Despite the supposed strength of the US labor market that is touted throughout the mainstream financial press, the reality isn’t so rosy. That’s especially the case for younger workers, who are finding out the hard way that the college degrees they’ve spent hundreds of thousands of dollars acquiring aren’t worth the paper they’re printed on.
Overall the underemployment rate for workers aged 22 to 27 is just a touch over 41%. That’s a reflection of the fact that many college graduates today take jobs that don’t require a college degree. Whether they’re flipping burgers at McDonald’s, working for temp agencies, or finding some other way to make money while they find their dream job, there’s no denying that young people today probably have more paper qualification than previous generations but don’t have anywhere near the same employment prospects.
With underemployment often comes lower pay, and with it the inability to pay back student loans. And with student loans continuing to rise to ever-higher amounts, that doesn’t bode well for those just entering the labor market. Already saddled with tens or hundreds of thousands of dollars in debt, many young Americans will undoubtedly find themselves facing bankruptcy if they can’t pay off their bills. That would have follow-on effects, delaying their ability to buy a house, get married, have children, etc.
In short, the future for many Americans looks bleak indeed. Over a decade on from the financial crisis, the country can’t really be said to have “recovered.” Rosy economic data in the form of aggregates conceals the fact that all the benefits of the recovery have accrued to those who were already wealthy, who already had jobs, and who already had significant assets. Those who were lower down on the totem pole or just starting out in the labor force didn’t benefit nearly as much, if at all, and they’re going to find it a tougher road to hoe in the future.