We’ve been hearing a lot of mixed messages lately about the outlook for young graduates: some pundits point to an improving job market and bright futures, while others lament a tougher-than-ever economy.
Whatever the case, there seems to be some evidence that after the dust settle from graduation and the life in “the real world” begins, young people are entering what TheStreet calls “the poverty class” in an new article.
Here are some indicators they give of this new class of impoverished young people, what are termed “emergency cash products:”
- Prepaid debit cards: 51% of those making less than $25,000 in annual income reported using prepaid debit cards within the last year. The percentage was the same for those who earned $50,000-$74,999.
- Check cashing services: 34% of respondents who earn less than $25,000 reported using check cashing services, while almost as many in the $50,000 – $74,999 range (29%) turned to check cashers.
- Rent-to-own stores: 15% of respondents making less than $25,000 and 17% of those who earn $50,000-$74,999 reported using rent-to-own stores.
- Pawn shops: 29% of respondents who earn less than $25,000 reported using pawn shops compared to 21% of respondents making $50,000 – $74,999.
I’ve never had to use any of these services myself, but I am certainly no stranger to tight finances.
It’s tough out there for new graduates and costs associated with “starting out on your own” are astronomical these days (see this blog post about moving I wrote when I came to York). So I’m not surprised at all to read some of these statistics.