Generation Y: The Challenge for the Nation’s Economy :: The Construction Management Pro

Generation Y: The Challenge for the Nation’s Economy

I recently read an article stating that Generation Y is the “Next Challenge for Cities.” What is interesting is the statistics included in the article. John K. McIlwain states that Gen Y (those between their late teens to their early 30′s) are forming households at a rate of 400,000 per year; just a quarter of what it was prior to the recession (i.e. 1.6 million). In addition, this cohort is facing an unemployment rate of nearly 30% and carrying an average debt load of $23,000 per person. Click here to read the article

Household formation is what drives housing absorption. If we are not forming new households, there will be no demand for the housing industry to produce new housing, let alone liquidate the shadow industry of foreclosed property. Without a vibrant housing sector, there will not be construction jobs and consumer durable sales will also lag. Isn’t that what we are seeing? That is why I say this is the challenge for the Nation’s economy.

John McIlwain recommend that we “Keep in mind that this is also the next generation of the workforce. Gen-Yers are the entry-level employees needed to keep businesses growing, innovating, and producing. Will they be able to afford to live near jobs now or in the future? Without savings for a down payment and with parents needing to rebuild retirement accounts, when will they be able to afford to buy a home? With wages falling, will they be able to afford market rents? This is an issue facing every community that wants its economy to grow in the years ahead.” I would add, not just every community but our nation as a whole.

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