Too broke to leave home even at 35 years of age: Over 30 percent of young adults under the age of 35 living at home. Home ownership rate of young adults continues to plummet.
Young Americans are so broke, they can’t leave home. That might sound like the line of a really bad joke but this is the unfortunate situation in our economy. Many young Americans are saddled with mind numbing levels of student debt. Younger Americans are carrying the heavy burden of the $1.2 trillion in student debt outstanding in the United States. At the end of the day, many already have a mini-mortgage before they even go out and house hunt. It should come as no surprise that sales volume is downright anemic in the housing industry because new households are simply not forming as they did in the previous generation. Younger Americans have lower wages, more college debt, and massively reduced benefits compared to the previous generation. The idea of buying and staying put in one location for 30 or more years simply does not fit in with the economic conditions of many younger households. In fact, we have the highest number of young Americans living at home today compared to any other time in US history. Even through the recovery, the number of young Americans living under the roof of mom and dad has increased dramatically. In essence, young Americans are too broke to leave home.
McWages for the McAmerica job recovery: The scorecard – 3.6 million higher-wage jobs lost due to recession with only 2.6 million added back. 2 million lower-wage jobs lost during recession but 3.8 million added since the recovery.
We are witnessing an economic race to the bottom. The recovery has largely been one of low-wage work. This is easily seen through the paychecks Americans are receiving. What isn’t readily visible is what is being slashed on the backend including healthcare, benefits, and the expanding impact of inflation on purchasing power. A report from the National Employment Law Project finds the continuing trend of the McWage recovery. This is a suitable name for what is occurring in this so-called recovery that is only exacerbating wealth and income inequality. For example, 3.6 million higher-wage jobs were lost due to the recession and only 2.6 million jobs in this segment have been added back. We are in a net-deficit of good paying jobs by 1 million. On the other hand, we lost 2 million low-wage jobs during the recession but have added 3.8 million lower-wage jobs during the recovery. A net add of 1.8 million lower-wage jobs. This is the kind of recovery being dished out by the bailout happy Wall Street and their aggressive behind the scenes shenanigans of raiding the pockets of Americans. The story is the same: corporate welfare and financial handouts while austerity and a race to the bottom for the rest.
The comprehensive guide on why you will never retire living the way you do: Examining the typical $50,000 household budget and why most Americans have nothing to very little saved for retirement.
We are facing an impending retirement crisis of epic proportions. The math is tough to look at. We have a growing population of aging baby boomers hitting retirement age with weak investment portfolios. Many will face increased healthcare costs since most of healthcare spending tends to hit in old age. Many older Americans are finding it tougher to retire and this also plugs up the pipeline for younger workers to move up through the employment channels. Many young Americans are confined to a new low-wage economy where pensions are extinct, benefits are lacking, and wages are far behind that of their parents even after adjusting for the corrosive power of inflation. The idea of retirement is actually a modern one. For most of our civilized history the only people that had time for fun and leisure were the top one percent of society. Life in other words was short and brutish for most of us. The US of course was the first nation to have a large and powerful middle class but this only came about after World War II. We are now trending back to the more historical norm of massive inequality for the bulk of the population. If nothing is done to reverse this trend, we will simply revert to how things were and the notion of retirement is going to disappear along with pensions. Most Americans still believe retirement is in the cards but their saving habits show a completely different future.
The Fed is channeling higher interest rates: Fed Committee participants anticipating higher rates and inflation already permeating throughout economy.
A market addicted to low interest rates is about to get a shock. Today our debt addicted system is accustomed to central banks providing all sorts of easy money. The market is awash with easy credit and inflation is rearing its funky head in all sorts of segments of the economy. Low interest rates have provided a sort of financial buffer for big banks and Wall Street to gain their footing after the global debt crisis beat down. Yet the Federal Reserve, the most powerful central bank in the world is now channeling higher rates in the near future. Fed Committee participants are already expecting higher rates for 2014 with most expecting higher rates by 2015. The Fed is going to have a tough time turning around this low interest rate ship since the market is now addicted to low rates. The Fed has to maintain its credibility and will need to act. The market is like a jilted lover hoping her partner will change and giving multiple second chances. Yet the Fed is now drowning with a $4 trillion balance sheet and Wall Street has developed a taste for single family homes pushing out regular families trying to buy a home to live in. What will higher interest rates do to this market?