Parents have lower expectations for kids becoming financially independent

Parents have lowered their expectations about when adulthood should begin, according to a recent Pew survey.

… The survey finds that today two-thirds (67%) of parents of children age 16 or younger say children should have to become financially independent from their parents by the age of 22—down from 80% who felt this way in 1993.

The increased expectation that graduate school will be part of their education may be partly responsible for this change.

Most everyone thinks young adults have it harder these days.

… Young adults themselves feel things are more difficult now. And middle-aged and older adults agree it’s much harder to be a young adult today than it was a generation ago.

Strong majorities of all adults say it’s harder for today’s young people than it was for their parents to find a job (82%), save for the future (75%), pay for college (71%) or buy a home (69%). In some cases, middle-aged and older adults are even more likely than their younger counterparts to say today’s young people have it harder.

With the exception of paying for college, I’m not convinced young adults have it harder today.  Getting a job, saving, and buying a home were not all that easy for many of my generation.  At the risk of sounding like a grumpy old codger, I believe many young people feel more entitled today than in years past.  When it comes to “delayed gratification” today’s kids tend to think in terms of hours and days, not years.  Is this the result of technology and over-attentive parenting?

All that being said, there’s a good possibility my oldest will return to live at home after graduating college and therefore will not be financially independent by age 22.

Related:  No shame in living at home after college (usually)

Weak economic recovery has been a ‘boom for the grannies and a bust for the kids’

An analysis of recent jobs figures at Investor.com reveals a disturbing development: the biggest beneficiaries from the economic recovery are Boomers, while everyone else is getting the shaft.

Among those 55-and-up, the employment-to-population ratio barely dipped even in the depth of recession and is now higher than at the end of 2007. The ratio among those 25-54 remains about 4 percentage points lower than before the recession started.

Older workers are staying on the job longer, in part to counter lackluster performance of retirement accounts and housing values.  Meanwhile, the high unemployment rates of Generation X and Millennials could help explain the rise of  young adults living with their parents.

Long-Term Trend

The trend of falling employment as a share of the 54-and-under population and rising employment among those 55 and up has been in force for more than a decade.

See this chart for the labor participation rates going back to 1948.

Walter Russell Mead on the politics of this generational job divide

… it’s ironic to say the least that a president swept into power on a tsunami of young voter support has presided over a boom for the grannies and a bust for the kids. Logically, President Obama should expect to do somewhat better among senior citizens and worse among young people than in his first campaign — but logic often goes one way and politics another.

Related articles

• Are Baby Boomers Stealing Jobs from the Young? (Part 1) (businessinsider.com)

College-educated wives dropping out of the workforce

College-educated wives married to similarly educated husbands are leaving the workforce in increasing numbers, creating a trend that may hinder an already weak economic recovery.  But will young men’s lower college graduation rates reverse this trend?

… between 1993 and 2006, there was a decline in the workforce of 0.1 percent a year on average in the number of college-educated women, with similarly educated spouses.

That contrasts with growth of 2.4 percent a year between 1976 and 1992.

The result: the labor force in 2008 had 1.64 million fewer such women than if the growth rate had kept up its earlier trend, slightly more than 1 percent of the total workforce in that year….

May have a negative effect on economic growth

Stefania Albanesi, a senior economist at the Federal Reserve Bank of New York and one of the study’s authors, said the loss may hurt economic growth at a time when the nation can ill afford to have highly skilled workers on the sidelines….

Dropping out of the workforce is not just for the super-wealthy, and babies are not the reason these women are staying home.

But the trend is not limited to top earners. It has been detected among households earning around $80,000 per year….

… it’s not the tug of looking after young children that makes most educated women give up their career.

“These women usually give up their jobs when their children are school-age and not babies any more,” Albanesi said.

This doesn’t surprise me.  I know I’m not the only mom who found that juggling babies and work was a lot easer than caring for older, school-aged children while working full-time.  As they grow older, the logistical, disciplinary, and emotional needs of children can become more complicated.  For me, out-sourcing childcare for my pre-teens proved more challenging than finding a good caregiver for my babies.

Will the more women than men graduating from college, will this trend be affected?

Educational homogamy, the tendency to marry someone of the same educational level, is a decades-long pattern particularly strong among college graduates.  With the declining “supply” of men who are marriage material for educated women, what will happen?  Will female college graduates change their behavior and join their less-educated sisters in the growing trend of having children outside of marriage?  Or maybe they will begin to marry down in greater numbers.  In this case, quitting work to care for children may not be such a good option for wives out-earning their husbands, and we may see more men staying home to care for children.  That would be a significant shift in traditional gender roles, with unpredictable effects on families.

Add in the higher education bubble to these possible scenarios and anyone’s prediction about the next 30 years starts to look very fuzzy.  All I can think to do is advise my children to be ready for anything and be careful what you wish for.

Related articles:

• Non-marital births by education level as part of the growing class divide
• US Economy: Women Leaving Workforce Over Past 20 Years (wire.kapitall.com)
• Decline in Labor Force Participation Reflects Demographics, May Not Be as Bad as Reported

‘The fake it until you make it days have long since passed’

The fake it until you make it days have long since passed, and for most people I know fast and slick equals not credible. 

I’m a little disappointed.  Faking it has sometimes been a reliable mode of operation for me.  Actually, it’s more a case of acting more confident than I am feeling and accepting that I will never have all the information before I need to make a recommendation.  In these cases, “fast and slick” works better than “slow and pondering”.  But I agree that some subject matter expertise is a core factor of credible leadership.

This bit of  wisdom was included in Number 9 on Forbes‘ list of 10 Communication Secrets of Great Leaders.

9. When you speak, know what you’re talking about: Develop a technical command over your subject matter. If you don’t possess subject matter expertise, few people will give you the time of day. Most successful people have little interest in listening to those individuals who cannot add value to a situation or topic, but force themselves into a conversation just to hear themselves speak. The fake it until you make it days have long since passed, and for most people I know fast and slick equals not credible. You’ve all heard the saying “it’s not what you say, but how you say it that matters,” and while there is surely an element of truth in that statement, I’m here to tell you that it matters very much what you say. Good communicators address both the “what” and “how” aspects of messaging so they don’t fall prey to becoming the smooth talker who leaves people with the impression of form over substance.

Another recommendation is to “speak to groups as individuals”.  You can read the entire list of communication secrets here.

Unpaid internships – the good, the bad, and the ugly

It’s an employer’s market out there but is there any excuse for employers getting free labor from interns?

Unscientific survey of interns conducted in New York City near the campuses of NYU, Columbia, and FIT

The good and the bad
Unpaid internships are problematic.  On one hand, they can offer unequaled opportunities for college students to gain real-world experience in their chosen field of study.  But some employers take advantage of free labor, only using students to handle menial tasks.  And lower-income students who cannot afford to take a summer off with no pay are penalized in this competitive race to gain valuable industry experience.

The practice of not paying young people for their labor has become so ingrained in the everyday practice of American business that we’ve forgotten how bizarre and recent the development is. In the early 1980s, 3 percent of college grads had had an internship. By 2006, 84 percent had done at least one. Multiple internships are common. According to a survey by the National Association of Colleges and Employers, more than 75 percent of employers prefer students who have interned or had a similar working experience.

Employers have feasted on despair — and these aren’t internships for struggling small presses or rarefied design companies. Subsidiaries of General Electric, a company worth $200 billion, employ them regularly as an “important recruiting tool.” Disney uses eight thousand of them in dismal working conditions. Jennifer Lopez Enterprises uses them. So does The Daily Show. So does the pope. And because internship programs are sheltered from the violation of labor laws by the complicity of universities that give students “credit” for them — as long as the students pay thousands of dollars for those credits — American companies can operate these programs for the most part hidden from scrutiny. The best study of intern life in America found that companies save annually around $2 billion from pseudo-employment.

Government regulations
For-profit employers can get away with not paying student employees as long as they follow the federal government’s six-point test that attempts to ensure an educational experience for the intern.  I agree with the National Association of Colleges and Employers (NACE) that the criteria are reasonable except for the one requiring that the employer derives no immediate advantage from the activities of the student.  What?  If the intern is to perform meaningful work, it would be hoped the employer will benefit.  With a rule like this, the government seems to be encouraging employers to skirt the law.

Charles Murray, writing on the problem of growing class divisions, suggests that unpaid internships should be banned.

It amounts to career assistance for rich, smart children. Those from the middle and working class, struggling to pay for college, can’t afford to work for free. Internships pave the way for children to move seamlessly from their privileged upbringings to privileged careers without ever holding a job that is boring or physically demanding.

I disagree with his extreme recommendation, but I would support allowing internships to pay less than the minimum wage.

It can get ugly
This topic is particularly relevant for me since we recently learned that my college son will be working this summer at his dream internship, unpaid.  I am thrilled, but here’s how desperate I am.  Given the tough labor market and the importance of relevant work experience in securing a job after graduation, I would be willing to pay for my son to get the right internship.   Apparently I’m not alone, as internships for sale are part of a growing trend.  I consider that the  ”ugly” part of this internship story.

Related:  ‘Six in 10 internships lead to jobs’

‘math skills are correlated to higher earnings’

A study that looked at the correlation between college majors and earnings highlights the role of math skills in this relationship.

The economists examine the large differences in labor-market outcomes across college majors in several ways. In one section of their paper, they look at data on wages by college major obtained through the Census Bureau‘s 2009 American Community Survey. They find that among other things, math skills are correlated to higher earnings. “Wages tend to be high for engineers and low for elementary education majors, suggesting that perhaps much of the wage differences between majors are due to differences in mathematical ability and high school course work,” the authors write.

Apparently, innumeracy has a cost.
… 

Average wages for some of the most lucrative college majors

I’m surprised at how well a political science major pays, even without an advanced degree.
… 

Average wages for some of the lowest-paying college majors

Considering that the average salary for educators in Westchester County approaches six figures, it’s surprising to see such low wages for education majors.  I suspect that part-time workers included in this and other categories deflate the average wage.

American Community Survey - Questions on the form and why we ask

Related:  Two recent reports on college majors, salaries, and unemployment rates

Questioning the value of a business major

The value of a business major is being questioned by employers, school administrators, and faculty members.

The biggest complaint: The undergraduate degrees focus too much on the nuts and bolts of finance and accounting and don’t develop enough critical thinking and problem-solving skills through long essays, in-class debates and other hallmarks of liberal-arts courses.

Companies say they need flexible thinkers with innovative ideas and a broad knowledge base derived from exposure to multiple disciplines. And while most recruiters don’t outright avoid business majors, companies in consulting, technology and even finance say they’re looking for candidates with a broader academic background.

Bring in the liberal arts disciplines and teach writing!

Schools are taking the hint. The business schools at George Washington University, Georgetown University, Santa Clara University and others are tweaking their undergraduate business curricula in an attempt to better integrate lessons on history, ethics and writing into courses about finance and marketing.

Along with more than 20 other U.S. and European business schools, those institutions met last month at George Washington for a conference to discuss ways to better integrate a liberal-arts education into the business curriculum. It was organized by the Aspen Institute, a nonprofit group with an arm that studies management education and society. Other participants included Franklin & Marshall College, Babson College and Esade, a business and law school at Barcelona’s Ramon Llull University.

Employers want these changes

Such changes should appease recruiters, who have been seeking well-rounded candidates from other disciplines, such as English, economics and engineering. Even financial companies say those students often have sharp critical-thinking skills and problem-solving techniques that business majors sometimes lack.

I’m reminded of this comment by an employer on why a solid liberal arts education is valuable in the business world.

The issue has nothing to do with distribution requirements, number of courses outside the major, etc. Put simply, when we hire an English major from Swarthmore or Williams we know he or she can write. When we hire an Engineering student (for a non-engineering job, by the way) from Cornell or Princeton or JHU we know they won’t need remedial math. When we hire an anthropology major from Chicago or Wellesley we know he or she won’t need help finding Malaysia on a map. We’ve hired kids with undergrad business degrees from a variety of schools (public and private) and found the talent pool decidedly mixed. Entrance requirements to the honors societies are weak; GPA’s are inflated by classes like “Organizational Leadership” or “Healthcare in Society”. And take a 90 page report and create an executive summary of three pages plus two appendices? Forget it.

We’d rather teach a Phi Beta Kappa in History from Amherst what Organizational Leadership is, than have to teach the Beta Alpha Psi from XYZ business program who Mao was and why you need to understand Communism in order to write a business plan for a product launch for our Beijing office.

Related:  Liberal arts skills are profitable for college graduates

No shame in living at home after college (usually)

Young adults living with their parents is on the rise, but it’s not always a bad thing.

“Few are proud to carry the stigma of a ‘boomerang kid’ — someone who moves back in with their parents after failing to make ends meet on their own. But the move makes a lot of financial sense, and could serve as a springboard that can get boomerang kids off to a flying start when they head back out into the cruel world.

Amanda Grad Meets World justifies boomeranging, describing how the plan is working for her. Thanks to help from her parents, she’s able to plot out her career without burying herself in debt.

‘Think about it — how many of you would rather be in debt up to your eyeballs instead of having the ability to put money away in the bank? How many of you would rather struggle, and I mean really struggle, during a Recession rather than taking it easy and trying to do things the smart way?

On the other hand, there are lessons to be learned  from early struggles that may prove valuable in the years ahead.  Let me put it this way.  Surviving hard times by depending on your own resources, both personal and financial, can help you gain the confidence that will buoy your chances of success during the next difficult episode in your life.  Because you know there will be more, right?

But it’s also true that  sometimes those rough early struggles can break your spirit, weaken your confidence, and set you back financially in a way that is difficult to recover from.

I am open to the possibility that my own kids will boomerang back home at some point, and I would be happy to help them if this happens.  However, I’ve seen unhappy, dysfunctional  cases of slacker kids postponing adulthood indefinitely while being enabled  by weak-willed parents.  I don’t want to fall into that trap.

Related articles

• Is it wrong to be your kid’s administrative assisstant? (costofcollege.wordpress.com)

‘Every 20-something I know is in therapy for something’

A 20-something college graduate looks around and finds her peers need counseling to help them handle their unemployment blues.

Being depressed prolongs the unemployment process, and I believe a lot of kids my age were/are depressed. One of the ways to pull out of depression is to be productive. If you need medical attention, get it. If you need therapy, get therapy. Every 20-something I know is in therapy for something. I take anti-depressants and anxiety medication. My anxiety medication is the butt of a lot of jokes, but it helps me. A part of being an adult is knowing when you need help and seeking it.

…
Is this hyperbole?  Let’s look at the numbers.

Young adults do seem to suffer from mental illness at higher rates, with the 18-25 age group the highest at almost 30%.  I could not find data for how many are undergoing therapy, but apparently there has been a shift from “talk therapy” to drugs as the dominant mode of treatment.

…
Who is taking medication?

This graph shows that members of my demographic group, females aged 40-59, use the most antidepressants.  This is consistent with my personal observation.  But other reasons may explain why the numbers are so high.

The survey captured how many patients are on antidepressants, not necessarily how many patients are being treated for depression with antidepressants. Because antidepressants are also prescribed for anxiety, neurological pain, fibromyalgia, sleep problems, and menopausal hot flashes, some of those reporting being on antidepressants may have been medicated for those reasons, not for depression, says Dr. John Messmer, associate professor of Family and Community Medicine at Penn State College of Medicine.

Well.  I’ll just reiterate the advice given above, applicable both to unemployed* 20-somethings and menopausal women.

If you need medical attention, get it. If you need therapy, get therapy.

* Unfortunately, with health insurance so closely tied to employment, paying for medical needs can be the biggest challenge for this group.

Liberal arts skills are profitable for college graduates

It turns out that employers are looking for the skills that liberal-arts studies instill — critical thinking, logical reasoning, clear writing.  College graduates who tested best at liberal-arts skills were “far more likely to be better off financially than those who scored lowest.  The problem is that many college graduates seem to lack these critical qualifications.

“Most senior managers are unimpressed with the entry-level job applicants they’re seeing, reports a new survey.

Note to recent college grads and the Class of 2012: You may not be as ready for the working world as you think you are. At least, that’s the opinion of about 500 senior managers and C-suite executives in a study by Global Strategy Group, on behalf of worldwide architectural firm Woods Bagot.

In all, a 65% majority of business leaders say young people applying for jobs at their companies right out of college are only ‘somewhat’ prepared for success in business, with 40% of C-suite executives saying they are ‘not prepared at all.’ Not only that, but even those who get hired anyway may not rise very far. Almost half (47%) of C-suite executives believe that fewer than one-quarter (21%) of new grads have the skills they’ll need to advance past entry-level jobs.

And what skills might those be? The most sought-after are problem-solving (49% ranked it No. 1), collaboration (43%), and critical thinking (36%). Also in demand is the ability to communicate clearly and persuasively in writing (31%). Technology and social media skills came in at rock bottom on the list, valued highly by only a tiny 5% minority of senior managers. The kicker: According to the poll, new grads fall far short of the mark in every one of these areas — except tech savvy, the least desired. …”

Get off the Internet and go read a book!
It might be that some of that time students spend waste creating snazzy PowerPoint presentations, socializing on Facebook, and editing Tumblr photos would be better spent in more reading, writing, and studying for classes.  According to data presented in Academically Adrift, students are spending less time on these academic pursuits.

Evidence that liberal arts skills pay off

A new survey should prompt renewed focus on a fundamental higher-education truth: The skills that liberal-arts studies instill — critical thinking, logical reasoning, clear writing — are crucial for success.

The Social Science Research Council study involved 925 college graduates who took the standardized Collegiate Learning Assessment as seniors. It found those who tested best at liberal-arts skills were “far more likely to be better off financially than those who scored lowest,” according to USA Today.

They were three times less likely to be jobless, half as likely to live with their parents and far more likely to avoid credit-card debt.

Related articles

• Making the Case for the Liberal Arts (thechoice.blogs.nytimes.com)
• A liberal arts education is good and central planning is bad (costofcollege.wordpress.com)