Back in the day, the goal for many young people was to leave the nest and live on their own. They could spoil their appetites by eating chocolate chip cookies before dinner, stay up late watching television, and leave their beds untidy. Today, because the cost of living is spiraling out of control, the sweet birds of youth are staying in the coop or moving back home with mom and dad, new research has found. While this ubiquitous development might be the subject of scorn, can anyone blame Generation Zers and millennials for living at home in their room upstairs surrounded by posters of Britney Spears and the Back Street Boys?
Bidenomics 101: Living at Home
According to a new Harris Poll-Bloomberg News survey, half of young adults are still living at home with their parents. Most do not want to be shamed for the transition back, as close to 90% of polling respondents stated that their peers should not be judged for this setback. Roughly three-quarters of participants noted that the decision was mainly financial. They stated that the driving factors were saving money, taking care of older family members, being unable to live independently, helping out with family expenses, and setting aside money for a down payment.
Can Anyone Blame Them?
Sure, it is easy to poke fun at the current generation of kidults who choose to work remotely on a bed of plushies in their Power Rangers pajamas. But the reality is that the economic situation is broken for millions. Price inflation and the overall cost of living are the primary reasons for many of these unique trends. Let’s take a peek at four components that impact young people the most: food, transportation, shelter, and student loans.
Food inflation has skyrocketed in recent years, with supermarket prices still 3% higher than they were a year ago. Within the Bureau of Labor Statistics consumer price index (CPI), many items remain elevated or have reaccelerated their upward trend, from chicken (+1.3%) to potatoes (+0.6%). Outside of the CPI, shoppers are witnessing massive jumps in a basket of goods: olive oil, orange juice, and avocados.
As crude oil prices march toward the critical $100 threshold, the pain at the pump is being felt by motorists, including young folks who might already be paying an arm and a leg for their clunker. The national average for a gallon of gasoline is close to $4. This impacts standard transportation services, a CPI category that has spiked 10.3% year-over-year and risen 2% month-over-month. In addition, a McDonald’s cashier has seen his or her public transportation costs jump by 3.9%, while TikTok influencers have seen their airline fares climb by nearly 5%.
Median national rent prices stood at $2,052 in August, just $2 short of last year’s record high of $2,054. Even if young people had the means to purchase a residential property, the median mortgage payment was $2,161 in July. Across the country, shelter costs have swelled considerably; the index is up at an annualized basis of 7.3%. The good news? There has been an apartment construction boom since the onset of the public health crisis. The bad news? New builds are expected to dry up soon because of ballooning borrowing costs and surging input costs, be it labor or raw materials.
After a more than three-year COVID-related pause, student loan payments will begin again in October. In total, student loan debt is about $1.57 trillion. This massive red ink might have been serviceable before the coronavirus pandemic, but now that interest rates are at their highest levels in more than two decades, college and university graduates will find it harder to keep their heads above water.
Just Get a Good Job, Bro
But some may counter that young people living at home can get a good job. Indeed, labor conditions are tight, and nominal wage growth has been terrific. The chief challenge is that the job market is easing amid a slowing economy and rising interest rates. The other problem is that real (inflation-adjusted) wages are down 3% since 2021. So, obtaining a worthwhile employment opportunity is one ring on the ladder to success. When paychecks do not stretch very far and purchasing power is eroded daily, millions might feel financially insecure and apprehensive to wave goodbye to mom and dad and rent an overpriced apartment that may have cockroaches, zero sunlight, and a blue-haired next-door neighbor with “Orange Man Bad” and “I’m With Her” stickers plastered on the front door.
Suffice it to say, life ain’t what it used to be.