The Millennials’ greatest challenge may not be the lousy economy that kept them in mailroom jobs much longer than earlier generations or not even student loan debt, the penalty they pay for having the bad luck to be educated at a time when the costs of running colleges and universities sky rocketed.
Could it be that their biggest problem is their parents?
Sitting on the ladder you’re trying to climb
Fortified by the best medicine and empowered by the longest life spans in human history, Boomers are simply old and in the way. As employers ended forced retirement policies and Social Security began encouraging workers to wait until 80 for full benefits, millions of Boomers didn’t retire, blocking advancement for younger workers.
In 1993, only 29% of people age 65 were in the labor force; the vast majority were retired. By 2012 more than 41% of Boomers over 65 were still in the labor force, the highest since the early 1960s.
Millennials are launching their careers later and taking longer to get traction in careers that pay a living wage. It now takes the average young worker until age 30 to reach the middle of the wage distribution; young workers in 1980 reached the same point at age 26. Young adults’ labor force participation rate is down to its 1972 level, after 40 years of growth between 1950 and 1990.
Now the same thing is happening in housing.
Choosing remodels over downsizing
The first wave of 78 million baby boomers on the verge of retirement was supposed to be selling their paid off, hard to maintain family homes and downsizing or renting by now. Demographer Arthur C. Nelson, author of Reshaping Metropolitan America, predicted that so many Boomer homes would flood the market that next year “the Great Senior Sell-off” would begin—a fire sale of properties so massive it will create America’s next housing crisis.
It ain’t happening.
Instead, a huge number of Boomers are “aging in place,” contributing to the inventory drought that is stunting the housing recovery, by keeping their homes off the market and making it harder for move up buyers to buy and sell the starter homes that are so scarce in hotter markets.
For as long as possible
A new study released last month by the Bipartisan Policy Center found that 38 percent of Boomers aren’t planning on moving at all. As for downsizing, the BPC reported that between 2011 and 2013, the average number of rooms per home increased, both for all Boomers and for younger Boomers born between 1956 and 1965.
The findings echo a 2010 AARP survey of individuals aged 45 and above, 73 percent of respondents strongly agreed with the statement, “What I’d really like to do is stay in my current residence for as long as possible.”
Rather than stimulating home sales, the home-bound Boomers are creating a miniboom for remodelers to retrofit their homes for senior living.
Old and in the way, that’s what I heard them say
They used to heed the words he said, but that was yesterday
Gold will turn to gray and youth will fade away
They’ll never care about you, call you old and in the way
– “Old and in the Way” words and music by David Grisman, October 1973
Patience is a virtue
Time, of course, will bring an end to the Boomers. The torch will be passed in the housing markets as well as the workplaces. It will just take a little longer than planned.