Young adults today are slower to achieve financial independence

Young adults today need more time, education and work experience to get what’s considered a ‘good job’ than previous generations, according to two new reports from the Georgetown University Center on Education and the Workforce (CEW). Today, it takes most young adults until their 30th birthday to find a good job, whereas 40 years ago most had a good job in their late twenties.

The CEW defines a “good job” as one that enables young adults to be economically independent. For workers 45 and under, that means earning at least $35,000 a year, and for those over 45, it’s at least $45,000 a year, a figure that varies somewhat by income level. local life. Nationally, the median annual salary for a good job for workers aged 25 to 35 is $57,000.

The surest path to financial independence is a college degree, according to reports published under “Youth’s Uncertain Path to a Good Job.” Today, 80% of workers with a bachelor’s degree or higher have a good job by age 35, compared to 56% of those with a college or associate’s degree, 42% of those with only a high school diploma and 26% of workers who have less than a high school diploma.

“Clearly, getting a bachelor’s degree or higher is increasingly the best bet when it comes to increasing one’s chances of getting a good job,” the research says.

The two reports, titled “How Limits to Educational Affordability, Work-Based Learning, and Career Counseling Impede Progress Toward Good Jobs” and “How Racial and Gender Bias Impede Progress Toward Good Jobs,” use survey data from the US Census Bureau and the Bureau of Labor Statistics.

Kathryn Campbell, co-author of the reports and associate director of editorial policy at CEW, said the reports address the common narrative that young people today don’t have as many opportunities as young people in the past. .

“I think our report shades the narrative a little bit, in that what we’ve found is that when adults are under 30, that’s the case, they have less of a chance of having a good job than, say, comparable jobs. many of the baby boomer generation,” Campbell said. “But older than that, today’s youth are actually more likely to have a good job than the previous generation.”

However, this is only true for workers with a bachelor’s degree or higher. Just over 70% of college graduates born between 1946 and 1950 had a good job by age 35, compared with 80% of the cohort born between 1981 and 1985.

And while more of today’s young adults are doing well at 35 than the previous generation, Campbell said the fact that it takes them up to 30 years to find a good job has implications for how which they live their lives, possibly causing them to delay marriage. or giving birth or buying a house. And according to the research, households headed by 35-year-olds today have less than two-thirds the net worth that similar households held 20 years earlier.

Artem Gulish, senior policy strategist and research professor at CEW and co-author of the reports, said that between baby boomers and millennials there has been a shift in the kinds of skills needed to get a good job.

“It used to be that many young people, especially young men, could finish high school and get a factory job relatively easily, or some other blue-collar job,” Gulish said. “Whereas many jobs today require at least some quality work experience, which takes time to acquire. And the jobs require people to learn more skills, especially cognitive and interpersonal skills. Previously, many blue-collar jobs, in particular, were more about physical skills, which didn’t take as long to learn.

Matthew Hora, co-director of the Center for College-Workforce Transitions (CCWT) and associate professor of adult and higher education at the University of Wisconsin-Madison, said he was not surprised by the findings of the CEW; Bachelor’s degrees have long signaled to employers that a worker has certain skills, he noted.

“For a long time, one of the main controls for high-paying jobs was having a bachelor’s degree,” Hora said. “I think in some disciplines — take engineering, for example — it’s pretty fair to say that a good three to five year education in some of those disciplines is key to getting some of those high-paying jobs. I think it’s more debatable with other professions.

Hora said research done by his team at CCWT shows that some HR managers and hiring supervisors equate a bachelor’s degree with a sense of work ethic and perseverance, but not an assessment of skills or competencies. knowledge for a job.

“I think it’s really complicated why a bachelor’s degree led to these salary and financial security gaps,” Hora said. “But one reason is that people who hire see a bachelor’s degree as a signal of a host of attributes of a job candidate, some of which, in our opinion as researchers, are highly questionable.”

The CEW reports note that as post-secondary education has become essential to finding a good job, the cost of attending a four-year institution has roughly tripled, averaging nearly $30,000 per year for tuition, accommodation and meals. To help more young adults enjoy the benefits of a college degree, educators need to invest in making degrees more accessible to any young person who wants to earn one, Campbell said.

“We want there to be good jobs available for people who don’t go on to post-secondary education, but we know post-secondary education is a great path to good employment,” Campbell said. “So making this path easier to navigate is really an imperative for educators to ensure young people get the most out of their college experience. People go to college for a wide variety of reasons, and finding a good job is one of them.

Work-based learning programs, including internships and apprenticeships, can also expand young adults’ access to good jobs. But CEW research found that these opportunities are more common among those attending college; 54% of young adults with a bachelor’s degree or higher have completed work-based learning programs, compared to only 7% of those with a high school diploma or less.

The reports recommend that high schools and colleges employ more guidance counselors to help teens and young adults make fully informed decisions about their academic and career paths. Currently, each advisor is responsible for nearly 70% more students than the CEW-recommended student-advisor ratio of 250 to one, according to reports.

“Essentially young people need guidance,” Gulish said. “We have more details becoming available on the most promising routes, but young people don’t have a lot of experience – they don’t necessarily understand what would work for them and what wouldn’t.”

CEW research also found significant disparities by race and gender among young adults with good jobs. At all levels of education, young women are less likely to have good jobs than young men within the same racial/ethnic group. And women of color are the least likely to have good jobs.

According to reports, young white workers are more likely than young black or African American workers or young Hispanic or Latino workers of any gender to have good jobs. At age 35, 70% of white workers are likely to have a good job on average, compared to just over 40% for Hispanic/Latino workers and over 50% for black workers.

The reports also found that the median net worth of young white men with no more than a high school diploma is $2,300, more than 2.5 times that of young black women with college degrees. a bachelor’s degree or higher, which is $900.

“Women in particular need more degrees than men to earn equivalent incomes,” Campbell said. “When you add race to the mix, there are even deeper disparities between groups, and some of them have to do with women and members of underrepresented and minority communities earning less money when they occupy similar roles.”

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