Are Millennials Being Priced Out of California?

Are millennials being priced out of California?california empty pockets

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recent report by the U.S. Census Bureau analyzing statistics from the latest American Community Survey showed the Millennial Generation is struggling to find full-time employment, obtain affordable housing and reach financial independence. The problems are particularly bad here in California.

Young Californians are not only worse off than their parents’ generation, but they’re doing worse than their counterparts in the rest of the country.

“Many of the differences between generations examined within these latest data reflect long-term demographic and societal changes,” said Jonathan Vespa, a Census Bureau demographer. “Three decades of decennial census statistics combined with the latest American Community Survey statistics give us a unique view of how — and where — our nation is changing.”

Better educated but worse job climate for young Californians

Among the five years of data, the most striking statistics are in the area of employment. Despite being better educated, young Californians are earning less money than their parents and are less likely to have full-time employment.

In 1980, 71.1 percent of Californians aged 18 to 34 were employed — better than the national average of 69.3 percent. Today, California’s employment rate of young adults is lower than the national average at 62.1 percent.

Tom Allison and Konrad Mugglestone of Young Invincibles write, “The great recession hit young workers hard, leaving roughly 5 million young adults unemployed five years after the downturn officially ended.

Young Californians earning less today

Of those young people working full-time, wages are down in 2013 inflation-adjusted dollars. Thirty-four years ago, the average Californian earned $36,961 dollars per year. That median wage has dropped to $35,734 per year for the average Californians aged 18 to 34.

As Slate recently wrote of U.S. Census data analyzed by the Young Invincibles, “For Americans between the ages of 25 and 34, annual income earned from wages has fallen in four of the top five biggest employment sectors — retail (down 9.9 percent), the leisure and hospitality business (down 14.65 percent), manufacturing (down 2.87 percent), and professional and business services (down 4.28 percent).” According to the study, the one exception is health care, which has remained nearly unchanged.

While Californians earn more than the national average, much of the wealth has been concentrated in the Bay Area, which skews California’s statewide figures.

In San Francisco County, the average full-time worker, between the ages of 18 and 34, earned a median annual salary of $59,580 — more than double the average wages in rural Madera and Modoc counties. The average young worker in the tech-dominant San Jose metro region earns $51,149 per year — 52 percent more than their counterparts in the Los Angeles metro area.

Millennials can expect lower wages  throughout  their working lives. Lisa Kahn, a labor economist at Yale University, found that college graduates that enter a weak economy suffer lower wages throughout their entire careers.

“I find large, negative wage effects of graduating in a worse economy which persist for the entire period studied. I also find that cohorts who graduate in worse national economies are in lower-level occupations, have slightly higher tenure and higher educational attainment, while labor supply is unaffected. Taken as a whole, the results suggest that the labor market consequences of graduating from college in a bad economy are large, negative and persistent.”

Price of housing top in nation

While wages have declined for millennials, the cost of housing has continued to increase.

California is home to three of the most expensive major cities for housing in the country: Los Angeles, San Diego and San Francisco. The most expensive city in the country, San Francisco, has an average median home price of $744,400 and requires an annual salary of $145,500 to pay the nearly $3,400 mortgage, according to Business Insider. That’s double Seattle and Chicago and more than three times the cost of Houston, Dallas and San Antonio.

The city of San Jose estimates the average apartment in San Jose rents for $2,230 — up by 49 percent in the past four years.

“Housing costs in the peninsula, from San Francisco to San Jose, have doubled in the last five years,” writes Kerry Cavanaugh of the Los Angeles Times. “It’s even worse in San Francisco, which recently surpassed New York City as the most expensive rental market in the nation.”

More Californians live with Mom and Dad

Unsurprisingly, due to these increased housing costs, millennials in California are more likely to live with their parents than those in the rest of the country or previous generations.

According to the U.S. Census Bureau report, 34.5 percent of Californians aged 18 to 34 are living with a parent who is the householder. That represents a dramatic shift from 1980, when just 1 in 5 young Californians lived with their parents. Then, fewer Californians lived with their parents in comparison to the rest of the country. Now, more Californians live at home than the national average.

“Housing is typically the largest share of household expenditures and raising its price reduces discretionary incomes, while increasing poverty,” writes Wendell Cox, principal of Demographia, an international public policy and demographics firm.

Poverty, too, has increased among young Californians. Nearly one in five Californians aged 18 to 35 lives below the poverty line, an increase from 1980.

“Let’s say you’re a kid out of college and your first job, you’re getting paid $40,000 a year,” Richard Green, director of the USC Lusk Center for Real Estate, told the Los Angeles Times. “You want to live in a safe neighborhood in Los Angeles, with decent access to jobs, transit, et cetera. You’re looking at $1,400 to $1,500 a month in rent. So that means you’re paying $18,000 a year out of your $40,000 just in rent.”

The U.S. Census Bureau analyzed five years of demographic, economic and housing data collected between 2009 and 2013.

This article was originally published by


  1. Texas beckons. Go east young man. Southeast. Leave California to the Mexicans and welfare blacks.

    • “Texas beckons. Go east young man. Southeast. Leave California to the Mexicans and welfare blacks.”

      And be greeted by the illegal and legal Mexicans that are prolific throughout Texas, but especially Brownsville?
      If you G.T.T., better brush up on your espanol.

  2. The problem that this generation has is that it is conflicted by the media to assign itself to uselessness by conforming to the democrat party.

  3. Is the “Pope Catholic?”. Sorry but I find this facetious. As a 60s chick I was priced out of the market years ago but I got married to a so called “sugar daddy” and I’m still with that “sugar” nearly 37 official years and about 40.5 unofficial. And now we have two over priced relics. That we will leave to our self employed sons so that one day whether married or not, they can have a roof over their heads with only property taxes, utilities and maintenance upkeep to be concerned about. Taxifornia is an embarrassment to the whole nation of whichever country Taxifornia belongs to at the moment?

  4. 11 years ago it took $80k/year to be ok in SillyKoin Valley. Now this article says the average is $51k which isn’t even enough to cover the basics. The tech companies are bringing in, or want to bring in, more H1B Visas to suck up more wages and put more pressure on already ridiculous housing prices. Toss in the illegals keeping wages down and this place is turning into a high priced Ghetto that is out of reach for almost anyone but the upper echelon. Toss in the insane property taxes in this state and the rising cost of energy and it’s no wonder that even mobile homes aren’t selling.

    • Roger V. Tranfaglia says

      Why even buy a mobile home when you can camp out under the stars?
      Look,we conservatives have been advising you folks what you need/should do. Yet you reject all suggestions we offer, scream about all this crap coming down on you,. You havn’t come up with any good solutions yourselves, and then blame us! Go you know what yourselves…….

  5. Richard Rider says

    It’s the tragedy we CA seniors face that no Democrat discusses — our kids and their families too often are now leaving California for affordable housing and better economic opportunities. Well, perhaps it’s because Democrats hate kids (given their disdain for the future of CA kids held in the urban detention centers they call “schools”).

    Or perhaps it’s Karma — most of us CA seniors left our families behind when we moved to the West Coast — for the great weather and the bright economic future.

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