Despite So-Called “Recovery,” More Millennials Moving Back Home

College graduation is one of the most important days of a young person’s life. It’s a milestone that signifies the end of formal education and the beginning of life in the real world, a time marked by the hope of an unwritten future, the nervous anticipation of whatever comes next, and the angst of potential failure.

Sadly, graduation has lost much of its symbolic power in recent years. Rather than a gentle shove toward independence, for too many young adults, it’s the last day before moving back home with mom and dad. This was supposed to be a temporary condition, a brief setback before our generation could once again march in relative unison towards the American Dream. And yet new data shows the exact opposite.

The percentage of Millennials living with their parents has actually increased as the recovery has progressed according to a Pew Research Center report based on new Census Data. The study, found that 24 percent of young adults lived with their parents in 2010, at the beginning of the economic recovery, and 26 percent did in 2015.

This increase came despite the unemployment rate falling from 12.4 percent to 7.7 percent over the same time span. So what gives? How could one of the key indicators of young adults’ financial insecurity be rising at the same time the unemployment rate is falling?

The answer is undoubtedly a complex mix of factors, some social, some economic, but one of the biggest drivers is that the unemployment rate is simply a poor indicator of economic health. Sure, increasing numbers of young adults are finding employment, but it’s often in part-time work, or dead-end jobs for which they are overqualified. Even those who can scrape together a reasonable income are being squeezed by other factors like student loan debt, which prevents them from being able to buy a home, start a family, or save for retirement.

Steven Rattner, writing for the New York Times, explains just how hard life is for Millennials these days:

Americans between 18 and 34 are earning less today (after adjustment for inflation) than the same age group did in the past. A typical millennial averaged earnings of $33,883 (in 2013 dollars) between 2009 and 2013. That was down 9.3 percent (after adjustment for inflation) in just a decade and is the lowest since 1980. Older Americans have fared considerably better; earnings of all full-time workers were roughly flat between 2000 and 2011.

Still more striking is that millennials have endured falling earnings even though they have attended college in record numbers.

The wealth of millennials has been hit even harder than their incomes. Their median net worth was just $10,400 as of 2013, down 43 percent from the $18,200 that Gen Xers had in 1995 when they were under 35. With incomes squeezed, millennials are not only not saving much; they are dipping into whatever savings they do have.

That’s worrisome when combined with weak incomes and low net worths. Millennials also participate less frequently in 401(k) plans and, scarred by the recession, invest less and keep more than half their money in cash — not a great long-term strategy.

The diminished incomes feel even more stretched given the soaring price of college tuition, which has left many young adults with mountains of student loan debt. Unfortunately, federal aid, including loan subsidies and Pell grants, is actually fueling the problem by enabling college institutions to aggressively raise tuitions, according to a new study by New York Federal Reserve. The result of this upward pressure on prices is a new graduating class that heads home with a diploma and an average debt of over $35,000 – a sum that will not only impact their financial decisions, but also their social decisions, for years, maybe decades.

A new survey from Bankrate finds that 45 percent of Americans with student loans, and 56 percent of those between 18 and 29, have put off a major life event like getting married, buying a home, or saving for retirement, because of student loan debt.

How do experts suggest young adults begin to deal with their debt woes? Simple. Move back in with mom and dad.

“Live at home for as long as you and your parents can stand it. I get it; nobody wants to go back and live in their parents’ basement,” financial advisor Thomas Scanlon told Bankrate. “The reality is, with student debt, a car loan, cellphone bill, car insurance and some spending money, most of the paycheck is gone. Live at home and save the rent.”

That may be good advice, but it’s certainly not what young adults want to hear. We want an economy capable of catapulting us toward independence, not government policies that have the impact of punting us back to our folks’ house.