The Economic State of Young America
May 6, 2008
By Tamara Draut

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Findings in the Report uncover:

-- Incomes have declined for most young workers: between 1975 and 2005, typical earnings for young men (25 to 34) with only a high school diploma fell by 29 percent while women's earnings declined by 10 percent. Typical earnings for young workers with some college fell 21 percent for men and 6 percent for women. Earnings for young workers with college degrees were flat among men, but rose 10 percent for women.

-- The rapid proliferation of debt: The average college graduate has nearly $20,000 in debt; average credit card debt has increased 47 percent between 1989 and 2004 for 25-to 34-year-olds and 11 percent for 18-to 24-year olds. Nearly one in five 18-to 24-year-olds is in "debt hardship," up from 12 percent in 1989.

-- Gaps in college access by race, income and gender: Compared to the previous generation, the percentage of young men with a bachelor's degree declined from 28 percent to 25 percent, while young women with a bachelor's degree increased from 20 percent to 32 percent. More young people in this generation are going to college, though gaps by income persist and gaps by race have actually widened.

 -- Higher rents absorb more of young workers' incomes: In 1980, the average gross rent payment absorbed 22 percent of a 25-to 34-year-old's income; in 2006, it was 25 percent. The youngest adults experienced greater increases, rising from 26 percent in 1980 to 32 percent in 2006. More young people are considered "housing burdened"--paying more than 30 percent of pre-tax income on rent: in 2005, 43 percent of 25-to 34-year-olds spent more than one-third of their pre-tax income on rent, up from 18 percent in 1970.

-- Gains in homeownership were uneven: Since 1980, the percentage of young households (25- to 34-years-old) who own their homes increased from 53 to 56 percent for whites; increased from 35 to 36 percent for Latinos and declined from 31 percent to 26 percent for African Americans.

-- Economic challenges facing young families: Although more than half of women with a child under age one are in the labor force (up from 31 percent in 1976), public policy supports for young families are still lacking. Only 39 percent of women received paid maternity leave. Child care, the most common arrangement used by working mothers, remains largely unsubsidized and costly. Full-time care for a toddler ranges from $3,794 to $10,920 annually, while full-time care for an infant rages from $4,388 to $14,647 annually. In every region of the country, child care for two children exceeds the median rent, and is as high or higher than the median monthly mortgage payment.