Are millennials being priced out of California?

Are millennials being priced out of California?

California rain, cagle, Dec. 15, 2014Are millennials being priced out of California?

A recent report by the U.S. Census Bureau analyzing statistics from the latest American Community Survey showed the Millennial Generation is struggling to find full-time employment, obtain affordable housing and reach financial independence. The problems are particularly bad here in California.

Young Californians are not only worse off than their parents’ generation, but they’re doing worse than their counterparts in the rest of the country.

“Many of the differences between generations examined within these latest data reflect long-term demographic and societal changes,” said Jonathan Vespa, a Census Bureau demographer. “Three decades of decennial census statistics combined with the latest American Community Survey statistics give us a unique view of how — and where — our nation is changing.”

Better educated but worse job climate for young Californians

Among the five years of data, the most striking statistics are in the area of employment. Despite being better educated, young Californians are earning less money than their parents and are less likely to have full-time employment.

In 1980, 71.1 percent of Californians aged 18 to 34 were employed — better than the national average of 69.3 percent. Today, California’s employment rate of young adults is lower than the national average at 62.1 percent.

Tom Allison and Konrad Mugglestone of Young Invincibles write, “The great recession hit young workers hard, leaving roughly 5 million young adults unemployed five years after the downturn officially ended.

Young Californians earning less today

Of those young people working full-time, wages are down in 2013 inflation-adjusted dollars. Thirty-four years ago, the average Californian earned $36,961 dollars per year. That median wage has dropped to $35,734 per year for the average Californians aged 18 to 34.

As Slate recently wrote of U.S. Census data analyzed by the Young Invincibles, “For Americans between the ages of 25 and 34, annual income earned from wages has fallen in four of the top five biggest employment sectors — retail (down 9.9 percent), the leisure and hospitality business (down 14.65 percent), manufacturing (down 2.87 percent), and professional and business services (down 4.28 percent).” According to the study, the one exception is health care, which has remained nearly unchanged.

While Californians earn more than the national average, much of the wealth has been concentrated in the Bay Area, which skews California’s statewide figures.

In San Francisco County, the average full-time worker, between the ages of 18 and 34, earned a median annual salary of $59,580 — more than double the average wages in rural Madera and Modoc counties. The average young worker in the tech-dominant San Jose metro region earns $51,149 per year — 52 percent more than their counterparts in the Los Angeles metro area.

Millennials can expect lower wages  throughout  their working lives. Lisa Kahn, a labor economist at Yale University, found that college graduates that enter a weak economy suffer lower wages throughout their entire careers.

“I find large, negative wage effects of graduating in a worse economy which persist for the entire period studied. I also find that cohorts who graduate in worse national economies are in lower-level occupations, have slightly higher tenure and higher educational attainment, while labor supply is unaffected. Taken as a whole, the results suggest that the labor market consequences of graduating from college in a bad economy are large, negative and persistent.”

Price of housing top in nation

While wages have declined for millennials, the cost of housing has continued to increase.

California is home to three of the most expensive major cities for housing in the country: Los Angeles, San Diego and San Francisco. The most expensive city in the country, San Francisco, has an average median home price of $744,400 and requires an annual salary of $145,500 to pay the nearly $3,400 mortgage, according to Business Insider. That’s double Seattle and Chicago and more than three times the cost of Houston, Dallas and San Antonio.

The city of San Jose estimates the average apartment in San Jose rents for $2,230 — up by 49 percent in the past four years.

“Housing costs in the peninsula, from San Francisco to San Jose, have doubled in the last five years,” writes Kerry Cavanaugh of the Los Angeles Times. “It’s even worse in San Francisco, which recently surpassed New York City as the most expensive rental market in the nation.”

More Californians live with Mom and Dad

Unsurprisingly, due to these increased housing costs, millennials in California are more likely to live with their parents than those in the rest of the country or previous generations.

According to the U.S. Census Bureau report, 34.5 percent of Californians aged 18 to 34 are living with a parent who is the householder. That represents a dramatic shift from 1980, when just 1 in 5 young Californians lived with their parents. Then, fewer Californians lived with their parents in comparison to the rest of the country. Now, more Californians live at home than the national average.

“Housing is typically the largest share of household expenditures and raising its price reduces discretionary incomes, while increasing poverty,” writes Wendell Cox, principal of Demographia, an international public policy and demographics firm.

Poverty, too, has increased among young Californians. Nearly one in five Californians aged 18 to 35 lives below the poverty line, an increase from 1980.

“Let’s say you’re a kid out of college and your first job, you’re getting paid $40,000 a year,” Richard Green, director of the USC Lusk Center for Real Estate, told the Los Angeles Times. “You want to live in a safe neighborhood in Los Angeles, with decent access to jobs, transit, et cetera. You’re looking at $1,400 to $1,500 a month in rent. So that means you’re paying $18,000 a year out of your $40,000 just in rent.”

The U.S. Census Bureau analyzed five years of demographic, economic and housing data collected between 2009 and 2013.

23 comments

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  1. Ronald Stein
    Ronald Stein 22 December, 2014, 10:15

    Government actions resulting in over regulations on businesses, over taxation and uncontrollable fees are contributing to the middle class becoming an endangered species as the inequality has deepened. The results are that consumers are paying for over regulations to businesses. Those behind the over regulations, over taxation, and uncontrollable “fees” on businesses are mostly the highly compensated, and most with sweet defined retirement benefit packages waiting for them upon retirement, i.e., those that CAN afford the higher costs that trickle down to all citizens for products and services. When the high end folks behind the over regulations retire, they move to another state with their sweet defined benefit packages that are funded with our money.

    Reply this comment
  2. Dork
    Dork 22 December, 2014, 12:22

    I wouldn’t worry too much about SoCal, I drive all over SoCal daily(service business) and I have noticed that 2 giant companies have been snapping up commercial real estate everywhere I go, they have taken over strip malls all throughout the county as well as commercial and industrial parks. I see their signs everywhere, pretty soon they should start hiring people, I don’t know what type of businesses they are, but they are HUGE and Taking Over more Real Estate than any company I have ever seen. they are named “For Lease” and “Space Available”

    Reply this comment
    • eck
      eck 22 December, 2014, 19:30

      Hey Dork, no fair!! That was my quip 20+ years ago. Seriously, the more things change, the more they stay the same, no?

      Reply this comment
  3. bob
    bob 22 December, 2014, 12:45

    Millenials priced out of Colliefornia (as Ahnode calls it)?

    Now how could that happen in this progressive paradise??? Douglass? Sawhorse??? Skippy??? Anyone???

    Reply this comment
  4. desmond
    desmond 22 December, 2014, 18:14

    I am a millennial. Fortunately, I am not priced out, but I could move and make pretty much the same money elsewhere. Other people have to do it out of necessity. The other outlook is much higher taxes to pay for all the poverty. I think the state will have between 50 and 60 percent poverty rate by 2050 in Cal. The prison population will be enormous. Sounds like Hunger Games. Just think there will be close to 40 million collecting aid to live. Since so many here worship the climate change settled science, throw that in, no water, not enough food…hey, maybe that is why the old tarts don t care. They will be long gone when the fruits of their ignorance and sloth hit the fan.

    Reply this comment
    • Bill Gore
      Bill Gore 22 December, 2014, 18:26

      You got it right about the old farts. You guys are getting royally SCREWED by your parents generation, the baby boomers, who basically have never given a rat’s ass about anything except their own asses. They are the generation of uber-entitlement, and then burn it all down baby, just ’cause they can. Environmental issues, immigration, you name it, they’ve done things to this country their parents never would have dreamed of….

      Reply this comment
      • SeeSaw
        SeeSaw 23 December, 2014, 16:29

        Talk is cheap and that’s all you have–jealous fool! My child and spouse are baby boomers–they are successful professionals in the private sector. They have raised beautiful children–the millennial generation. These millennials are all in good colleges–all paid for by mom and dad. Why don’t you shut your mouth about people you don’t know–focus on your own circle and see what you can do there to help them make a better world!

        Reply this comment
    • bob
      bob 22 December, 2014, 19:13

      hey, maybe that is why the old tarts don t care. They will be long gone when the fruits of their ignorance and sloth hit the fan.

      Except for the trough feeders pulling down the big pensions and health bennies. They will forever off the taxpayers.

      Reply this comment
    • NTHEOC
      NTHEOC 22 December, 2014, 21:35

      Desmond says,
      The other outlook is much higher taxes to pay for all the poverty. I think the state will have between 50 and 60 percent poverty rate by 2050
      ———————————————————————
      The reorganization of all economic life under the democratic control of the working class, to serve social needs, not private profit will be the answer!!! Hopefully we will be there by 2050!!!!!

      Reply this comment
  5. Queeg
    Queeg 22 December, 2014, 19:15

    Wrong Billy Boo Boo

    The high tech imperialists slave domestice and service workers domestically and slave foreign workers without mercy.

    The stinking millenieals love out sourcing and a throw away economy built on junk trinkets from third world slaves.

    Then the globalists gobbled up all the rental housing, big box stores and exploitive service businesses.

    You are worked And don’t know it. As long as you have Atlantic salmon from Peru and “authentic” fresh pollock, a product of China you’re happy.

    Reply this comment
  6. NTHEOC
    NTHEOC 22 December, 2014, 21:27

    Corporate greed and the raping of the working people are the cause of most problems. Yet, go to any new housing development around and you will see them into the 3rd phase and being sold out. So it’s hard to take any of this DOOMER data seriously. The best case scenario is for every work place to UNIONIZE!!! Or have the gov’t step in and oversee corporate hogs……..

    Reply this comment
  7. Ulysses Uhaul
    Ulysses Uhaul 23 December, 2014, 00:55

    Homes in Temecula/Murietta are selling briskly and prices are moving up due to low inventory of well situated and maintained homes. Amnesty will drive home prices up further as legtimacy makes for more demand as shadow immigrants get better careers going.

    Buy real estate and stop whining…..this may be your last chance to finally prosper!

    Reply this comment
  8. Ted
    Ted 23 December, 2014, 13:32

    We’re doomed!
    The low gas prices are BAD news
    The good jobs news is fake
    The positive consumer demand and seasonal shopping victories hurt us
    The gov still has the Roswell Aliens ™
    The WTC was an inside job.

    Happy Solstice Doomera!

    The Ted System ™

    Reply this comment
  9. desmond
    desmond 23 December, 2014, 16:16

    You don t care about the points raised in the article. That is why you are a despised member of the most hated generation. You are just an old fart with an attitude. What do you think of that as a movie title, “Old Fart With an Attitude”?

    Reply this comment
    • SeeSaw
      SeeSaw 23 December, 2014, 19:43

      You are a young know-it-all! And, you have absolutely no respect for elderly people. Your poor grandparents!

      Reply this comment
      • bob
        bob 24 December, 2014, 08:09

        You be nice to Desmond!

        You need him to pay your pension!

        Reply this comment
        • SeeSaw
          SeeSaw 24 December, 2014, 09:02

          If anything happened to Desmond, my pension would not miss a beat–my pension would still exist if Desmond had never been born! He is an insolent brat now–I can only imagine what his mother has gone through!

          Reply this comment
          • bob
            bob 24 December, 2014, 09:20

            I’m sure Desmond is a hard working young man.

            You shouuld give him some credit. It’s very difficult for a millenial to get a job these days in the progressive paradise known as Colliefornia (as Ahnode calls it), let alone a job that can support himself and his family, let alone a job that can support you trough feeders.

        • SeeSaw
          SeeSaw 24 December, 2014, 10:09

          You’re sure? How do you know that? Does his insolence on these boards tell you that? I empathise with people working hard and supporting families. My spouse and I did that for many years. And, I don’t need people like you and people like Desmond referring to me as a trough feeder! You need to get a life!

          Reply this comment
          • bob
            bob 24 December, 2014, 12:12

            referring to me as a trough feeder!

            Dear Sawhorse, please don’t be offended by the term trough feeder.

            After all, some of the most successful creatures in the animal kingdom are trough feeders.

            You need to get a life!

            OK, I will try to find Chris Elliott.

  10. Ulysses Uhaul
    Ulysses Uhaul 23 December, 2014, 16:57

    Lighten up Desi. We may drive you more insane. Teddy is correct. Your always wrong. So there-

    Reply this comment
  11. desmond
    desmond 24 December, 2014, 02:38

    Two more old farts with attitudes. That could be the sequel.

    Reply this comment

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