Editor’s note: This is a lightly edited transcript of the accompanying video from professor Peter St. Onge.
The share of young adults still living with their parents just hit its highest level since 1940.
Of course, in 1940, they lived at home because they were saving themselves for a good [husband or wife]. Today, they live at home because rat-infested, one-bedrooms cost 60 hours a week packing groceries.
It’s getting worse fast: At age 25, 14% of the Silent Generation lived at home. It was 15% for Boomers. It was 20% for Gen X, 27% for millennials, and now it’s 30% of Gen Z.
Taken all together, young adults living at home went from 7% in 1970 to 17% today and rising fast. Note that in 1970, most young adults living at home could afford to move out—60%. Today, that’s 18%. The other 82% are stuck.
This is interesting because adults forced to live with their parents is yet another data point in the most important economic question today: Are we still getting richer or have we finally killed the golden goose that delivered rising incomes generation after generation since 1789?
In other words, did socialism finally break the camel’s back?
On that metric, apparently, we’ve been going backwards since 1970.
So, what happened in 1970?
President Richard Nixon. Namely, the bipartisan Washington spending orgy—guns and butter they called it, for the welfare superstate paired with the Vietnam War.
That orgy led to a devaluation of the dollar; they’d spent too many into existence. Which led to Nixon temporarily ending gold convertibility on Aug. 15, 1971—yes, temporary in government does mean forever. At that point, it was off to the inflation races—and the debt races.
In recent videos, I’ve talked about how inflation and debt drive income inequality, pumping up the assets of the rich and leaving the plebs with nothing but inflation. One consequence, apparently, is millions who can’t afford to live on their own until they’re 35—an age where their parents already had three kids in a house they owned—while they can’t even afford to rent.
In case we wonder why nobody’s having kids, [economics writer Mike “Mish”] Shedlock dug into the numbers to see what’s driving it. For one thing, incomes are falling. Since 2000, the median real income for young adults has dropped by 10%, while rent has soared since COVID-19, up 25%, according to official numbers.
The upshot is, just 18% of young adults living at home can afford to move out. Even those with college degrees are forced to live at home—1 in 8, which is double the rate in 1970. This is partly because of six-figure student loans, but even without student-loan payments, the percent who can afford to rent
their own place is at a record low.
In short, the golden goose is on life support, whether or not you went to college.
As bad as central banking is for the country—the inflation, the boom-bust recessions, the bank bailouts—it’s catastrophic for the young, who are fleeced to pump the bags of elderly millionaires.
A few months ago, I quoted [NYU Stern School of Business marketing] professor Scott Galloway’s rant about how young voters are p—ed off about being poor and are ready to burn it all down. Unfortunately, few of them connect the dots that their tormentors are in Washington, and that they themselves have been the useful idiots who made it happen.
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