The economy: When the kids move back home

Our economy is being dragged down by “mooching Millennials,” said Nin-Hai Tseng in Fortune. The continued presence of so many 18- to 34-year-olds in their parents’ homes is a big reason the housing market isn’t recovering more quickly. In the past, the U.S. created 1.1 million new households each year; that number has now plunged to just 521,000. High unemployment is a factor, but while the jobs picture is improving, the stay-at-home trend for Millennials is only growing. Since 2007, the share of so-called boomerang kids has risen from 27.6 percent to more than 31 percent. Thanks to these young people, the U.S. has 2.4 million “missing households.Don’t blame the Millennials, said Sean McElwee in Salon.com. Blame our whole society. Unlike other countries, such as Britain—where “students don’t begin paying off their loans until they find stable employment, and the cost is in proportion to their earnings”—we stack the deck against our young people by saddling them with massive debt. Lowering student loans “would be a good first step” to relieving them, but it’s just a temporary solution. Education is an investment “in informed, intelligent, and active citizens.” Until we stop thinking about it as a commodity and start making real learning available to everyone, we’re doomed to churn out more generations of young Americans who can’t fulfill their potential.

In the meantime, parents have to learn how best to live with boomerang kids, said Mark Huffman in ConsumerAffairs.com. The most important thing is to set expectations and make it clear that the arrangement is temporary. Will your child pay rent or will you be providing financial support to your adult children, as almost half of parents do? Either way, it’s important to negotiate clear boundaries up front. “A frank and open discussion should be the first order of business.”

And don’t worry, said Donald Liebenson in MillionaireCorner.com. It won’t last forever. While most Millennials say they have no qualms about moving back home, they “aren’t planning to make the move permanent.” The average Millennial would be embarrassed to still be living at home at age 28, according to a recent survey, and just under half said they would want to be out on their own by 25. Just like everyone else, Millennials want decent jobs, and the benefits they see in living at home after college are mainly geared toward moving out. Eighty-one percent said it would allow them to save money, while almost half felt it would allow them to be pickier about job opportunities. So “hang in there, parents.”

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