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The Lab
A Yoke for the White Collar
New York’s college grads now hustle for jobs paying 1970s wages. Meet their coping mechanism—massive debt!
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The Lab
A younger New Yorker could be forgiven for running up debt: Real wages for 20-something professionals in New York haven’t changed since the early 1970s. At the same time, the number of college grads competing for white-collar jobs has increased—as has the cost of everything from real estate to beer to MetroCards.
In 1970, the median annual wage for New Yorkers in their 20s was $35,385, according to a census sample analysis by Queens College sociologist Andrew Beveridge published in the Gotham Gazette. In 2005, that median wage, adjusted for inflation, had decreased to $32,597.
In 1970, 19.5 percent of New Yorkers in their 20s had college degrees, according to the analysis. By 2005, that percentage had more than doubled. By 2006, roughly one in three New Yorkers 25 and older had at least a college degree, according to N.Y.U.’s Furman Center for Real Estate and Urban Policy.
For younger college grads, the job market has become ever more competitive and the monetary rewards stagnant.
And yet they come.
Roughly 1.8 million New Yorkers—more than 20 percent of the population—were between the ages of 20 and 35 in 2006, according to census estimates. In Manhattan alone, that age range included about 29 percent of the population. They fill apartments to the brim and they hustle through midtown, downtown, our town, trying to chomp a slice of an ever-dwindling pie.
Indeed, the vacancy rate for larger apartment buildings in Manhattan will likely end 2008 at below 3 percent, according to a May forecast by brokerage Marcus & Millichap. And, as this column has noted, more and more renters are younger—and more of them are getting help from their parents, whether as lease co-signers or as, quite simply, the monthly rent-check writers.
And as for buying instead of renting? For many of these eager-beaver 20-somethings with B.A.’s and B.S.’s, much of the city’s housing market remains prohibitively expensive. The average Manhattan apartment cost $1.72 million by April 2008, according to appraisal firm Miller Samuel. (It was just under $507,000 a decade earlier.) In the boroughs, it isn’t much cheaper: The average Queens home cost $535,308 by April.
Even after a 20-something meets the housing challenge, however creatively, he or she must then contend with the rising costs of the slightly-less-than-essentials, from transportation to health care to leisure to student-loan repayments to … everything! All against a hard backdrop of stagnant wages and increased white-collar job competition.
Which probably helps explain the rising levels of debt, here and elsewhere.
In 2003, the amount of outstanding debt nationwide due to revolving credit, which springs mostly from credit cards, was $771 billion. Five years later, that amount had ballooned to $957 billion.
The Federal Reserve, which tracks the debt, doesn’t have numbers specific to New York City. But in a city where a square foot in an average apartment can command over $1,200, and $2,000 a month gets you a one-bedroom walk-up with water bugs (if you’re lucky), it’s safe to assume that debt runs rather high for the younger New Yorkers among us.
tacitelli@observer.com
408 East 79th Street
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How are these kids coping ? By renting 2 & 3-bedroom apartments in post-war, 1970's "white brick" buildings, dividing them up so 4 to 6 of them can "live" in them, and turning them into post-grad dorms and hotels. And who is helping them with their rents ? Their parents.
My dad's building in the Kips Bay/Rose Hill area has been turned into one of these dorm-hotels by the young and selfish, who leave beer bottles by the elevators, throw up in the halls, and so on -- because his building was sold and then resold to owners who only want to get every rent-stabilized tenant out, deregulate the apartment so they can charge "market" rates, and then squeeze as many folks in as possible to those apartments, which then rent for $ 4500 - 7500 a month.
The kids living in those apartments could never afford those rents, so their parents help them out, and the kids think they are still in college or grad school but with jobs instead of classes. They do not cook, so the lobby is one big waiting room for delivery people and the kids come down barefoot in their p.j.'s like they were still in the dorm.
I suppose it is wonderful that everyone wants to come to NYC, but there are many wonderful places to live in NYC that are not mid-Manhattan, where this problem is the worst.
And how do the city and state treat these folks?
Read about the issue no publication is willing to report, and download the spreadsheet.
www.r8ny.com/blog/larry_littlefield/taxes_generational_equity_redux.html
And how do the city and state treat these folks?
Read about the issue no publication is willing to report, and download the spreadsheet.
www.r8ny.com/blog/larry_littlefield/taxes_generational_equity_redux.html
And how do the city and state treat these folks?
Read about the issue no publication is willing to report, and download the spreadsheet.
www.r8ny.com/blog/larry_littlefield/taxes_generational_equity_redux.html
If they come here, they are not New Yorkers. If I moved to Paris, would I instantly become Parisian? No.
And yet the city and state continues to pour all of its housing efforts and resources into housing people with no skills for the future economy.
Unfortunately the study does not break down college students by degree obtained, however I suspect that the problem with college grads coming into the city today is that the majority come to the city with Liberal Arts or Artschool degrees. Given that by definition those that graduate from college can afford to go to college, the fields of study they pick are dictated by whim and emotional preference rather than employability. 18 year olds tend not to think ahead ten years and choose fields that will be in demand. They all want to be whimsical literary writers, graphic artists, faux-artists, fashion designers or film-makers or some other "creative" type field. What they do not think over is that the supply of people who are qualified to do these things is vast especially in a large urban center, and the opportunities very limited. I bet they don't tell you that in Artschool.
If they had planned ahead they would have studied mathematics or engineering, or gone into the biological sciences. But math is hard, boo-hoo. There is high demand as well for computer engineers. Then they could have gotten a good job in the financial or healthcare sector and made more money.
But the wanna hang out with the cool kids and smoke pot and do coke and be artsy, until their trust funds run out
Yes, they should've gone into finance, where they would be assured high-paying jobs for good!
Oh, wait...
Seriously, why the hating on people just chasing their dream?
I have no problems with these young ladies not making enough money, but with an attitude that leads them to think they're entitled to the finest things in life.
These are the young ladies who will sleep with you for money.
Keep them coming - the competition lowers their rates.
As a native New Yorker and a recent graduate with an "art school degree", I am offended by some of the comments here. I am just humoring myself by even replying...
I can assure you that my art field choice was in no way a decision to be a "whimsical" or radical being. I am merely a creative being, and while for the moment I am miserable and stuck in a 9 to endless hours of the night, corporate, money-driven design firm, I find that I am very little concerned with money. Although I assure you, the paycheck, benefits and time flexibility are making it a great deal harder to quit. But ultimately I'm unhappy. So what do I do? Continue on the path of agony, or find place that pays less, but the work is far more enjoyable?
In college I knew exactly what I was doing, and I don't regret my choice of education at all, nor can I think of anyone else in the art field who would ever admit to regretting their decision of studying something they're passionate about. And it's not that math and science were too hard, boo hoo... They weren't. It's just that the arts were more stimulating and challenging.
...Maybe I'll go back to graduate school and get an MFA. Afterall, they don't call them "starving artists" for nothing.
I am amazed by the amount of over-generalization shown in the comments above.
Each individual is different, please do not assume to know their stories, as I'm sure you would not like it done to you.
These comments reflect poorly on their writers (something to think about)...
What an idiotic story! The story is all about comparing inflation-adjusted incomes with non-inflation adjusted expenses.
What the numbers are really saying is that since the '70s the purchasing power of 20 something New Yorkers has stayed about the same.
But that headline wouldn't have suckered us into clicking on this story.
Why the hating on the "underclass"? What a silly question. It's the kind of thing that should be expected of self-absorbed super-wealthy readers of the Observer.
That underclass they so deride is about to come back and kick them in their preppy arses, when the economy faulters and the U.S. sets down its path to become a Second World nation, that is, unless President Obama can enact the policies that will keep us from that fate.
Wake up richies! Your way of doing things is not working, so get used to sharing more of the pie with the other 90%!!! Oh, and have a great time at the Greenwich Country Club this weekend!!!
Yeah, and these are the same idiotic 20 something kids that will vote for the idiot Obama who will let tax cuts expire, raise payroll taxes to pay for granny and the poor people's medicaid. Obama will be a nice one termer.
Youth is wasted on the young.
And really, how can any "fine art" student justify spending the amounts some colleges want to procure a liberal arts degree?
Just as long as those kids stay out of Astoria (except the Beer Garden.)
A quantitative program doesn't guarantee you more money.
Associate Accountants (Requires BBA/BS and 2 years of experience) at any of the top 4 accounting firms make $60K a year, while Account Directors (Liberal Arts BA with the same amount of experience) at Advertising firms make $90K plus 10-20% commissions.
Sure there are Hedge Fund Managers, Venture Capitalists, Bankers etc making boat loads of money, but these are the cream of the crop elite. If you want to look at it from that angle, what about all the big media, publishing, editorial jobs that demand million dollar salaries? These people didn't study mechanical engineering.
The average student that goes into a quantitative discipline isn't going to be raking in impressive dough working as a financial analyst, accountant, engineer, financial advisor etc. There are jobs in liberal arts with comparable salaries like creative directors, account directors, sales, management consulting, lawyers etc.
Straight out of college, quantitative disciplines usually start out making more, but 5 years down the line, the liberal arts salaries catch up and often exceed them because they go into managerial positions while the quantitative roles end up just supporting the functional business side. Comp sci IT dudes aren't exactly as important to a company as revenue generating sales people, even if the sales person studied art history.
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