COMMENTARY | I’m a lucky Millenial. As a member of the high school class of 2003, I finished a double-major in college in four years and decided to go to grad school and earn a Master’s degree rather than hitting the job market. Wrong move. Two years later, in May 2009, the economy was as bad as could be. Stuck in a bad situation, I meekly returned to the classroom to seek a professional certification that might land me a paying gig…since my MPA wasn’t worth the paper it was printed on. I was lucky that Mom and Dad had my back and offered financial support.
I went back to school, got certified as a secondary teacher, and got a job at a high school. A year later, now married, I was buying a house. It was a tremendous deal in an area where real estate prices rival those of Manhattan and Beverly Hills – a new starter home in a quiet subdivision. Though I had enough for a minimum down payment, my parents again stepped in and offered some financial help, allowing me to put enough down to avoid a crushing mortgage payment.
Of course, rising property values since then have made my mortgage payment crushing. The horrendous cost of living is chipping away at my budget. Can my wife and I have a baby? If an unexpected emergency happens will we be fiscally wiped out?
According to TIME, I’m hardly alone among Millenials in my financial fears. A new Trulia survey reveals that half of Millenials plan to ask family members for financial help in buying a home. And for more than half of new homebuyers, student loans were blamed for their delay in purchasing. While the news came with plenty of anti-Millenial snark, including sneering at young folks for not wanting to give up their car or smartphone (notice how they never mock the retirees for wanting to remain mobile and digitally connected despite their financial woes), it points to a worrisome future for all: What will happen when Millenials are priced out of the market?
Bad stuff, that’s what.
Real wages are eroding, young people often start at the bottom of the pay scale, and costs for real estate are rising. We twentysomethings are a generation of part-timers and freelancers living among McMansions – how can we possibly pay to live? Even with my teaching job, working summer school, and freelance writing, including a hopeful deal on a novel, I worry about making ends meet. And I’m far from the stereotypical clueless Millenial consumer – I don’t have cable, I drive an economy car, and my last overnight family vacation was almost two years ago and lasted for two days.
We need to find a way to bolster the real income of young professionals to keep the economy afloat. We want to consume, to stimulate the economy. We want to buy houses, have children, and live the American dream. Unfortunately, hiring and compensation trends are working against us. Which is why a human capital market is a great idea.
Why not allow those with money to give young people money now as an investment in exchange for a cut of their earnings later on? For example, as a young teacher with considerable content generation skills, I am confident that I will climb up the educator, and later administrator, pay grades at a decent pace. But what if I need that higher income now, when I can put it to better use? Why not allow an investor to purchase a small percentage of my future lucrative earnings for a lump sum today, which would allow me to pay down my mortgage?
Think about it.