It’s graduation time in America, and there’s good news, and there’s good news for home builders in current population data on educational attainment. And there may be eye-opening news, for some builders, as well.
First, the good news, with a twist.
More millennials are college graduates. This is true on a percentage basis and in an absolute basis as well, which is good news for builders. Why?
For two big reasons. One, is that they’ll make more money faster in their work lives. The other is that they’re going to be more unemployment-resistant than non-college graduate.
Have a look at the figures on the pay gap growing between college grads and their high-school diploma-only peers:
The economic analysis finds that Millennial college graduates ages 25 to 321 who are working full time earn more annually—about $17,500 more—than employed young adults holding only a high school diploma. The pay gap was significantly smaller in previous generations.2 College-educated Millennials also are more likely to be employed full time than their less-educated counterparts (89% vs. 82%) and significantly less likely to be unemployed (3.8% vs. 12.2%).
We’ve learned, though, that that pay advantage comes with a cost, with strings attached, and that’s the twist. This report notes that, for seven out of 10 grads of public or non-profit colleges, they hit the hard real-world of young adulthood with a $30,000 student loan obligation. Here’s how that looks on a state-by-state basis.
The next piece of data that might be considered good news for builders is that if four in 10 workers in 2016 has a college degree, that still means that a solid majority–60%–have entered the labor force with a high school diploma, or some college under their belts.
You hear often, “Everybody’s going to college these days,” as a reason fewer and fewer people are opting into opportunities to learn construction labor skills. Well, here’s data, especially relevant as regards young male adults, that suggests that the potential pool of people who’d make for a next generation of skilled trade laborers is not shrinking. Here, from Pew Research:
Among employed men ages 25 to 29, the share of college graduates rose from 29% in 2000 to 36% in 2016 – a considerable increase, but still smaller than that seen among young women. Consequently, the gender gap in college attainment among young workers grew to 10 percentage points in 2016.
This gender gap is driven in part by the fact that young women are more likely to finish college than their male counterparts. In 2016, among 25- to 29-year-olds, women were 7 percentage points more likely than comparable men to have at least a bachelor’s degree.
So, when it comes to an outlook on the future chronic constraint in skilled labor, the challenge is not in the size of the population capable of filling that need. It’s in inspiring pursuit of those skills as a career.
The potentially eye-opening new news on the 25 to 29 year-olds’ educational attainment trends is this. The gender gap is widening. More women are college graduates than men of the same age, and that disparity is increasing.
The future of work, of households, and of housing preferences and values is different than the past. We’re in the middle of that change now, and the differences are showing up in who makes decisions.
Your Millennial home buying decision-maker, much more often than not, is a young woman. The question is, does your business model, and your designs, and your marketing, messaging, sales, and customer care program reflect that shift?
