By George Anderson
"You load sixteen tons . . . what do you get?
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store"
- Merle Travis
Today's twenty and thirty-somethings may no longer be working for the company store but they are certainly having their styles crimped by high levels of debt as many struggle to pay back student loans and credit card purchases while keeping up with the high cost of housing and energy.
The result, concludes a MSNBC report, is that "a growing number of young adults are reassessing their lifestyles and mimicking the frugal habits of their Depression-era grandparents."
According to the Federal Reserve Bank, between 1983 and 2001, credit card debt for consumers in the 25 to 34-year-old age group grew from $3,989 to $12,000.
For an economy that has been fueled by consumer spending, the high debt levels and resulting frugality of consumers, especially those entering the full-time job market, is a major concern.
"It used to be that spending more than 30 percent of your income on housing costs was a major cost burden, but many young people are spending 40, even 50 percent," said Bruce Nissen, director of research at Florida International University's Center for Labor Research and Studies. "Housing price and rents both have tripled, way faster than income."
Another concern is that many enter the job market already in debt as they face the prospect of paying off student loans. Many entry level and poor paying jobs today require a college education. The industries creating the greatest number of jobs, foodservice and retail, are notoriously low paying.
"The job market is expanding but 80 percent of these new jobs don't require a college degree. So your choices are working at either Burger King or Wal-Mart where, obviously, the pay is not good," said Mr. Nissen.
Tamara Draut, author of Strapped: Why America's 20- and 30- Somethings Can't Get Ahead, told MSNBC, "It's much more difficult for this generation to work or educate their way into the middle class," she said. "They'll probably never match their parents' standard of living because of big loans, low income growth and a cost of housing that's much more expensive than for a generation ago."
Moderator's Comment: How will the financial challenges faced by workers in their thirties and younger impact retailing in the years ahead?
Tamara Draut told MSNBC, "We're the first Americans to start our lives with five-figure debt and start our careers in a Darwinian new economy. Congress has decimated college financial aid and let the minimum wage fall to historic lows. If we continue to tune out and check out of the political process, our future will be all but stolen from us." - George Anderson - Moderator