The Millennial Job Deficit Jobs: While economists, the administration and the Fed all trumpet "near full employment," a stark reality intrudes: Most of the jobs created in the last decade have been temp or gig jobs, not permanent full-time work. It's a huge problem.
From 2005 to 2015, fully 94% of the 10 million net new jobs were either temporary or contract gigs, says a new study by economists Lawrence Katz of Harvard University and Alan Krueger at Princeton University. The share of Americans — mostly Millennials — now doing what the study's authors call "alternative work" has risen from 10.7% to 15.8%.
That wouldn't be so bad if it was what workers wanted. But that's not the case.
"A large majority of temporary help agency employees on temporary jobs would prefer a permanent job and almost half of on-call workers would prefer a job with regularly scheduled hours," the authors note.
This, perhaps better than anything else, explains why the millennial generation seems so disconnected from the working world — and why, for instance, 40% of that generation still live with their parents, a 75-year high. They can't afford to live on their own.
For many of these younger workers, the American dream of making more than their parents did is dead, according to a new study by economists at Stanford University, Harvard University and the University of California, Berkeley. For those born in 1940, 90% could expect to earn more than their parents. But for those born in the 1980s, only about half can expect to do better than their parents.
This will have profound ripple effects across society. Start with housing. While the millennials are now the largest generation ever, and the number of adults under 30 years of age has risen by 5 million since 2006, the number of new households formed over that time grew by just 200,000. That explains why housing has been in a prolonged slump.
This may well be the challenge of the coming decade — to re-skill and retrain younger workers so that they can find better, higher paying jobs and move out of their mom and dad's house and into their own digs. The millennials are a troubled generation, it's true. But they're not lazy. Nor are they slackers. They're just bearing the brunt of decades of failed economic policies that have cut U.S. economic growth from 3%-plus to below 2%, and caused family incomes to stagnate.
As a start, let's hope the new administration will cut taxes and roll back unnecessary regulations upon entering office. That at least would be a down payment on both rebuilding the economy and moving younger workers off their parents' couches and into high-paying jobs.
