I didn’t think the OP is focused on the “average” 25-year-old. Perhaps the average 25-year-old is still able to afford his or her own apartment, just like the average 25-year-old in the 00s, the 90s, and the 80s did.
It may be that in the 80s and 90s, 25-year-olds making income in the bottom quartiles valued independence more than their counterparts of today. That is one hypothesis. Or it could be that the 25-year-olds in the “below-average” group today are worse off than their yesteryear counterparts because not only do they have sucky jobs, but they have tons of student debt on top of that.
Another complicating factor: a lot of people’s credit sucks right now. When I got my first apartment at 20, my mother cosigned the lease. Perhaps if I had turned 20 during the Great Recession, my mother’s credit score wouldn’t have allowed this.
Yet another complicating factor: transportation. There isn’t as much pressure for teens to learn how to drive as there was back in the days of plentiful, cheap automobiles (and insurance…and gas). If you’re 20-something and you don’t know how to drive yet, it is very possible that you are relying on others to lug you around. Now to be honest, this strikes me as very handicapping and self-limiting. But if you find yourself in this unfortunate situation, then it actually makes sense to live at home until you learn how to drive and obtain a car, at least. In the meantime, you can catch rides with the parents or take public transportation. Personally, I wouldn’t make this choice for myself, but I can see how it could work out like this.
Urbanredneck could tell us better exactly what he’s focused on but what he said is:
[QUOTE= Urbanredneck]
An article today said it is more common for 25 to be the age when most young adults can be economically free from their parents.
[/QUOTE]
When I hear words like “common” and “most” I immediately think average. Not necessarily the statistical median adult or a strict arithmetic mean, but common sense average. In fact, Urbanredneck when on in his next statement to stipulate graduating college, which is well above average. It seems tedious to point out that a few outliers have $100,000 in student loans or have minimum wage jobs to go with their doctorates. Of course those unfortunate outliers may need to take extreme measures.
It’s still relevant to point out that the average college starting salary is much higher than people seem to think, or that the average debt burden is far lower.
I used my camping gear for the first 2 months I lived in my first apartment after school. Slept in my sleeping bag on a foam mattress. Then I “splurged” on a bed from a Sears outlet that sold surplus furniture. I used a card table for my dining table for the first 3 years. Didn’t have my own apartment for about 4 years (that is, I had roommates.) Man, it was nice to ditch the roommates!!
If you want to live on your own, you’ll find a way.
The 22 year old has almost nothing to lose. I mean, logically - as a 22 year old your options are to live at home with your parents, not being an independent adult, or get a cheap apartment with some friends. Doesn’t it stand to reason that if you lose your job and can’t make rent, moving back in with your parents remains an option?
If you’re 55 and lose a job and your house is foreclosed on you’re in actual trouble, unless you want to get a cot at your parent’s assisted living facility. By that point in your life you don’t have convenient family resources to help you through all the difficulties.
Sometime between 22 and 55 you need to transition from an “adult” who pays rent but still has a substantial safety net and an adult with a spouse and maybe kids and eventually parents whose own independence is declining. Screwing around at home into your 20s doesn’t seem conducive to that transition.
Are you joking? Like, this is not common knowledge that “salary” does not include things like the employer cost of health insurance, retirement plans, transportation subsidies, free Coke at the vending machine, and whatever else they may offer that does not appear in one’s paycheck?
I know a lot of 20-somethings who are coping with debt and not living with their parents. They have good jobs, but they aren’t investment bankers.
If you have roommates and some get-up-and-go, you can make it. Seriously.
Also, for anyone in college, if you major in art history, you should double-major in something you can parlay into a job. Don’t bitch to me if you can’t get a job and you have $100K in debts for a fucking art history degree with a minor in modern dance.
Edit: I moved out at 22. I got a good job in the middle of a recession. I had a roomie. I had leftover furniture from my family and took my bedroom set and papasan chair from home. My grandmother had bought me a lovely set of stoneware dishes for Christmas the year before. And my mom bought me a couch at an outlet place. It was ugly but it worked.
I didn’t have a lot of extra cash, but I managed to pay my rent and my car note. I stumbled (I still can’t balance a checkbook), but everyone does. Better to learn when you’re 20-something than when you’re 45 and have kids depending on you.
And I had to move home when I was 36 – I’d lost my job because of illness, and really couldn’t take care of myself at all well. Started over at 38.
Things happen; you have to learn how to go with it. But you’ll never learn if you don’t take that first step.
I assure you I am not joking. The NACE survey lacks detail and clarity. All I am doing is asking for clarity. You are not aswering my questions, nor are you providing any cites as I asked. In place of this all I see is snark. An example of what I consider to be clearly defined salary statistics is what the US Census Bureau provides:
Please lets not derail the thread any further if you have nothing of substance to add to this. If you feel like getting the last word in without providing anything meaningful to counter what I have presented, be my guest - I’m not interested in responding to any more of your shallow uncited commentary and would find it rude to engage in this thread derailment further.
If you look at things from another perspective, many middle class fiftysomethings (the recent college grads’parents’ age) were severely hit by the recent recession. Many are still underemployed and struggling financially to hold onto their homes and make ends meet. Their kids who have recently graduated from college with debt the equivalent of a car payment each month and will likely enter the workforce not making the $45K claimed upthread can, nonetheless help out with household expenses for less money than the cost of renting an apartment, even with roommates. Mutually beneficial to both generations.
My guess is that those “starting salary” figures include such things as benefits, relocation, signing bonuses–anything they can throw in there. Colleges have an incentive to get those figures up as high as possible. When I graduated my MBA program back in 2000, that was certainly the case. The average that was reported for my school looked a lot bigger than what I was getting, and I had a rough feel for what kinds of actual “salaries” people were being offered.
I don’t know how good the money really is out there. I had a lazy but intelligent girlfriend who graduated in 2010 (17 years younger than I), and she had no job offers or even a hint of interest, and she ended up working for Target. That’s another thing: these types of figures are for kids who have job offers upon graduation. A lot will continue searching beyond that point and end up getting the more Target-y jobs. So I would say the figures are skewed higher than what the true average will end up being, since engineers and whatnot who are needed now (i.e., who graduated with job offers) are going to tend to be able to demand more money.
I was blogging for a recruiting company for over a year, and the fact is that right now the job market is very skewed: businesses are having a hard time filling specific positions involving science, specialties, and whatnot, but the demand for general labor or “office workers” is pretty crap.
As for the OP, I agree with some of the commenters who are questioning the “move out at 18” template. It’s just one way of doing things and has never been the norm in a lot of countries. For example, in Japan adult children often stay at home until they get married, and even then they often continue living with one set of parents.
Sure, I’m happy to walk through things here; I just think asking for a cite that “salary” does not include a calculation of the value of various benefits is strange. But here goes:
I think it is simply common knowledge that salary does not include benefits. See below the first several cites I picked off of Google to demonstrate this.
The NACE survey, linked to earlier in this thread, exclusively uses the words “salary” in both the summary of the report and the executive summary of the report. At no time does the term “total compensation” or something similar appear. Instead, the word “salary” appears 43 times in the executive summary.
Therefore, I think that the survey uses the word salary in its plain, everyday meaning.
Cites on salary meaning the payment of funds to an employee that does not include the value of other benefits the employee may accrue: The Difference Between Base Salary & Total Compensation – “Total compensation is your base salary plus all your benefits.” http://careerservices.colorado.edu/CommonFiles/PDFs/students/quickSalaryBenefits.pdf – “Compensation is made up of much more than simply base salary. For example, many employers offer commission or additional incentive pay for a job well done. Employers might also offer a signing bonus or reimbursement for relocation costs. In addition to the combined forms of financial compensation, you will want to consider the benefits given for the job. Benefits may include health insurance, dental insurance, retirement benefits (i.e., 401K), profit sharing, life insurance, short- and long-term disability insurance, and paid time off.” Base Salary: What Is It? - “Base salary is a fixed amount of money paid to an employee by an employer in return for work performed. Base salary does not include benefits, bonuses or any other potential compensation from an employer.” http://money.cnn.com/2013/02/28/smallbusiness/salary-benefits/ – “While that depends on benefits – and several layers of taxes – it typically ends up being 18% to 26% more than a worker’s base salary.”
It’s an average reported by a study done by an industry organization and independently confirmed by another study done by the federal Department of Education. Why is everyone so eager to ignore actual statistics? It is good news, after all. It’s almost like some people want to believe everyone is poor.
I wouldn’t put excessive weight on the NACE study because they do have an incentive to present the best possible number. On the other hand, I linked to statistics from the department of education that essentially matched it. I don`t think there’s any reason to doubt their numbers, unless someone can point to one specifically.
And here is another data point. This organization reports the median starting and mid-career salaries for 1,017 colleges. The midpoint college, a five-way tie that includes Western Illinois and Cleveland State, report median starting salaries at $44,700.
In the methodology, it specifically states that “Salary does not include equity (stock) compensation, which can be a significant portion of pay for some executive and high-tech jobs. In addition, salary does not include cash value of retirement benefits, or value of other non-cash benefits (e.g. healthcare).”
Yes, this is much better. However, all you are showing me is definitions for “base salary”; are you trying to say I should assume that any mention of salary automatically means base salary? I think think those assumptions are erroneous. Your cites do nothing to really answer the original question; I could just as easily have asked “by salary do they mean base salary in the NACE survey.”
So really we have not gotten anywhere; especially since the US Census bureau uses payments in kind for their salary computations. So, if the census Bureau uses the word “salary” to describe payment beyind base salary I do not agree with your assuptions.
So, yes these are better defined statistics, I agree. I just don’t know why we had such diffuculy in getting to this point with the the NACE survey. I was not refuting the numbers, only asking for clarity in their meaning - which should have been easy to provide, as it was here.
I didn’t mean to cause offense, but it’s just a bizarre question to answer – like, “Show that when the farmer says he grows corn, that he means corn in the sense that it is the thing that’s yellow, comes in ears, and has kernels.” Someone can go on an say, “I don’t think the farmer is talking about corn,” and how should someone provide evidence that “corn” means “corn?” One generally has to assume that people use the plain, everyday meaning of words when they use them, right?
And further, the Census data you linked to didn’t say it was measuring salary. 643 said it was measuring “total compensation” which includes wages AND benefits, and then wages which is salary and bonuses.
I think you should read it again. " Wage and salary accruals include executives’ compensation, bonuses, tips, and payments-in-kind" or go to the link. There are two distinctions being made, “wage and salary” and also “total compensation.” If you go to the link, there is no doubt about it. As all your cites show, “base salary” is a commonly used term and makes it much more clear what is being referred to.
All you are showing me by your last paragraph is that you did not actually go to the link and look at the chart. This subject can be somewhat confusing, so I do not fault anyone for making these kinds of errors, but I maintain the there are nitty gritty details, terminology and distinctions in this type of analysis that can easily lead to inaccuracies when doing comparisons across surveys and studies.
For the record, the distinction between salary and wage is more one of how compensation is paid (fixed over a period of time as opposed to fluctuating per unit or hour of production).
If you wish not to give offense, refrain from the excesse verbiage implicating a deficiency in personal charcteristics or abilties leading to my questions and stick to providing factual cites and discussion relevent to the specific topic at hand.
I don’t wish to belabor the point, but I found myself running up against the edit window in that last sentence. I was intending to point out that the total compensation figure would include what is typically thought of as benefits (see the social insurance and pension bits), and I was attempting to question whether you were interpreting payments in kind to include health and retirement benefits. I think we’re all on the same page now, but allow me to apologize for that last sentence which didn’t do justice to what was on the page, precisely because the edit window was running out and I couldn’t write it any better while under the gun.
ETA: and if this information helps you go in to work next week and make the case for a raise, I will be cheering you on.