What Do College Undergrads Spend Their Student Loans On: High-School Classes

Over the weekend we closed the chapter on the "mystery" of America's collapsing labor force and the record 90+ million Americans out of the labor force. As Pew reported [8], confirming what we had said all along, it has little to nothing to do with Boomers retiring - simply because under ZIRP they can't afford to retire - and everything to do with Millennials staying in school because they can't find the well-paying jobs they had expected, raking up $1.2 trillion (and exponentially rising [9]) in government-funded student debt in the process. To wit:

More and more Americans are outside the labor force entirely. Who are they? According to the October jobs report, more than 92 million Americans — 37% of the civilian population aged 16 and over — are neither employed nor unemployed, but fall in the category of “not in the labor force.” That means they aren’t working now but haven’t looked for work recently enough to be counted as unemployed. While that’s not quite a record — figures have been a bit higher earlier this year — the share of folks not in the labor force remains near all-time highs.

You might think legions of retiring Baby Boomers are to blame, or perhaps the swelling ranks of laid-off workers who’ve grown discouraged about their re-employment prospects. While both of those groups doubtless are important (though just how important is debated by labor economists), our analysis of Bureau of Labor Statistics data suggests another key factor: Teens and young adults aren’t as interested in entering the work force as they used to be, a trend that predates the Great Recession.

More