With an unemployment rate of 15.6 percent (more than double the national unemployment rate),Â Americans 25 or younger are experiencing a turbulent start to their careers despite the rising number of young Americans enrolled in higher education institutions. And that college degree has a hefty price tag, which has continually grown overÂ the past three decades by more than 1,000 percent.
It doesn’t help either thatÂ state governments have cut funding for colleges and universities and federal student aid has lost much of its buying power.
Although they have a diploma (or two) in hand, it’s not uncommon for these Millennials to struggle with unemployment post-grad, and for those who cannot find a job for six months will earn about $22,000 less over the next decade.
Even if they do have a job, the pay is just as important. MillennialsÂ working full time at the federal minimum wageÂ onlyÂ earns $15,000 per year, which is well below the $19,530 federal poverty level for a family of three, and half of workers under the age of 25 are parents. That math speaks for itself.
This isn’t just disposable income either because the student loan bills start arriving shortly after graduation whether you have a job or not. In all, Americans have $1.2 trillion in student-loan debtâ€”the second-largest form of consumer debt behind home mortgagesâ€”the average student-loan borrower owes a balance of $25,000.
With looming debt, college looks less attractive to Millennials who may then opt-out of higher education to avoid debt. However, if that trend catches on with Millennials, research indicates thatÂ theÂ U.S. will be short 5 million workers with postsecondary education comeÂ 2020, which hinders the country’s workforce.
Today, less than half of workers age of 35 or younger have a retirement plan via their employer which pales in comparison to theÂ 53 percent of workers 35 or older who do (the median retirement account balance for Millennials ages 25 to 34 is $0.)
To address the growing number of Millennials forced to move back into their high school bedrooms after graduating college with no job providing an income, the Center for American Progress released a new report with six key fixes for the economy to ensure young Americans a stable economic futureâ€”more specifically, a middle class life.
It finds that this problem facing Millennials is due to “the past few decadesâ€™ experiment in supply-sideâ€”or what has been termed â€œtrickle-downâ€ economics,” which it deems a failure.
Here are the six fixes the report says will promote an economically healthy middle class for Millennials:
1. Completely implement the Edward M. Kennedy Serve America Act, which would authorizeÂ 250,000 AmeriCorps positions by 2017; therefore, providing work for the record 528,000 applications for the program in 2011 that only resulted in 80,000 employed positions. Additionally, CongressÂ create a $12.5 billion Pathways Back to Work Fund by subsidizing summer and year-round jobs for hundreds of thousands of Millennials.
2. Raise the minimum wage, guarantee workers the right to paid sick days, pass comprehensive labor-law reform, and enact Social Security Cares (a national paid family and medical leave program).
3. Increase Pell Grants viaÂ Congress providing an additional $20 billion for Pell Grants between 2018 and 2022 to boost the maximum value of the grants to $6,990 by 2022.
4.Â Congress should allow student borrowers to refinance their student loans, which will allow struggling borrowers to lower their monthly payments, freeing up income and boosting the overall economy. Additionally, make income-based repayment the default repayment option.
5.Â Congress should create a $2 billion program to support an additional 1 million apprenticeships annually.
6.Â Create a SAFE Retirement Plan (think a hybrid between a 401(k) and a pension), open up the federal Thrift Savings Plan to the public, andÂ create a Universal Savings Credit to replace all current employer and employee deductions to retirement, health, and education savings accounts, which would correct the upside-down nature of current incentives.