'Strapped': The Cost of Debt
In Strapped: Why America's 20- and 30-Somethings Can't Get Ahead, author Tamara Draut doesn't hold back in revealing the growing debt burdens facing low- and middle-income households. We asked her about how these financial burdens are impacting this generation's career choices.
CASE FOUNDATION: Strapped discusses the financial pressures facing young people -- college loans, credit card debt, and more. How does that affect their career choices?
TAMARA DRAUT: It certainly increases the pressure to go into more lucrative paying professions, as opposed to deciding on a career based on your interests, passion, or talents. It can also tilt the balance toward accepting a job that pays well but has little opportunity for advancement versus a job with lower starting pay but the higher potential for advancement. One survey found that about 17 percent of young people with student loans had changed careers because of their debt. Young people with high student loan debt -- one out of four college graduates has more than $25,000 -- are also less likely to pursue graduate school, which has become a standard requirement in many professions to move up the ladder.
CF: Is it too early to see how this trend will affect, or is affecting, the ability of nonprofits and government agencies to attract talented employees? If so, what does the future look like for those sectors?
TAMARA: I think the verdict is somewhat mixed on whether rising student debt is impacting the ability of nonprofits to attract and retain new talent. My sense is that this may be more of a problem with retention -- that it's becoming harder to keep young people in the nonprofit arena as a career choice because the earnings potential is much lower. For many in their early 20s, a low-paying first job may be doable, but as they get older and have aspirations such as buying a home, getting married, and starting a family, a nonprofit salary may not be feasible. This is especially true in high-cost metropolitan areas where rents and home prices have significantly outpaced incomes.
CF: What has been the reaction to the book? Does it strike a nerve with students and young professionals?
TAMARA: The response has been overwhelmingly positive. The book definitely strikes a chord with young people, who often tell me that reading my book is like reading about their lives. Even more exciting are the emails I've gotten from people who say the book has inspired them to pay attention to public affairs and to vote. I've also received emails from parents of 20- and 30-somethings who tell me that my book has given them a better understanding of what's happening to their children. And certainly, many 20- and 30-somethings tell me they plan to give the book to their parents to read.
CF: What are your main recommendations for addressing these challenges?
TAMARA: First, we've got to end the debt-for-diploma system. We know what works: It's time to shift back to grant-based aid and pressure states to keep tuitions low. Second, we need to create more good jobs. We need to invest in earn-and-learn programs that help young people who aren't on the four-year college track move up the job ladder to better paying jobs. And we need to raise the federal minimum wage. Third, we need to build "the village" and finally provide young families real supports offered in every other industrialized nation, such as paid parental leave and affordable child care.
CF: Your book covers the high costs of raising a family, buying a house, paying off loans, and simply living. What's the good news?
TAMARA: I think there is a lot about this generation that we should see as good news. The first is that today's new parents are much more likely than the Baby Boomers to emphasize family life, particularly over their work life. Young men, in particular, are embracing fatherhood more. In survey after survey, young fathers today report they'd be willing to work for less money in order to spend more time with their family. Unfortunately, the United States has done very little to help people be both good parents and good workers. Another bit of optimism is that the Millennials, those aged 18 to 24, look to be much more politically engaged than their predecessors, Generation X. This generation drove the record-breaking turnout of the under-30 vote in both the 2004 and 2006 elections. That's a very good development.
For more information:
Strapped: Why America's 20- and 30-Somethings Can't Get Ahead
The Leadership Deficit -- report by the Bridgespan Group on the nonprofit sector's dire need to attract and retain skilled senior executives
Partnership for Public Service -- a nonprofit promoting government service for talented Americans
* * * * * * *
Tamara Draut is director of the Economic Opportunity Program at Demos, where she oversees research, policy, and advocacy work on issues related to economic security and mobility. Her research has been covered extensively by dozens of newspapers and magazines, including The New York Times, The Washington Post, Newsweek, BusinessWeek, the Chicago Tribune, The Wall Street Journal, and USA Today. Her writing has appeared in the San Francisco Chronicle, The Boston Globe, and the Boston Review. She is a frequent television commentator and has appeared on the Today Show, ABC World News Tonight, CNN's Lou Dobbs Tonight, and Fox News. Tamara holds an M.P.A. from Columbia University and a B.S.J. from Ohio University.
