Recently, there have been some alarming millennial unemployment figures, and speculation that our joblessness, combined with our debt, is going to cripple America. Just look at this:
- The unemployment rate for millennials for December 2012 is 11.5%, although if the labor force participation rate were included, the actual number would be 16.3% (non-seasonally adjusted).
- Twenty-five percent of millennials live with their parents.
- Student loan debt, at $1 trillion, has surpassed total credit card debt.
Yikes. We’re not much use to anybody, are we? We seem to be the faint and pathetic echo to our parents’ boom. But are we really going to cripple America? Let’s begin with arguments in favor of a depressing “yes,” and work our way towards a more optimistic “no.”
Last year, the National Association of Consumer Bankruptcy Attorneys (NACBA) released a study claiming that the gigantic student debt would create a “debt bomb,” which could be as crippling to the economy as the mortgage crisis. This is one of the primary fears associated with the effect of millennial unemployment on the rest of the nation — not only are millions of us unemployed, we’re also in debt. According to the Consumer Financial Protection Bureau, student loan debt has surpassed the $1 trillion mark and now exceeds credit card and auto loan debt. The Department of Education states that the two-year default rate on federal student loans was 9.1% in 2012, which means we may soon burden the government with an additional $90 billion in debt.
That’s definitely not good, but it is nowhere near the roughly $14 trillion mortgage debt in 2007, nor the hundreds of billions lost in the economic fallout. Just look at this graph and tell me the two crises will be equally terrible.
The unemployment rate for college-educated millennials is also only 3.9%, which suggests that even if we are assuming record student loan debt, we are at least getting employed. Additionally, the National Association of Colleges and Employers job outlook survey found that employers anticipate hiring 13% more graduates in 2013.
So what about the rest of the unemployed millennials? The U.S. economy has been growing slowly and has seen recent growth in the manufacturing, construction, health care, and restaurant sectors, which bodes well for lesser-educated unemployed millennials. The job tree isn’t exactly blooming, but it is at least budding.
To be fair, modest economic growth in a few sectors doesn’t equal full recovery, or even drastically improved employment numbers (at least not in the short term), but it hardly spells crippling disaster either. Similarly, the student debt situation may be bad, may even be worthy of being called crisis, but it will not cut us at the knees.
America has faced many crises in her short history, but our citizens have always risen to the challenge. We are the Echo Boomers, the millennials, the unemployed. we may not be much use to anyone right now, but I think we will pay our debt, use our degrees, and otherwise find employment. I think the echo will eventually be louder than the boom.