stayed with family friends and kept her spending to a minimum.
Draper received a job offer last month.
"I took out a fairly significant loan from my parents in a leap of faith of making it work here in DC. It paid off, but it very well could have gone the other way," said Draper.
Others have not been so lucky as they come into the worst job market in the post-war period.
Twenty-three year old 2010 Humboldt State University journalism graduate Carly Matson has been pounding the pavement for a job in her field. She lives in an apartment with three others in California.
"I work 20 to 30 hours at Bath & Body works, but that barely gets me by. I've always been very conscious and strict on how I spend my money," said Matson.
She said the money it took her to earn a college degree is hard to handle at times - especially now as she starts to pay back her student loans on a part-time salary.
Matson said, "I feel like most of my friends aren't using their college education to pay for it. A lot of them are in the same boat as I am - just working to pay the bills and get by."
The challenging economic situation is giving 20-somethings nothing to roar about. Friday's monthly employment report is not expected to create much optimism among young Americans on the job hunt.
Generation "Y don't you have a job" is coming into a world where nearly one out of ten people are unemployed. Among their age group, the number is even higher. Census Bureau statistics show one in three people in their 20s were unemployed last year. That figure is worse than any other age group.
The economic prospects for this Millennial generation are very questionable. Decision Economics Chief Economist Robert Brusca said a poor start can be debilitating and lead some on new and different career paths that might not be as rich.
"Hiring trends are bad across the board. Because of poor job market conditions, students are choosing to extend their education to avoid unemployment," said Brusca.
22-year-old Rowan University Graduate Caitlin Ponticello is using that strategy. She has been unable to find a job in the psychology field after graduating in May. So, she is now taking classes at Richard Stockton College of New Jersey for a masters degree in communication disorders.
Ponticello is living at home with her mother for financial reasons and has about 20-thousand dollars in student loans. She said she knows more unemployed college graduates in her age group than those with jobs.
"If I had a full-time job, I would definitely be spending more than I am right now," said Ponticello. "I have a wish list of items I would love to buy, but just cannot afford right now."
There's concern the vast financial burdens among the 20-something crowd could contribute to slower growth.
Moody's Chief Economist John Lonski said those in their 20s historically have helped drive innovation. He wonders who Lee Iacocca could sell Ford's Mustang to today.
"20 to 29-year-olds ought to be major consumers of 'avant guard' products, especially as they pertain to high technology and fashion. They play an important role as critical consumers of new products that, if successful, will create new employment opportunities," said Lonski.
Brean Murray, Carret & Co. Managing Director Eric Beder said unemployment among members of Generation Y is causing a very worrisome trend particularly for the retail sector.
"If this is a longer term issue, it has the potential to stunt what is normally a very free spending group and create a lost generation of consumers that will serve as a damper for a long time," said Beder.
Stephanie is Squawk Box producer. Follow her on twitter @StephLandsman
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