Finally, someone else appreciates the financial straits of our generation:
The economic security of younger Americans is eroding at an alarming pace as a result of slow wage growth, underemployment, rising costs and mounting student loan and credit card debt, according to a new report, "Generation Broke: The Growth of Debt Among Younger Americans," released today from Demos, a non-partisan, public policy group based in New York City.
Among the report's findings:
Average credit card debt among young adults (aged 25-34) increased 55% between 1992 and 2001, to $4,088.
The average indebted young-adult household (aged 25-34) now spends almost a quarter of every dollar earned on debt payments.
Among the two-thirds of young-adult households (aged 25-34) with incomes below $50,000, nearly one in five with credit card debt is in debt hardship -- spending more than 40% of their income servicing debt, including mortgages and student loans.
Americans aged 25-34 have the second highest rate of bankruptcy (just after those aged 35 to 44).
The bankruptcy rate among 25-34 year olds increased between 1991 and 2001, indicating that Gen-Xers were more likely to file bankruptcy than were young Baby Boomers at the same age.
The youngest adult households (aged 18-24) with debt spend nearly 30 cents of every dollar earned servicing debt, twice the amount spent on average in 1992.
Credit card debt among the youngest adults (aged 18-24) skyrocketed 104% during this same period to $2,985.
Growing numbers of Gen-Xers carry a balance. 71% of credit cardholders aged 25-34 revolve their balances, compared to 55% of all cardholders.
Generation-Y may be the most at risk. Three out of four 18-24 year-olds carry a credit card balance, due largely to unregulated, aggressive marketing by card issuers on campuses. Between 1990 and 1995, one survey found credit debt had shot up 134%, from $900 to $2,100. By 2001, a Nellie Mae study found college seniors graduated with an average of $3,262 in credit card debt.
More young Americans now face debt hardship. 13% of those aged 25-34 are in debt hardship (using 40% or more of their income to service debt), up from less than 7% in 1992.
Student loan balances have doubled in the course of a decade. The average 2002 graduate carried $18,900 versus $9000 for 1992 graduates.
Young adults pay a price for being uninsured. One in three young adults lacks health insurance, compared to one in six Americans overall.
Unemployment/underemployment. Unemployment rates have risen faster for younger workers than other demographics: 1 in 10 was unemployed in 2003.
College degrees also offer less job security than before: as of March 2004 there were 1.17 million unemployed college graduates, surpassing the number of high school dropouts.
Link to press release. It's good to know I'm not alone. We're never ever ever going to get to retire, are we?
Posted by sarah at December 6, 2004 11:58 AM | TrackBack