“Amira Nader graduated from Columbia University in 2010 with a master’s degree in acting and nearly $190,000 in debt. She now works for a public radio station in New York City and waits tables on the side…

…In New York, Ms. Nader is juggling her dreams and debt, which “looms over my head every day, especially when I think about a home, or children, or sending those imaginary children to college.” To save for a move, Ms. Nader has been working 60 hours a week, including 35 hours answering phones at WNYC. She pays about $1,025 a month rent for a Brooklyn apartment she shares with two roommates. On Sundays, she hosts a classic-country radio show at Columbia where she plays songs by Hank Williams and Dolly Parton. If she works at a nonprofit like WNYC for eight or nine more years, most of her student debt will be forgiven by the government under an Education Department program that promises to forgive debt after a set period—10 years for those in nonprofit and government jobs, and 20 years for those in the private sector. But the strictures of the program limit her options. There are nonprofits in New Orleans, but she doesn’t feel secure about risking a move from New York. Still, she says, New York is “crowded, expensive. Everything cool is closing.” She adds, “I want a house, I want a dog, I want a room for all my records.…I don’t want to be an old lady here.””, Neil Shah, “More Young Adults Stay Put in Biggest Cities”, Wall Street Journal

“This isn’t a front page story, because instead of greedy, for-profit, private sector lenders making the loans, it’s our own well-intended federal government and it’s student loan program (that can’t be discharged even in bankruptcy) and the college/university “industrial complex” that allowed a young adult like Ms. Nader to accumulate $190,000 in debt for degrees that the marketplace does not value (at least high enough to allow her to pay back her loans). And even worse, she is now being incentivized to underperform economically, for herself and the economy as a whole, by the federal government’s new perverse incentive that forgives student loans in 10 years, but ONLY if these young adults work for the government or in a low-wage job at a not-for-profit!!! If she worked in the for-profit sector and contributed more to the economy and the tax base, her student loans would be forgiven in 20 years (twice the time), but again, only if she underperforms economically and can’t afford to pay it back!!! It’s about as stupid a policy as I can think of, courtesy of the well-intended, but economically-illiterate, anti-free market, liberals in our federal government. Why don’t the institutions of the “educational industrial complex” (both not-for-profit and for-profit colleges and universities, including state universities) who derive much of their revenues from federal student loans have some skin in the game (risk of loss) and/or maybe absorb some or all of this cost? I believe this idea would cause these institutions to help students like Ms. Nader make wiser decisions about their education and the debts they incur to obtain it. But that would make too much common sense wouldn’t it?”, Mike Perry, former Chairman and CEO, IndyMac Bank

U.S. Economy

More Young Adults Stay Put in Biggest Cities

Lack of Jobs Elsewhere, Tough Mortgage Standards Play a Role

Amira Nader hosts a radio show at Columbia University on top of her paid job at a public radio station. She would like to leave New York but feels stuck.

Amira Nader hosts a radio show at Columbia University on top of her paid job at a public radio station. She would like to leave New York but feels stuck. Bryan Anselm for The Wall Street Journal

By Neil Shah

Amira Nader graduated from Columbia University in 2010 with a master’s degree in acting and nearly $190,000 in debt. She now works for a public radio station in New York City and waits tables on the side.

Ms. Nader, 31 years old, who moved to New York nine years ago from Florida, dreams of owning a home in New Orleans. But like tens of thousands of other young Americans, she is finding it hard to move away.

“I’m scared,” she said. “There aren’t jobs like this in New Orleans. If there are, they’re already taken.”

For decades, young people flocked to the U.S.’s three biggest metro areas—New York, Los Angeles and Chicago—to build careers before taking their talent and spending power elsewhere to raise families. That pattern now appears to be fading as more young workers stay put.

From 2004 to 2007, before the recession, an average of about 50,000 adults aged 25 to 34 left both the New York and Los Angeles metro areas annually, after accounting for new arrivals, according to an analysis of census data by the Brookings Institution and The Wall Street Journal.

The recession diminished this flow. Fewer than 23,000 young adults left New York annually between 2010 and 2013. Only about 12,000 left Los Angeles—a drop of nearly 80% from before the recession. Chicago’s departures dropped about 60%.

Young adults who moved to the three cities for school, internships or early jobs—or simply because it seemed cool—may now be stuck, said William Frey, a demographer at the Brookings Institution.

A confluence of factors is behind the decline. Many young workers who began their careers during the recession are struggling to find their footing. Some are delaying marriage and children. Mortgages are hard to get for those without pristine credit.

Increased financial insecurity also may play a role, especially for young people shouldering big student debts. Median earnings for full-time U.S. workers aged 18 to 34 have fallen nearly 10% since 2000, after adjusting for inflation, to below 1980s levels.

In tough times, finding well-paying jobs may be easier in big cities, offsetting their relatively high costs of living.

The trend has important implications for the economy if it goes unabated. Roughly 1 in 7 young adults lives in America’s three biggest metropolises, which have outsize populations compared with most U.S. cities and together exceed the seven next-biggest metro areas.

If younger people move less, some could get stuck in jobs that aren’t good matches for them, reducing the economy’s productivity. That could make the labor force less flexible and less able to compete internationally in an era of rapid technological change and globalization.

Migration also helps distribute human capital and economic demand more widely, demographers contend, allowing states with weaker economies to benefit from those with stronger ones.

The mobility of young workers “has been a tremendous asset to the American economy,” said Kenneth Johnson, a demographer at the University of New Hampshire. His own state has benefited for decades from skilled, relatively affluent transplants from the Boston metro area.

Matthew Bagley, 32, has stayed in Los Angeles a lot longer than he thought he would. The former Pennsylvanian has a lucrative job at a small company that supplies copper parts and lives with roommates in Manhattan Beach, Calif. Work and playing “touch rugby” are his priorities, not marriage and children; his own parents wed at age 21, and he isn’t rushing to follow in their footsteps. Having a “family is something that always comes when it has to come,” he said.

Some Americans are actively choosing big-city life. The urban cores of metropolitan areas are growing slightly faster in percentage terms than their suburbs, though many more Americans still move to the suburbs from cities than the other way around.

“I’m not going somewhere that is just strip mall after strip mall,” said Matt Swanson, 38, a school counselor who has lived in Chicago for more than a decade, after growing up outside the city. “I’ve been fighting living in the suburbs for a long time.”

To be sure, as jobs and wages increase nationwide and lending standards ease, the sluggish recovery from the 2007-09 recession finally may relax its grip on young people’s movements.

Estimates of U.S. state populations released last month by the Census Bureau showed an influx of people into Florida, Arizona and Nevada between July 2013 and July 2014.

Earlier data also have hinted that Americans are starting to move more—but, for the most part, it is middle-aged and older people packing again, not 20-somethings.

In New York, Ms. Nader is juggling her dreams and debt, which “looms over my head every day, especially when I think about a home, or children, or sending those imaginary children to college.”

To save for a move, Ms. Nader has been working 60 hours a week, including 35 hours answering phones at WNYC. She pays about $1,025 a month rent for a Brooklyn apartment she shares with two roommates. On Sundays, she hosts a classic-country radio show at Columbia where she plays songs by Hank Williams and Dolly Parton.

If she works at a nonprofit like WNYC for eight or nine more years, most of her student debt will be forgiven by the government under an Education Department program that promises to forgive debt after a set period—10 years for those in nonprofit and government jobs, and 20 years for those in the private sector.

But the strictures of the program limit her options. There are nonprofits in New Orleans, but she doesn’t feel secure about risking a move from New York. Still, she says, New York is “crowded, expensive. Everything cool is closing.” She adds, “I want a house, I want a dog, I want a room for all my records.…I don’t want to be an old lady here.”

Posted on January 20, 2015, in Postings. Bookmark the permalink. Leave a comment.

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