Many young adults find themselves still tethered to the Bank of Mom and Dad, and that dependence is taking a toll.
Kevin Davis moved back home last December after receiving a business finance degree from the University of North Carolina. He has yet to land a full-time job.
The 25-year-old often commiserates with his father, John, an information-technology professional who was laid off as a project manager in October 2010 for the second time since 2007. John Davis, a resident of Winston-Salem, N.C., who currently receives unemployment insurance says.
"At times, it's hard for me to keep up my own spirits as well as Kevin's."
As recent college graduates scramble to find full-time jobs, numerous parents are helping their children pay bills or letting them live at home again.
The Dilemna for the Parents:
About 59% of parents provide or recently provided financial assistance to children aged 18 to 39 who weren't students, concluded a May survey of nearly 1,100 people by the National Endowment for Financial Education.
The Dilemna for the Students:
According to Census data, 5.9 million Americans between 25 and 34 years of age—nearly a quarter of whom have bachelor's degrees—live with their parents, a significant increase from 4.7 million before the recession.
But many parents can't afford the extra expense.
- 26% of those polled by the nonprofit group took on more debt to help their offspring.
- 13% delayed a planned life event such as a home purchase.
- 7% postponed retirement.
Compounding the problem is the fact that certain parents are crowding the younger generation out of the job market because their support of their grown kids means they can't afford to retire.
Kevin, a licensed pilot with aspirations to run an airport, says he knows someone more than twice his age who beat him for an airport managerial post this summer because the older man had more experience.
The strain of joblessness and continued financial support for Kevin—which his father estimates costs $300 a month, or 18% of the family's living expenses—have exhausted his parents' savings and forced the 61-year-old Mr. Davis and his wife, Donna, a 54-year-old teacher's assistant, to start spending money from their retirement accounts.
Mr. Davis says.
"Short of winning the lottery, I don't know when I will be able to retire."
And he says his wife "probably will never retire."
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NEFE President Ted Beck.
"If the economy remains weak, you may see more parents sacrificing their financial health for their struggling adult offspring."
Personal trainer Debra Jacobson shares her Jupiter, Fla., home with two adult daughters and a teenaged one.
Faith Jacobson, center, with her mother, Debra, and father, Jerry, at her dad's home. She splits her time between her parents' residences.
The 60-year-old divorced mother says.
"I can't afford home insurance or health coverage because I am supporting these three daughters with food and a roof over their heads."
She figures that costs around $600 a month.
Faith, 23, has split her time between her mom's and dad's residences since she graduated in August 2010 with a communications degree from the University of South Florida. She is trying to repay about $23,000 in college debt with the money she earns as a part-time bartender. She says.
"I want to be a TV journalist or professional singer, but there aren't many opportunities here."
Her older sister, Jackie, who is 26 and teaches part-time, owes about $60,000 on the loans she took out to get her mechanical-engineering and math degrees. She says of living with her mother.
"I feel like a burden. What is there to be proud of?"
Ms. Jacobson, meanwhile, says she regrets that Faith and Jackie had to borrow so heavily for college. As parents, she says,
"Our job was to pay for their education. They should not have debts they can't pay."
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Young graduates' protracted dependency can be emotionally draining, too. Cliff Zukin, a Rutgers University professor of public policy and political science says.
"Parents feel upset when their adult child can't get the kind of job that he or she wanted because they raised them to believe 'you can do anything you want.'"
Some worried mothers and fathers have become closely involved in the employment searches of their adult offspring.
Damian Birkel, founder of Professionals in Transition, a support group in Winston-Salem says.
"Parents want to get on with their own lives and regain the privacy they have lost from sharing their empty nest with grown offspring."
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So far this year, staffers at GoliathJobs.com, which operates free websites for college students and boomers, have counseled more than 2,500 parents seeking job-hunting help for their kids right before or after their children graduated, reports founder David Mezzapelle. That's up from 150 calls in 2007.
Marcia Reinhard, youth director for the Jewish Federation of Eastern Connecticut, typifies such parents. Her son Jake returned home to Mystic, Conn., right after completing a psychology degree at Adelphi University last spring, and he is costing his parents around $200 a month.
Ms. Reinhard doesn't view her son's return as an inconvenience. She recollects that she grew frustrated and often lost sleep when he didn't look for work.
"He rarely spent hours at a time looking for work. The next thing you know, you are arguing."
Constant reminders about whether he was pursuing enough job leads bothered 22-year-old Jake. "I am already on it," he recalls telling his parents. He says.
"Then Mom would forget and start reminding him again."
In the end, his mother's intense networking helped him land a position as a $12.75-an-hour residential aide at Waterford Country School, a facility for disturbed youngsters. He expects to start the job soon.
Once he's working full-time, he'll live at home for a year so he can begin repaying his $20,000 in college debt, say his parents, who plan to charge him $100 a month in rent.
But Jake has different plans and says:
"If I am going to pay the rent, I might as well move out of the house."
COMMENTARY: The Great Recession has taught parents a very valuable lesson, and that is that their jobs as parents is almost never ending. It doesn't stop when the kids are "out of the nest" or finish college. And very few knew of them know just how deep and long lasting the Great Recession has lasted, and very few understand the permanent structural effects to the economy that make job hunting so frustrating, and often impossible, for the next generation and older generation of workers.
Americans grew accustomed to an unemployment rate of 6% or "full employment," not the nearly 10% unemployment rate we have experienced since the end of 2010. There are a lot of reasons for this, but there are three principal "job destruction forces" that have contributed to the chronic high unemployment rates we now experience. You can read about this in my blog post of November 5, 2011.
Another factor that looms large, is the ever rising debt that students piled up just to earn that college degree, only to discover that jobs in their chosen fields were far and in between. Outstanding studen loans now total nearly $1 trillion and rising. Many students were counting on full-time jobs after graduation to make it possible for them to begin repaying their studen loans. However, that task is becoming ever more difficult for many college grads, and the number of student loan defaults, are on the rise. You can read about this in my blog posts dated December 22, 2010 and September 20, 2011.
Courtesy of an article dated November 10, 2011 appearing in The Wall Street Journal
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