Are American Millennials Rich or Poor? Either Way, They Want Help Getting Out of Debt

Are American Millennials Rich or Poor? Either Way, They Want Help Getting Out of Debt

Millennials now make up the largest age cohort in the US workforce, so employers have an interest in understanding the needs, preferences, and concerns of this generation in order to effectively attract, retain, and develop millennial talent. A common belief about millennials is that their consumption patterns and lifestyle choices are markedly different from those of previous generations: living with their parents longer, getting married later or not at all, and buying homes and automobiles at lower rates. A stereotypical view that has thus emerged of millennials is that they are simply choosing not to do the things their older peers expected them to do in their early careers. The growing consensus among observers of the economic data, however, is that the main reason millennials aren’t behaving like their baby boomer and gen-X predecessors is that they are not as well-off as these generations were at the same point in their lives, thanks in large part to having come into the workforce during and after the Great Recession of 2007-2009.

In the past few weeks, two studies have come out that complicate both of these narratives about millennials, but conflict in how they depict this generation’s financial health. The first is a working paper by Federal Reserve Board economists Christopher Kurz, Geng Li, and Daniel J. Vine, titled “Are Millennials Different?” Yes and no, the economists conclude:

Relative to members of earlier generations, millennials are more racially diverse, more educated, and more likely to have deferred marriage; these comparisons are continuations of longer-run trends in the population. Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth. For debt, millennials hold levels similar to those of Generation X and more than those of the baby boomers. Conditional on their age and other factors, millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations. (Emphasis ours.)

In other words, the paper debunks the idea that millennials are buying fewer houses and new cars because they want to live lower-consumption lifestyles, and instead supports the view that they just haven’t accumulated the wealth to afford these big purchases. On the other hand, economist Alison Schrager argues at Quartz that the Fed data can also be read a different way, and that millennials “are in fine shape, maybe even richer than previous generations, but they have just chosen to invest in different assets”—i.e., higher education:

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The Talent Ramifications of the Brexit Deal (or No Deal)

The Talent Ramifications of the Brexit Deal (or No Deal)

The UK’s planned exit from the European Union is fast approaching, and a new deal over the terms of that exit faces an uncertain future in the UK parliament. Whatever happens, there will be talent implications for employers and HR leaders in the UK and Europe. Below is our broad look at the background of the process and terms of the latest proposed deal, and what the potential consequences could be — viewing several key issues through the lens of HR, including immigration, employment law, and the risks of a no-deal Brexit.

Fast Facts

  • The UK will formally exit the European Union on March 29, 2019, marking the deadline for UK and EU negotiators to reach a deal on an orderly Brexit transition. UK Prime Minister Theresa May has reached a draft agreement with the EU that would provide for a 21-month transition period, after which the UK would be able to control immigration from the EU, while backstop measures would allow the UK to remain in the EU customs union and enable a soft border between Northern Ireland and the Republic of Ireland if a final trade deal is not reached by December 2020. The transition period could be extended once, into 2022, if the UK and EU agree to do so.
  • A scheduled Parliament vote on the deal with the EU was delayed on December 10 after the May government realized the agreement would most likely be rejected. May then survived a confidence vote two days later, and plans to continue lobbying for the deal, which will not be scheduled for another vote in Parliament until sometime in January.
  • May’s deal, as drafted, would preserve the free movement of labor between the UK and other EU countries for the duration of the transition period, while any EU citizens living in the UK before the end of that period would have a right to stay, but would have to apply for residency documentation. Afterward, EU citizens would no longer have special privileges in immigrating to the UK. May has proposed a skills-based system for admitting immigrants after Brexit, but some business leaders and the National Health Service fear this system will leave them short-staffed in roles that would not qualify as high-skill under May’s scheme but for which native talent is in short supply.
  • The UK government has pledged to uphold employment laws based on EU regulations after Brexit, but some of these laws may be partly amended to be more flexible for employers or to reduce their liabilities. Unions, however, fear that these protections may be weakened substantially.
  • If there is no deal by the March 29 deadline, the UK will face a “messy” exit from the EU—likely causing severe economic disruptions. In the event of a no-deal Brexit, the UK would revert to trading with Europe under World Trade Organization guidelines, reintroducing customs and border controls. A no-deal Brexit can be expected to hurt the pound and cause instability in the British financial sector, which could spread to continental Europe and the rest of the world.
  • In a no-deal scenario, the government has promised that EU citizens’ immigration status would not change before 2021, but it remains unclear what employers will have to do to ensure that their European employees are able to continue living and working in the UK. Many businesses have put contingency plans into action to protect against the consequences of a no-deal Brexit, but most HR managers in the UK are underprepared for this scenario. In any case, Brexit is expected to result in a labor supply shock and make it more challenging for UK employers to fill job vacancies.

Background

On June 23, 2016, citizens of the UK narrowly voted to withdraw their country from the European Union. The “Brexit” referendum sent a shockwave through the British, European, and global economies, and prompted concern and uncertainty at many organizations in the UK and abroad.

Conservative Prime Minister Theresa May, who came to power shortly after the referendum in 2016, has worked to cut a deal with Brussels that preserves the UK’s strong trade ties with the EU, but has also stressed that no deal is better than a bad deal as far as her government is concerned. UK and EU negotiators deadlocked over several key points where London and Brussels are at cross-purposes, and uncertainty over whether and how these obstacles will be overcome has been a major source of anxiety for UK businesses over the past two years.

Chief among these issues are immigration and the free movement of people between the UK and the rest of the EU. May has stressed the need for the UK to “take back control” of its borders, even if it meant losing access to the EU’s single market. Free movement of people is one of the “four freedoms” underpinning that single market; the UK wants to preserve free movement of goods, services, and capital, while regaining the right to restrict immigration from the EU. For its part, Brussels has resisted creating new forms of special treatment for the UK that would make Brexit easier, partly to discourage other EU countries from pursuing exits of their own. Another, related area of disagreement is the border between the Republic of Ireland and Northern Ireland, which forms the UK’s only land border with another EU country. Many businesses on the island of Ireland have supply chains that cross that border every day and employees living on both sides of it; creating a hard border with customs and immigration controls would be costly and complicated for these organizations.

The deadline for reaching an agreement is March 29, 2019. If no agreement is reached, the UK will “crash out” of the EU and trade with the bloc under World Trade Organization guidelines. May announced on November 25 that her Brexit negotiators and their counterparts in Brussels had reached a draft agreement that would solve some of these challenges.

A vote on the deal in the UK Parliament had been scheduled for December 11, but May called it off one day before when it was clear that the deal was going to be rejected. Many MPs opposed the agreement, claiming the proposed Brexit is too hard or not hard enough, or because they believe the country should hold another referendum on the question before proceeding.

Prime Minister May said on December 10 that she would ask the EU for new “reassurances” on the deal, and in particular the backstop plan for the Northern Ireland border, which many MPs said they opposed. The EU has maintained they will not renegotiate the agreement, however. May’s government offered no specific timeline as to when there would be another scheduled vote in Parliament on this or any revised deal — but has said it will not happen until January. There is also a January 21 deadline to present the deal to Parliament. May survived a confidence v

Here is a broad outline of what might happen next and the key issues HR leaders need to understand:

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For Retailers, Attracting Holiday Staff Means More than Just Raising Pay

For Retailers, Attracting Holiday Staff Means More than Just Raising Pay

Facing one of the tightest labor markets in living memory, US retailers and other companies staffing up for the holiday season have had to get creative about finding and attracting the extra workers they need for the seasonal rush. Some retail chains started hiring for the winter holidays all the way back in the early summer, raised entry-level wages for store employees, and offered a variety of bonuses and perks like store discounts.

The retail sector was already feeling pressure to bump up pay, the Star-Tribune reported this week, citing a survey by the hiring platform Snag that found retailers expected wages to rise by 54 percent this year. That’s partly a product of a labor shortage, but also reflects the growth of online shopping:

As more shoppers order online and opt to have items shipped to the store or their front door, retailers’ backroom operations are changing. Mass merchants still need cashiers, salespeople and shelf stockers. But they need more people to package orders for store pickup and to work in warehouses and distribution centers, which increasingly requires more technology skills.

Target is doubling the number of staff it needs to handle digital orders. Macy’s, which is hiring about the same number as last year, will shift its mix and add 5,500 more people for its fulfillment centers. Best Buy says it, too, will bulk up on workers to package up online orders.

Labor market competition, the need to attract and retain more skilled employees, and “HR-as-PR” considerations are all coming to bear on retailers’ decisions to raise pay for their hourly employees. They are also courting hires with new benefits, including intangible benefits like flexibility, Steve Bates notes at SHRM:

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Labor Department Proposes New Rule for Multi-Employer Retirement Plans

Labor Department Proposes New Rule for Multi-Employer Retirement Plans

The US Department of Labor on Monday published a proposal for a new regulation governing multi-employer 401(k) plans. The proposed new rule would make it easier for small businesses to offer retirement plans to their employees by broadening the criteria under which organizations can form multi-employer plans, Employee Benefit News explains:

The arrangements are currently allowed for employers with an affiliation or connection, such as companies with a common owner or members of the same industry trade association. Under the proposed rule, MEPs could be formed by associations of employers in a city, county, state or a multistate metropolitan area, or in a particular industry nationwide, according to the DOL.

Sole proprietors, as well as their families, would be also permitted to join such plans, the DOL said. Professional employer organizations, which are human resources companies that contractually assume certain employment responsibilities for its client employers, could also sponsor plans.

The proposal comes in response to an executive order President Donald Trump signed at the end of the summer, directing his administration to remove barriers to small businesses offering retirement benefits through the multi-employer plans. Employees of smaller organizations are less likely than those at large firms to be offered employer-sponsored retirement plans.

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More US Companies Encouraging Employees to Vote This Year

More US Companies Encouraging Employees to Vote This Year

Anyone in the US who has recently had a work meeting derailed by their coworkers talking politics knows that the elections coming up on November 6 are attracting far more attention and interest than midterm elections normally do. The political environment in the US remains highly charged and polarized, while these elections are seen as having particularly high stakes. Poll watchers are expecting voter turnout to be high, partly helped along by a growing number of employers giving their workers paid time off to vote on Election Day. Beyond that, Washington Post columnist Jena McGregor reports, they are actively encouraging their employees to go out and vote:

At Cava, the Washington D.C.-based chain of Mediterranean fast-casual restaurants, its 1,600 workers will get two hours of paid time off to vote on Election Day this year if they request it in advance, a nationwide perk for its workers. For the first time, Tyson Foods, the meat company, has launched a company-wide voter registration initiative, with many of its plants participating in an effort to register employees and offer details about early voting, absentee ballots and voting locations. Levi Strauss & Co. has named volunteer “voting captains” in each of its offices and distribution centers to hold registration drives and educate workers; it’s also giving employees, including retail workers, paid time off to vote.

Organizations that give their employees time off on Election Day, whether they make it a holiday or simply let staff take a few hours off to vote, do so for a variety of reasons. At some companies, this decision stems from a culture of social responsibility; at others, it may be part of an effort to improve their public image. Though few companies take public positions in favor of a particular candidate or party, still others may be hoping that their employees vote a certain way. It could also help boost employee engagement and perceptions of the organization; a recent study by O.C. Tanner found that US workers who get time off to vote have more positive things to say about their employers than those who don’t, HR Dive reported last week:

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Will Amazon’s Minimum Wage Hike Shake up the Labor Market?

Will Amazon’s Minimum Wage Hike Shake up the Labor Market?

On Tuesday, October 2, Amazon announced that it would raise its internal minimum hourly wage for US employees, including part-time workers and those hired through temporary agencies, to $15 an hour. This includes workers at the company’s warehouses or “fulfillment centers,” as it calls them, in addition to store employees at Whole Foods, which Amazon acquired last year. The e-commerce giant also said it planned to lobby the US government to raise the federal minimum wage from its current hourly rate of $7.25, last updated in 2009, the New York Times reported:

The new wages will apply to more than 250,000 Amazon employees, including those at the grocery chain Whole Foods, as well as the more than 100,000 seasonal employees it plans to hire for the holiday season. The change will not apply to contract workers. It goes into effect on Nov. 1. “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” Amazon’s chief executive, Jeff Bezos, said in a statement. “We’re excited about this change and encourage our competitors and other large employers to join us.”

The move came amid growing pressure on Amazon from the media and politicians regarding its pay practices and the work conditions of its lowest-paid employees, particularly those at its warehouses or “fulfillment centers.” Vermont Senator and former presidential candidate Bernie Sanders has been an outspoken critic of Amazon’s CEO Jeff Bezos, who is currently estimated to be the wealthiest individual in the world, citing news reports that large numbers of Amazon’s low-wage employees were dependent on public assistance. Sanders and California congressman Ro Khanna have been pushing legislation that would require companies to compensate the federal government for the cost of public assistance benefits received by their employees, including food stamps, Medicaid, and public housing.

The next day, however, Bloomberg reported that Amazon was cutting monthly bonuses and stock awards for hourly employees to help offset the costs of the minimum wage hike. Still, the company insists that these workers’ total compensation is rising:

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Men Making Up Larger Share of Stay-at-Home Parents in US

Men Making Up Larger Share of Stay-at-Home Parents in US

A new analysis of US Census Bureau data by the Pew Research Center finds that stay-at-home fathers are becoming more common, suggesting a slow shift in parental roles that Pew says is driven by more than just economic considerations:

The stay-at-home share of U.S. parents was almost identical to what it was in 1989, but there has been a modest increase among fathers. The share of dads at home rose from 4% to 7%, while the share of moms staying at home remained largely unchanged – 27% in 2016 versus 28% about a quarter-century earlier. As a result, 17% of all stay-at-home parents in 2016 were fathers, up from 10% in 1989, the first year for which reliable data on fathers are available. …

However, the long-term uptick in dads at home is not driven solely by economic factors. The modest increase is apparent even after excluding those who were home due to unemployment. Furthermore, a growing share of stay-at-home fathers say they are home specifically to care for their home or family, suggesting that changing gender roles may be at play. About a quarter (24%) of stay-at-home fathers say they are home for this reason. Stay-at-home mothers remain far more likely than dads to say they are home to care for family – 78% say so.

Pew also finds that Millennial parents are more likely to be at home with their children than Gen X parents were at the same age in 1999-2000, with a particularly significant jump among fathers from 3 to 6 percent. A larger proportion of Millennial dads are staying home deliberately to care for family, rather than as a result of unemployment or for some other reason.

Identifying “stay-at-home parents” is increasingly difficult in the era of remote work and the gig economy, which Pew acknowledges. Parents are defined as “stay-at-home” based on their employment status during the year prior to the survey, which is similar to how the Census Bureau categorizes them:

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