TIME Research

Millennials Now Have Jobs But Still Live With Their Parents

Young woman working with laptop at home
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A Pew study finds the perplexing pattern has affected the housing industry

Halfway through this decade and nearly seven years after the Great Recession, Millennials are bouncing back—sort of.

In a new study released by Pew, researchers find that while Millennials—people who were born after 1981—are back to the pre-recession era unemployment levels of 7.7%, they haven’t been able to establish themselves as adults in other ways, like owning a home or getting married.

Richard Fry, an economist and lead author of the study, describes the situation as Millennials’ “failure to launch.” “I think the core is a bit of a puzzle with one clear consequence,” Fry told TIME. “There’s good news: the group that was hit the hardest—young adults—are now getting full-time jobs and earnings are tracking upwards. But the surprise is that with the recovery in the labor market, there are fewer young adults living independently.” (Living independently here is defined as heading a household; in other words, owning a home.)

When the recession hit, young people moved back into their parents’ house in droves, unemployed and without much hope for any future work. The thought process was that once the economy improved and Millennials returned to work, they’d scoot out of their parents lair.

But that hasn’t been the case, and economists aren’t sure why.

“Is it a good thing or a bad thing? I don’t know,” Fry said. He was also the author of a study three years ago that explored Millennials living and work situations using 2012 data, and he thought then that the explanation was clear. “My thought was, ‘Yeah, that’s true, the job market is crummy,'” he said. “My expectation was that as the labor market improves, more young people will strike out on their own, but that’s not the case.”

About 42.2 million 18-to-34 year olds are living away from home this year; 2007 numbers were just above 2015’s independent young adult population at 42.7 million. There are a few common characteristics of these Millennial householders; they are more likely to be women (72% compared to their male counterparts) and college-educated (86% of those with bachelors degrees were living independently compared to 75% of the same peer group holding only a high school education). Fry points to women getting in permanent romantic relationships earlier that either lead to marriage or cohabitation as the cause of this gender difference.

The consequences of Millennials still living at home go far beyond the household dynamics of adult children being at home with parents. Consider the housing sector, which has not recovered from the 2008 economic tumble. If more young adults had decided to take on home ownership, the economy may have improved more.

So how are Millennials most likely living if they’re not living at home? Probably with a roommate, or doubled up with a fellow adult who is not their spouse or partner, data suggests.

But having a roommate or living at home have real demographic effects for the future, Fry says. He goes back to two key facts: that people living independently tend to be better educated and that college educated people tend to delay marriage or not marry at all (though even Millennials with a high school education are not getting married as much as they used to.) That means that less educated Millennials are facing consequences in not just the job market, but beyond.

“There’s less sorting—that when the less educated do marry, they marry others who are also less educated,” he said. “That’s going to impact household income and economic wellbeing. That’s going to affect economic outcomes.”

MONEY

Think Health Care is Pricey? Get Ready to Spend Even More

pile of prescription medicine pills and tablets
Jan Mika—Shutterstock

Soon one out of every five dollars Americans spend will to go healthcare.

For the past six years Americans have gotten a respite from fast-rising health care costs. No more.

With millions of baby boomers entering retirement and pricey new drugs hitting the market, U.S. health care spending, which had increased at relatively moderate 4% rate since the financial crisis, grew 5.5% last year, according to a new government study reported on Tuesday by The Wall Street Journal.

You can expect more too. The actuaries who calculated the figures, project that spending will average 5.8% between 2014 and 2024. By then, health care as a share of the nation’s overall economy will have grown to 19.4% from 17.4% in 2013. In other words, our nation’s medical bills will account for one out of every five dollars we spend.

The changes aren’t totally unexpected. A big part of the extra costs are tied to the fact that baby boomers — many now in their 60s — are requiring more care. Important but expensive new drugs, like one that helps treat Hepatitis C, are also a factor, according the Journal.

Still, the rising costs aren’t good news, especially considering a key promise of the Affordable Care Act, which brought access to health insurance to millions of Americans, was to get the growth in health care spending under control, a goal known as “bending the curve.”

For people who get their health insurance coverage at work, rising costs are likely to mean a continued push by employers toward high-deductible plans, which can have steep out-of-pocket costs. Read here for more on tools for keeping medical bills under control.

TIME Economy

Hedge Fund Economists Want Puerto Rico to Lay Off Teachers to Fix Debt Crisis

Puerto Rico Teeters On Edge Of Massive Default
Joe Raedle—Getty Images The Puerto Rican flag flies near the Capitol building as the island's residents deal with the government's $72 billion debt on July 1, 2015 in San Juan.

The island is $72 billion in debt

Puerto Rico can avoid a costly default by upping taxes, cutting teacher jobs and closing schools, a group of hedge fund economists proposed in a report released on Monday, offering a controversial solution to the island’s “unpayable” $72 billion debt crisis.

The report, commissioned by hedge funds holding several billion dollars of Puerto Rico’s bonds, highlights the island’s rising education expenditures against the backdrop of countless school closings and waves of poor families fleeing to mainland America.

According to government figures, education spending rose 39% to $4.8 billion over the last decade, while enrollment fell 25% to about 570,000. Puerto Rico still spends just $8,400 per student, compared to the U.S. national average of $10,667, according to the Guardian.

“The real expense per student has increased enormously without increasing the quality of education,” Jose Fajgenbaum, director of Centennial Group Latin America and one of three former IMF economists who authored the report, told the Guardian.

The hedge fund-backed report arrives in response to the Krueger report, a government-commissioned study released June 29 that proposed a significant debt restructuring with which bondholders were unlikely to agree.

Read next: Everything You Should Know About Puerto Rico’s Economic Crisis

TIME Economy

Why Your Rent Increases Are About to Get Steeper

Only 6.8% of apartments are vacant — the lowest in 30 years

Landlords will almost always remember to increase your rent each year. Maybe it’s just a few percent, maybe it’s a few hundreds of dollars. Or you may be one of the lucky few not to see your rent jump. Whatever it is, enjoy it while it lasts — it’s only getting worse.

Rent increases are expected to get steeper with the rental vacancy rate hitting a 30-year low of 6.8% this quarter, the U.S. Census Bureau announced on Tuesday. That means about 93.2% of America’s rental housing units are rented out — a level of demand the nation hasn’t seen since 1985. As a result, economists predict rent increases are “set to accelerate” to about 5% this year and the next, marking one of the highest periods of rent growth on record, according to Bloomberg News.

The upside, however hard to see, is that it might be time to consider actually purchasing an apartment or house. That could also help lift up a flagging homeownership rate, a trend tied to all sorts of economic woes.

MONEY China

China Slowdown? Depends on Where You Look

#CHINA-XINJIANG-HAMI-RAIL TRACK-COMPLETION(CN)
Xinhua News Agency—Xinhua News Agency/Getty Images Workers lay railway tracks at the railway construction site in Hami, northwest China's Xinjiang Uygur Autonomous Region, July 22, 2015. Hami section of the railway track linking Ejina Banner of north China's Inner Mongolia Autonomous Region and Hami was completed on Wednesday. The railway is expected to be in operaton at the end of this year.

China's economy is expected to expand 7%, with growth slowing to 6.7% in 2016, a Reuters poll of analysts showed on Thursday.

Many U.S. consumer companies are brushing aside worries that China’s weakening economy and sputtering stock market will dramatically damage their bottom lines even with early trouble signs in recent earnings reports.

Most notably, companies dependent on Chinese infrastructure growth, such as United Technologies and Caterpillar, are claiming soft second-quarter earnings and a downgraded outlook based on weakened Chinese demand.

Consumer companies like United Continental Holdings, Apple and General Motors, on the other hand, continue to paint a rosy picture based on continued strong demand by the Chinese consumer.

The Chinese economy has faced difficulties this year as decelerating growth in factory output, retail sales and domestic investment has been compounded by a slowing property market.

China’s economy is expected to expand 7%, with growth slowing to 6.7% in 2016, a Reuters poll of analysts showed on Thursday.

“We have been worried about it,” Steve Weeple, head of global equities at global asset manager Standard Life Investments in Boston, told Reuters. “We would certainly not be surprised to see some of the big consumer packaged goods companies, some of the industrials, reporting that China activity is probably a little below headline growth rates.”

Furthermore, a 30% early summer selloff in the Chinese stock market could hit companies more broadly in the third quarter.

Names that have a reliance on infrastructure growth in China have been hit the hardest so far this quarter. United Technologies fell 7% on Tuesday, its worst drop in nearly 4 years, after cutting its full-year profit outlook, in part due to slowness in its elevators business in China as the nation’s housing market cools.

Caterpillar shares had their worst performance in six months on Thursday after the construction and mining equipment maker reported lower quarterly profit and sales, citing slower construction in China.

Even smaller names, generally thought to be more insulated to global economic pressures as a greater portion of their revenue is derived from within the U.S., have noted softness within China’s infrastructure.

“We’re seeing real industry pressure in construction, in agriculture, in truck and bus inside China – there’s been industry contraction in construction (business) year-on-year,” Rich Lavin, CEO of Commercial Vehicle Group Inc which supplies cab-related products for trucks, bus, farming and other types of vehicles, told Reuters in mid-June before entering its quiet period ahead of earnings.

GM, United, Apple More Upbeat

But consumer-facing companies are telling a brighter tale.

Harley-Davidson Inc saw a 5 percent pop in its shares on Tuesday, its biggest percentage gain since October, after its quarterly results showed a 16.6 percent jump in Asia-Pacific sales, which the company attributed to strong demand for its street motorcycles in China and India.

“You have to look company by company and product line by product line because there are some things for which there is no substitute,” said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh. “It’s the cool factor for Harley Davidson.”

United Continental, which flies more to China than any of its U.S. rivals, says the region remains a good investment. “The demand is still growing,” said Chief Revenue Officer Jim Compton.

Despite flat June auto sales in China, General Motors Co also cited continued strength in China in its earnings report on Thursday, and said it expects to maintain strong profitability there. Shares of the automaker advanced 4 percent to $31.50.

The same brand name appeal mentioned by Forrest may be bolstering Apple’s China sales. Though the company’s shares tumbled nearly 7 percent after its forward-looking guidance missed estimates, it reported a 112 percent sales increase in China over last year and said it plans to open 40 stores in China in the next 12 months.

“China was simply spectacular for us,” said Luca Maestri, Apple’s chief financial officer. “We feel it is a long runway for us in China.”

–Additional reporting by Joseph White, Jeffrey Dastin, Julia Love and David Gaffen

TIME Economy

Here’s Every City in America Getting a $15 Minimum Wage

As New York is set to raise fast food workers' pay

When dozens of New York fast food workers walked off the job in 2013 demanding minimum pay of $15 per hour, their campaign seemed like a longshot. But two years, several nationwide strikes and new rules laws later, a $15 minimum wage is becoming a reality for millions of workers across the United States.

The workers’ campaign, known as Fast Food Forward and backed by the Service Employees International Union, has slowly gained momentum through a series of increasingly large one-day strikes targeting fast food chains like McDonald’s, Wendy’s and Burger King. At first, the effects of the strikes seemed small, with individual restaurant owners conceding to minuscule wage increases for some of their workers. But even as businesspeople were doing their best to ignore the movement, politicians were paying close attention.

Over the last two years, several cities and now the entire state of New York either have or are in the process of enacting a $15 minimum wage for various workers. Here’s a look at the cities that have enacted huge pay increases, and the ones that could still be to come.

New York

How it Happened: A wage board appointed by Gov. Andrew Cuomo presented a recommendation Wednesday to increase the minimum wage for fast food workers to $15 per hour across the state, up from the current $8.75. Cuomo has enthusiastically backed the initiative.

The Plan: In New York City, the minimum wage will increase to $10.50 by the end of this year, then increase incrementally each year to reach $15 by 2018. In the rest of the state, the increments will be smaller and $15 will be reached by 2021. The wage increases apply only to fast food chains with at least 30 locations in the U.S.

The Effect: None yet, since the measure still must be approved by the state’s labor commissioner. Experts predict other types of businesses that employ low-wage workers, like retailers or landscapers, will have to increase wages to compete with fast food restaurants.

Seattle

How it Happened: Mayor Ed Murray made increasing the minimum wage one of his first priorities when taking office at the start of 2014. In May of that year, he put forth a proposal to increase the city’s minimum wage from Washington state’s rate of $9.32 to to $15 over several years. The city council approved the measure a month later.

The Plan: Workers at large businesses with 500 or more U.S. employees will see their wages hit $15 per her hour by 2017. Workers at businesses with fewer than 500 U.S. employees will reach that rate by 2021. After the hikes, large businesses will have to keep increasing wages to keep pace with inflation.

The Effects So Far: The first stage of Seattle’s plan went into effect in April 2015, with large businesses raising their minimum wage to $11 per hour and small businesses’ wages rising to $10. So far, the effects are largely anecdotal. Some local restaurants have raised prices from 4 to 21%. In nearby SeaTac, where the minimum wage for some workers jumped to $15 per hour last year, there hasn’t been any measurable economic fallout.

San Francisco

How it Happened: City residents voted by a large majority to raise the city’s minimum wage from $10.74 to $15 last November.

The Plan: Wages have already jumped to $12.25, and will increase to $15 by 2018. After that, the minimum wage will increase every year at a rate tied to the consumer price index.

The Effects So Far: This year’s wage increase boosted the pay for as many as 86,000 workers, most of whom were women and minorities, according to one estimate. However, at least one local bookstore said it would close due to the increased costs.

Los Angeles

How it Happened: The Los Angeles city council voted in May to increase the local minimum wage to $15 by 2020, up from the current $9. This week the Los Angeles County Board of Supervisors also voted to increase the minimum wage to $15 for people working in unincorporated parts of the county.

The Plan: Workers will earn $10.50 per hour starting next year, with incremental increases until they make $15 in 2020. The hikes are delayed by a year for workers at businesses with 25 or fewer employees. After reaching $15, annual minimum wage increases will be tied to the consumer price index.

The Effects So Far: Because many cities in L.A. County, like Pasadena and Long Beach, haven’t yet committed to matching the county’s wage increase, prices for goods and services at stores very close to one another could become highly skewed.

Washington, D.C.

How it Might Happen: Residents of the nation’s capital will vote next year on whether to increase the minimum wage to $15 from the current $10.50.

The Plan: The minimum wage would increase to $15 per hour by 2020 and would afterward be tied to increases in the consumer price index.

TIME Economy

How a Good Government Can Beat Bad Debt

Bremmer is a foreign affairs columnist and editor-at-large at TIME.

It’s not the size of the debt that counts. It’s the ability to manage it

The one major country more deep in debt than Greece is one you might not expect: Japan. Greece’s debt-to-GDP ratio is a staggering 173%, according to the International Monetary Fund. Japan’s debt-to-GDP ratio? 246%.

Yet despite major challenges, Japan has options and a dynamic economy, while Greece is on life support. That’s in part because it’s not the size of the debt that counts. It’s the ability to manage it. That’s a useful motto to remember when comparing one country’s debt burden with another’s.

Unlike Greece, Japan has control of its own currency, allowing policymakers a lot more flexibility in dealing with an economic slowdown. Japan can choose between stimulus and austerity in ways that Greece, locked inside the euro zone, can’t. And while the overwhelming majority of Japan’s debt is owned by Japanese institutions and individuals who remain committed to financing the government, Greece’s creditors are overwhelmingly foreigners.

But Japan is also simply better governed than Greece. Estimates vary on the scale of tax evasion in Greece and its impact on the country’s economy, but at the end of 2014, Greeks reportedly owed their government about $86 billion in unpaid taxes. That’s a big problem in a country where tax revenue represents nearly a quarter of GDP.

A primary function of government is to ensure “rule of law.” Property rights are protected, contracts are enforced, and corruption is punished. For 2014, the World Justice Project ranked Japan 12th in the world on rule of law, between Canada and Britain. Greece ranked 32nd, between Georgia and Romania. In the same report Japan was ranked as the 11th best country for absence of corruption, while Greece was 34th. Greece was 49th in order and security; Japan was No. 1.

As a result, investors have much greater confidence that Japan can manage its debt. That’s why Japan’s 10-year bond yield stands at about 0.4%, and Greece’s yield is at about 11%. It’s cheaper and easier for Japan to borrow the money to finance spending that can boost growth, which adds to tax revenue and helps manage the debt.

It’s not how much you owe. It’s whether you can handle it. And that depends on the quality of your government.


This appears in the August 03, 2015 issue of TIME.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY stocks

Why Precision and Investing Don’t Mix

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Heidi Marie Rice—Getty Images

Some fields work with amazing precision. Investing is not one of those fields.

NASA’s New Horizons spacecraft passed by Pluto last week, which is amazing. It was a three-billion mile trip that took nine and half years.

But here’s what blows my mind. According to NASA, the trip “took about one minute less than predicted when the craft was launched in January 2006.”

That is astounding. In an untested, decade-long journey, NASA’s travel forecast was 99.99998% accurate. It’s the equivalent of forecasting a trip from New York to Boston and being accurate to within four millionths of a second. (Your move, Google Maps.)

This is a great reminder that some fields work with amazing precision. They are governed by pure math and physics, and aren’t burdened by the whims of human emotion.

It’s also a great reminder that investing is not one of these fields.

Investing is often taught as if it’s something like aeronautical engineering. It’s filled with precise equations that give exact answers in the way you would calculate, say, how long it takes to fly to Pluto. Seriously, look at this stuff.

Traders calculate moving averages and support bands. Economists create forecasting models to tell us how much GDP will grow this year. Chief market strategists model what the S&P 500 will do in the next year. The bulk of academic finance is based on the idea that if we try hard enough and crunch enough numbers, we can grab capitalism by its horns and forecast what will happen next. And I shake my head at that idea.

Sometimes I say, “Well Morgan, maybe you just don’t understand this stuff.” Which is true! But the evidence is overwhelming that those who wield complicated investing math don’t understand it, either. A novice would never think stocks falling is a once-in-a-billion-year event. You need a Goldman Sachs forecasting model to think that. A normal person would have a hard time losing everything during the booming late 1990s. You need a team of Nobel Prize winners to do that. Find me one person who has gotten rich investing with his mathematical chops and I will show you nine who blew themselves up, plus 20 bumpkins who became rich using simple rules of thumb.

There are two types of stupidity. One is simple ignorance. The other — far more dangerous — is brilliance so deep that you assume it applies to unrelated fields. At the center of every financial catastrophe is the latter; a genius whose forecast was mathematically unassailable right up to the moment of bankruptcy. It wasn’t that their math was wrong. It was that their clean math didn’t apply to the hormonal jungle of finance.

One of biggest investing lessons I’ve learned is that the more precise you try to calculate, the further from reality you’re likely to end up. Precise calculations creates a spell of overconfidence, which makes you double down on whatever you want to believe no matter how wrong it is. Some examples are staggering: Wall Street’s top market strategists predict each January how much the S&P 500 will go up over the following year. Their collective track records are worse than if you just assumedstocks go up by their long-term history average every year.

In a messy world of emotions and misinformation, broad rules of thumb can be an excellent strategy.

Rules of thumb aren’t perfect, of course. But that’s their advantage. By starting with a strategy you know isn’t perfect, you naturally leave yourself room for error, and are more flexible in accepting the market’s whims.

So I don’t use fancy valuation models to calculate how much stocks should return over the next 10 years. I assume 6% a year after inflation over the long haul. I figure that’s good enough.

I don’t forecast what the market will do this year. I assume the market will go down half of all days, a third of all years, and a fifth of all decades. That’s probably good enough.

I don’t predict what the economy will do this year. I assume we’ll have a recession every five to seven years. Good enough.

Don’t bother me with calculators that show me how much money I’ll have in 30 years. I don’t know what my bills will be next month. I save as much money as I reasonably can while living a lifestyle that I’m content with. I figure that’s good enough.

Spare me with your analysis of why I should own stocks from some country because of economic trends. I’m diversified, and accept part of my portfolio will always be doing worse than others. I figure that’s good enough.

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MONEY Economy

Here’s How Hillary Clinton’s Profit Sharing Plan Could Actually Make Everyone Richer

Democratic Presidential candidate Hillary Clinton speaks during a town hall event at Dover City Hall July 16, 2015 in Dover, New Hampshire. Clinton spoke about how to build an economy that will boost the middle class.
Darren McCollester—Getty Images Democratic Presidential candidate Hillary Clinton speaks during a town hall event at Dover City Hall July 16, 2015 in Dover, New Hampshire. Clinton spoke about how to build an economy that will boost the middle class.

Hint: Employers need to share more than profits.

Whatever you may think of Hillary Clinton, her profit sharing proposal introduced last week was a very smart piece of politics. It addresses two concerns that are really on the minds of voters, especially Democrats, and it threads a tiny needle of public values.

The first is that people who aren’t at the top of the income distribution haven’t done very well in the years since 2001: Real wages are either flat or down, depending on what measures you look at; job insecurity remains high; hours of work are up; and so forth.

The second is the growing awareness that while wages have stagnated, profits are up, and a much bigger proportion of the national pie is going to owners and investors now. A related issue is that since the 1981 recession, employers have asked employees (especially unionized employees) to make sacrifices in down periods to help business, yet there didn’t seem to be any upside for employees when things improved.

Profit sharing addresses these concerns while navigating around a political hot button. A policy that would explicitly redistribute money from the rich to the poor would likely elicit howls of “class warfare” from Republicans, and the idea of loading another burden on employers doesn’t play that well with many Democrats, either. But a program that shares the gains that employees and employers produce together, and that gives them both an incentive to produce more—well, that sounds fair.

The idea that employers should share profits with employees as a way to secure the cooperation of workers and create incentives for them to work hard probably goes back to ancient civilizations, but the US incarnation seems to have begun with Frederick Taylor’s “scientific management” approach of the 1920s, which led to time-and-motion-studies and the modern factory system. Taylor argued that employers should share profits with workers to get them to follow orders more or less like a robot. Employers like most everything about Taylor’s model except the profit sharing part, which didn’t really take off.

However, something similar temporarily caught on in the 1950s, in the form of an arrangement that came from Joseph Scanlon, a machinist who later became an MIT instructor. Scanlon’s sensible idea was that workplace performance would improve dramatically if employers and employees cooperated with each other. The program he developed, known afterwards as Scanlon Plans, had employers share profits with workers—but, crucially, they also shared information about the business operations, including finances, through a series of employee/management committees that worked on ways to improve productivity. Scanlon plans were quite popular through the 1970s but faded quickly after that. (I discuss other historical shifts in the employer-employee relationship in my new book.)

So what does that history tell us about Clinton’s plan? It demonstrates some of the limits of profit sharing as a means of addressing the slow growth of employee compensation—and also where the opportunities lie.

The first limit is that profit-sharing per se doesn’t seem to improve employee and business performance. Most employees figure out quickly that their individual contributions barely affect company profits, so working harder to try to improve your profit payout doesn’t make sense. Profit sharing seems to matter only when it is combined with increased employee participation in decision making and an approach to management that persuades them that “we’re in this together.” The requirement that employers share more information and engage employees in decision making appears to be what stunted Scanlon plans in the 1980s, and may be a big hurdle for profit sharing plans now as well.

The second limit is the fact that a great many companies already have profit sharing plans. That is especially so if we count retirement plans that include profit sharing. A tax break will induce more companies to use profit sharing plans, but just how many more is not at all clear. How much of the tax break might go to companies that already had profit sharing plans? Certainly some of it will, in which case, nothing changes for employees, and those employers get a windfall from the tax credit.

The third and most important limit is that these plans may not actually increase employee compensation because they may come at the expense of other forms of pay. If a profit sharing plan on average raises pay by 10% per year, for example, some employers will try to get away with paying salaries that are 10% lower. As a result, even in cases where profit sharing plans do give employees an upside when a business turns out to be very successful, they come with an intangible cost in the form of risk because they make pay more variable over time. That might be fine if profit sharing is just an add-on to the pay employees would have received. But on balance it’s a bad thing if it becomes a substitute for predictable wages.

The big plus of the Hillary Clinton proposal is that it might create some interesting conversations in board rooms as to why companies don’t already have profit sharing plans, and what would be required to make them succeed—namely, more sharing of information and decision making. That could happen even if the profit sharing proposal never becomes law, and would be a good thing all around.

Read next: Clinton’s Capital Gains Tax Plan Focuses on Long-Term Growth

Peter Cappelli is the George W. Taylor Professor of Management at the Wharton School of the University of Pennsylvania and director of Wharton’s Center for Human Resources. He is also the author of numerous books, including his most recent, Will College Pay Off?: A Guide to the Most Important Financial Decision You’ll Ever Make.

TIME Economy

More U.S. Children Live In Poverty Now Than During the Recession

US-CALIFORNIA-POVERTY-HOMELESS
MARK RALSTON--AFP/Getty Images Three year old Saria Amaya (L) waits with her mother after receiving shoes and school supplies during a charity event to help more than 4,000 underprivileged children at the Fred Jordan Mission in the Skid Row area of Los Angeles on October 2, 2014.

African-American, American Indian and Latino children are particularly hard hit

In mid-September 2010, almost exactly two years to the date since the monumental collapse of Lehman Brothers, the New York Times published a bleak statistic: the ongoing Great Recession had driven the U.S. poverty rates to their highest in a decade and a half.

Five years of fitful economic recovery have not yet bettered this situation. According to a new report from the Annie E. Casey Foundation, more than one in five American children, about 22%, were living in poverty in 2013. Data for 2014 are not yet available, but the report anticipates that the child poverty rate remains at an “unacceptably high [level].”

The figure for 2008 was 18%.

General terms are insufficient when explaining the economy’s post-recession rebound. There are a number of conflicting statistics — the fall in unemployment versus the rise in poverty, for instance — but even efforts to compare and assess these inconsistencies do not successfully capture the nuances at hand, most of which are dictated by demographic cleavages built on racial lines.

Noting only a “few exceptions,” the report states that “on nearly all of the measures that [it] track[s], African-American, American Indian and Latino children continued to experience negative outcomes at rates that were higher than the national average. Overall unemployment rates have fallen, but the unemployment rate for African-Americans is currently 11 percent — 2.4 percentage points higher than where it was prior to the economic crisis. Nearly 40 percent of African-American children live in poverty, compared to 14 percent of white children.

“The fact that it’s happening is disturbing on lots of levels,” Laura Speer, the Casey Foundation’s associate director for policy reform, told USA Today. “Those kids often don’t have access to the things they need to thrive.”

The Casey Foundation is a philanthropic group that seeks to enable underprivileged children to overcome hardships in pursuit of a brighter future. The foundation is based in Baltimore, a city where systematic inequities contributed in part to a series of protests and demonstrations this past spring.

Read next: Why America is Falling Behind the Rest of the World

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