If you are living in California more than, oh, say 15 miles from the ocean, you likely wonder why the statistics saying the economy is going fantabulously well don’t seem to fit with what you see while looking around or what you hear after talking to people.
Two articles explaining why you might be feeling that disconnect, why something just seems off.
First, business activity including employment in the Inland Empire area of Southern California is only now, in early 2017, returning to the level when the recession started.
Second, it isn’t just your imagination that lots and lots of younger people are still living at home when it seems like they should be out on their own. We are talking people who have graduated and are employed.
5/25/17 – Daily Bulletin – Inland business is back to pre-recession peaks – with one big exception.
The Inland Empire is defined by the Census Bureau as the Riverside-San Bernardino-Ontario metropolitan area. Colloquially the IE would include the area from Pomona Valley area of eastern Los Angeles County all the way out to Palm Springs.
Article says that in the IE general business activity, employment, and personal income in the first quarter of 2017 have finally caught up to the level they were before the recession kicked in. Only residential construction is still lagging behind.
Let’s focus on employment and ponder that for a moment.
The level of employment in the IE region has finally recovered to what was before the recession. Let’s look at that in simple terms. Let’s assume no one moved in or out of the region. That means that everyone who lost their job during the recession has finally gone back to work.
That’s good, right?
Well, consider that good news from another direction. If all the people who lost a job have just now finally gone back to work that would not leave room for anyone who has graduated from high school or college in the last nine years to have yet found a job.
Alternatively, if a large portion of the people who graduated from high school and college found a job, that means an equal number of people who lost their jobs have still not gone back to work.
Practically that means that some portion of people who graduated in the last nine years have still not found a job and some portion of people who lost their jobs during the recession still haven’t found another one.
Or, like my son, they had to leave the state to find work.
Only finally recovering to the pre-recession employment level after nine or so years is a grim recovery.
Now let’s consider the impact of the slowly recovering economy from another direction.
Another article in the Daily Bulletin on 6/24/17 explains Why millennials living with their parents has become the norm in southern California.
Article explains the statistics by using several stories, such as a 28-year-old or a 30-year-old who have employment but are still living at home. Most telling is an engaged couple, ages 26 and 26, who plan to live in soon-to-be wife’s parents home after the wedding. They can’t afford to be on their own.
Some starter statistics:
- 32% of people age 18 through 34 live with their parents; I think that is a national statistic
- That statistic was last that high about 130 years ago, according to the article
- 44.5% of younger adults in the Inland Empire live with their parents; that is the second highest rate in the country
- 41.5% of people under 34 in the Los Angeles-Long Beach-Orange County region lived with their parents; that is the fourth highest rate in the country.
- Miami is #1 and New York City is #3.
Article explains why housing costs are the primary factor:
- Los Angeles/Orange County area:
- $1,348 – median rent in 2015
- $1,975 – Millennial’s median income
- 68% – rent as percent of average income
- Inland Empire:
- Median rent not specified but lower than LA/Orange county
- 65% – rent as percent of average income
You just can’t move out on your own if two-thirds of your income is going to rent. Doesn’t work.
Article does admit one factor for the high housing prices is that housing construction over the last 20 years has not kept pace with the population. That means there just aren’t enough homes for everyone who would otherwise be ready to move out on their own.
So if it seems like a lot of your friends have children who just have not been able to move out on their own because they can’t find work or they can’t afford an apartment, it is not just your imagination. That is quite common in Southern California.