Young, Underemployed and Optimistic

Executive Summary

This report is based on findings from a Pew Research Center survey conducted Dec. 6-19, 2011, among 2,048 adults nationwide, including 808 young adults (ages 18 to 34). The report also draws on data from the U.S. Bureau of Labor Statistics.

Here is a summary of the key findings:

Young adults hit hard by the recession. A plurality of the public (41%) believes young adults, rather than middle-aged or older adults, are having the toughest time in today’s economy. An analysis of government economic data suggests that this perception is correct. The recent indicators on the nation’s labor market show a decline in the unemployment rate. Nonetheless, since 2010, the share of young adults ages 18 to 24 currently employed (54%) has been its lowest since the government began collecting these data in 1948. And the gap in employment between the young and all working-age adults—roughly 15 percentage points—is the widest in recorded history.¹ In addition, young adults employed full time have experienced a greater drop in weekly earnings (down 6%) than any other age group over the past four years.

Public says today’s young adults have it harder than their parents did. Large majorities of the public say it’s harder for young adults to reach many of the basic financial goals their parents may have taken for granted. More than eight-in-ten (82%) say finding a job is harder for young adults today than it was for their parents’ generation. And at least seven-in-ten say it’s harder now to save for the future (75%), pay for college (71%) or buy a home (69%).

Tough economic times altering young adults’ daily lives, long-term plans. While negative trends in the labor market have been felt most acutely by the youngest workers, many adults in their late 20s and early 30s have also felt the impact of the weak economy. Among all 18- to 34-year-olds, fully half (49%) say they have taken a job they didn’t want just to pay the bills, with 24% saying they have taken an unpaid job to gain work experience. And more than one-third (35%) say that, as a result of the poor economy, they have gone back to school. Their personal lives have also been affected: 31% have postponed either getting married or having a baby (22% say they have postponed having a baby and 20% have put off getting married). One-in-four (24%) say they have moved back in with their parents after living on their own.

Adulthood begins later than it used to. In a 1993 Newsweek poll, 80% of parents with young children said children should be financially independent from their parents by the age of 22. Today, only 67% of parents hold that view. Three-in-ten (31%) of today’s parents say children shouldn’t have to be on their own financially until age 25 or later.

For young adults, bad times don’t trump optimism. Among those ages 18 to 34, nearly nine-in-ten (88%) say they either have or earn enough money now or expect they will in the future. Only 9% say they don’t think they will ever have enough to live the life they want. Adults ages 35 and older are much less optimistic—28% say they don’t anticipate making enough money in the future.² While young people are less likely now than they were before the recession to say they currently have enough income, their level of optimism is undiminished from where it was in 2004.

Older adults have maintained their standard of living. If any age group has weathered the economic storm better than others, it has been adults ages 65 and older. In a 2004 Pew Research survey, similar shares of young adults (50%), middle-aged adults (52%) and older adults (50%) rated their personal financial situation “excellent” or “good.” By 2011, a large gap had opened up between older adults and everyone else: 54% of older adults gave their personal financial situation a high rating, compared with roughly one-third of younger and middle-aged adults.

Among the employed, job satisfaction has remained steady… For those young adults who are employed, most are relatively satisfied with their job. Job satisfaction among young workers is roughly the same as it was before the recession and remains somewhat lower than the satisfaction rate among workers ages 35 and older.

…But young workers feel more vulnerable than they used to. In a 1998 survey, 65% of 18- to 34-year-olds working full time or part time said they were extremely or very confident that they could find another job if they lost or left their current job.³ The share highly confident fell dramatically to 25% in 2009. It has rebounded somewhat since then (to 43% in the current survey) but is still nowhere near the 1998 level.

Few young workers see their current job as a “career.” Among all 18- to 34-year-olds, only 30% consider their current job a career. This compares with 52% among workers ages 35 and older. However, the survey suggests that young adults quickly begin to transition from job to career. Among the youngest workers, those ages 18 to 24, only 11% say their job is a career. Among workers ages 25 to 29, the share is three times that (34%). And among those ages 30 to 34, fully half (49%) say they view their job as a career.

Most young workers say they don’t have the education and training to get ahead. Among 18- to 34-year-olds who are employed, less than half (46%) say they have the education and training necessary to get ahead in their job or career. Among those who are not working, only 27% say they are adequately prepared for the kind of job they want. Having a college degree makes a big difference on this question: 69% of young college graduates who are working say they have the education and training they need to get ahead. This compares with only 39% of those who do not have a degree and are not enrolled in college.

College enrollment rates are tied to employment declines among the young. A greater share of young adults are enrolled in high school or college today than at any time in recorded history. This increase in enrollment is one reason that fewer young adults are on the job today, but it doesn’t account for all the job losses experienced by this age group in recent years. The Great Recession broadly reduced the employment rate of young adults regardless of whether they were in school. Among those enrolled in school, the employment rate fell from 47.6% in 2007 to 40.7% in 2011. And among those not enrolled in school, it fell from 73.2% to 65.0% over that same period.