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American Economy So Awful Parents Now Buying Franchises to Keep Adult Children Employed

By helaineo |

The American economy is so awful, the Wall Street Journal reports that parents of means are now resorting to buying franchise businesses to keep their adult children employed, shelling out  six figure sums to purchase their little darlings Pita Pit restaurants and College Hunks Hauling Junk moving trucks:

Watching fellow college students working for $7.50 an hour after graduation, Tana Walther, a fashion-design major at Kent State University in Ohio, snapped up an alternative offered by her father — to run a Pita Pit restaurant he would buy.

“I guess I bought her a job,” says her father, Jan Walther, of North Canton Ohio. Prospects of a career in fashion seemed remote, and Tana, a college athlete, loved eating at Pita Pit restaurants while traveling with her track team. Her first new restaurant opened last year near campus in Kent, and the 25-year-old hopes to open several more.

Before we all let out a collective “yuck” let’s take a look at what’s driving the trend.

First up, of course is the economy. According to the Pew Research Center, unemployment among those aged 18-29 is higher than it has been in decades, with job offers for new college graduates half of what they were in 2007. Applications to law and business schools are soaring as students, desperate to find a safe harbor during the Great Recession, decide to use the time to burnish their credentials for when the economy improves. Even non-paying internships have become so competitive that enterprising charities are making a mint auctioning off gilded gigs at Vogue and other prestige firms.

However, evidence is mounting that more and more parents are beginning to rebel at paying the ever-soaring tab for higher ed, with a study recently released by Countrywide Financial finding the number of moms and dads who say college is a good investment in their child’s future earning potential has dropped dramatically since 2008. As the Wall Street Journal notes:

Many parents see business ownership as a better bet for their kids’ future than a graduate degree. And in this era of renewed interest in entrepreneurship, some parents I interviewed described it as a way of recapturing for their children a stake in “the American dream” — the opportunity to control their destiny and have a chance at gaining wealth.

Moreover, a recent survey by Merrill Lynch of affluent Americans (defined as those with investment assets of at least $250,000) found that one-third were currently supporting at least one adult aged child, with 28% doing so to help maintain the child’s standard of living and another 21% saying their son or daughter was unemployed, and need the aid. If you are already giving your adult children funds from the First National Bank of Mom and Dad, it isn’t a huge logical leap to then decide it is better to give the money in the form of a business rather than in the form of a no-strings attached hand-out.

Then there is the impact of books like The Millionaire Next Door, which posit that the quickest path to riches is not a load of high falutin’ degrees, but a business of one’s own. Of course, the book’s authors, Thomas Stanley and Wiiliam Danko, also argued that giving money to adult children is a fast way to to the poorhouse for both parent and child but but that’s not a message many current moms and dads  – used to calling up schools to complain about their children’s grades and otherwise engaging in checkbook parenting — are likely to heed.

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Photo: Pita Pit

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About helaineo

helaineo

helaineo

Helaine Olen's writing has been published by The New York Times, The Washington Post, The Wall Street Journal, Salon.com, AlterNet.org and LiteraryMama.com, where she is an associate editor. Her first book, Office Mate: The Guide to Finding True Love on the Job will be published this fall. She lives in Hastings-on-Hudson, New York.

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3 thoughts on “American Economy So Awful Parents Now Buying Franchises to Keep Adult Children Employed

  1. JBoogie says:

    I get your point, but I don’t think parents helping kids out financially is anything new. My grandparents (dad’s side), for about five years, lived in my great-grandfather’s above-the-barn loft because it’s all they could afford. My great-grandmother gave them food and made them and their babies (my dad and aunt) clothes, and my grandpa helped out with the horses in return, while pumping gas and driving a truck to put himself through college. My mom’s mom moved in with her parents with three kids when my grandfather was deployed in the Korean War. My dad’s parents put him through college and then my grandpa’s firm hired him–where he’s now the VP of the company, 25 years later. But when they first got married, right out of college, not only did my grandpa’s firm hire him, but they lived in a house that my grandparents owned, rent free. My parents have definitely helped my sister and I out getting through college and getting started with our own families. One day I told my mom “I’m gonna pay you back” when she filled up my gas tank for me, and she said “No you’re not–you are gonna help your son one day. That’s all you need to do.” Maybe it’s a Southern thing–we tend to stay involved (meddle) in everyone’s lives–but I’m thankful for it. You learn how important family is when they are the only reason that you and your babies aren’t on the street…or actually in the barn, instead of above it. :)

  2. [...] American Economy So Awful Parents Now Buying Franchises to Keep Adult Children Employed Helaine Olen [...]

  3. Theresa Froehlich says:

    I can understand why parents of financial means would buy up businesses so their adult children will be employed. In some situations, this may be a very empowering move; in other situations, this may perpetuate finanicla dependency.
    As I was researching for the book I am writing to show parents how to let go, I’ve come across many of the stats mentioned in this blogpost. One thing American parents still have to learn is that deprivation and suffering are not necessarily bad things. They are very character-building. In the end, these young adults will develop far more ego strength by struggling through hardships.

    Theresa Froehlich
    Certified Life Coach, Writer, Speaker
    http://www.transitionslifecoaching.org

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