(SPONSORED) — Millennials are choosing to stray away from the traditional workforce. Director of Data-Driven Economic Strategies (DDES) Tatiana Bailey explains the impact on homeownership from this decline in labor participation.
Bailey explains that DDES did a calculation. If labor participation went back to historical rates for men of about 75% instead of 68% today, the U.S. would gain 9.3 million additional workers.
The U.S. has 10.3 million job openings today, so Bailey said if the male labor participation rate went back to those historic levels, and those men had the right skill sets, just about every job would be filled. However, Bailey explains that millennials are not engaging with the traditional workforce as previous generations did.
One of the reasons Bailey gives is the perception of millennials that wealth accumulation like homeownership is out of reach. One of the reasons is the low supply of housing; not enough homes were being built during and after the Great Recession.
Student loans are another issue impacting millennials, the average student loan is now at $37,000 and even higher for minority groups. As a result, said Bailey, fewer men are enrolling in college creating a “vicious” cycle.
Bailey talks about how with the median local home price of $453,000 a buyer needs $91,000 to make the 20% down payment. Bailey says there is a correlation between homeownership and the incentive to work.