And what can be done to help
The Millennial generation is the most well-educated generation in history, coming of age in a world that has never had more total wealth than it does right now.
And yet, millennials are struggling mightily in the job market. Many can’t find work. Many of those who do find work are overqualified for their positions. And stable, long-term work? For many people it seems to be a thing of the past.
So why is it so tough for millennials to find good work? And what can be done about it?
Millennials are getting screwed
First, we have to address the underlying problem. The millennial generation got screwed. Young people were told to take on large amounts of debt to get a college degree, which would then lead to a good job and the ability to pay off that debt.
But for many people, the degree has not led to a good job, or even a job at all. As a result, the money to pay off the debt isn’t there, forcing countless millennials to delay major purchases, starting a family, and home ownership. This has severe, long-term effects on wealth accumulation, and damages our economy, not to mention trapping many people an unstable economic situation.
And even worse, the system is rigged against people with student debt, and even bankruptcy lawyers know it. Consider this report by Kayla Webley in Time Magazine:
“If you’re struggling to pay credit card debt, car loans or even gambling debt, you can wipe the slate clean in bankruptcy. Struggling to pay your student loans? Sorry, you’ll just have to figure that one out on your own.”
In that same article, Webley writes that according to a report by the National Association of Consumer Bankruptcy Attorneys (NACBA), 4 out of 5 bankruptcy attorneys believe the U.S. bankruptcy code should be altered to ensure that students can get the same relief from their debt burden that other debtors receive.
When college graduates can’t find jobs, we know something is fundamentally wrong with the economy
Taking on debt to attend college or university only makes sense if that debt can be paid back. That’s the essential contract young people were given: “Take on this debt now, and you’ll pay it off later with your awesome, well-paying job.”
But, if our economy isn’t creating enough jobs that match with the skills learned in university, and if the burden of debt forces people into a desperate situation, how can we expect millennials to find good work? It’s asking the impossible.
Not only is there a significant mismatch between the education system and the job market, the trends of advancing artificial intelligence and automation threaten millions of jobs and could make even this job market look like the good old days.
Millennials are in big trouble unless action is taken
It is possible that the millennial generation will be squeezed from all sides. High debt, high unemployment, massive expansion of automation, rising wealth concentration in the hands of a few, and an aging population, could all conspire to push the living standard of millennials below that of the previous generation.
It is a disturbing, but plausible scenario. But it is not inevitable.
How we can help the Millennial Generation
There are things that can be done to help the millennial generation. All it takes is a willingness to think outside the box and some political will.
Here are two ideas that would make a big, positive difference for the millennial generation.
Student Debt Forgiveness
It is incredibly difficult for students to discharge debt. People facing student debt can’t discharge their debt by filing for bankruptcy. That may be a good deal for the banks and government (at least in the short run), but it is incredibly harmful to the millennial generation.
So, what’s the solution?
The government must begin a program of student debt forgiveness. According to Bloomberg, College Costs increased over 500% between 1985 and 2013. If we look at education as a product, the fact is the price has increased, the quality has remained the same, and it didn’t deliver on its big promise: More and better jobs. I think many millennials are due a refund.
With the total outstanding student debt having reached $1.2 trillion, a debt forgiveness program would have to be phased in. And while it would be expensive, it would grow the economy substantially in the long run. It could combine government forgiveness of loans with reform to bankruptcy laws as mentioned above.
With the average student debtor paying about $350 every month, imagine the economic boost if that money was spent on increasing homeownership, buying vehicles, and countless other purchases. It would be a massive economic stimulus.
Universal Income Security
A key problem faced by millennials is the changing job market. While we were educated in a system designed for stable, long-term employment (climbing the ladder at one company), that world is rapidly receding. Instead, jumping from job to job, building a personal brand, dealing with unstable income and variable employment has become the norm.
Yet, as our economy undergoes massive change, our economic system and education system have not caught up. Additionally our social welfare system is overly bureaucratic and inflexible.
A new generation and a new economy requires a new way of thinking. We need a way to provide stable income security for everyone, helping people manage the ups and downs of our rapidly shifting economy.
Universal Income Security, AKA a Guaranteed Income, or Universal Basic Income, would be a payment from the government to all individuals regardless of employment status. It would set an income floor below which nobody could fall. This would provide a buffer against the shocks of increasingly unstable, piecemeal employment. It would also give people a chance to gain more skills if their degree wasn’t helping them find a job, as people would have the income stability to extend their education in a more employment-friendly direction.
There is hope for the Millennial generation. But as things stand now, too many of our politicians are stuck in old ways of thinking, applying the solutions of the past to the problems of the present, leading to increased suffering in the future.
As more and more millennials struggle to find jobs and are held back by massive debt burdens, the fate of an entire generation, and our future economic and political stability hangs in the balance.
Read more about why so many Millennials are struggling
Most millennials living at home simply can’t afford to leave – Globe and Mail