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 Kids Are Alright: Generation Z Will Probably Do Just Fine in the Workforce

The Kids Are Alright: Generation Z Will Probably Do Just Fine in the Workforce

As millennials grew into the largest generation in the workforce over the past few years, we’ve been treated to a deluge of breathless media coverage about how uniquely difficult they were to deal with and how they were ruining everything. From chain restaurants to jewelry, along with job loyalty and the 9-to-5 workday, the list of American institutions millennials are charged with killing is nearly endless. Meanwhile, business leaders have wrestled with the seemingly vast complexities their entry to the workforce has created. Most of the work-related challenges have proven to be more myth than truth, as our research at CEB (now Gartner) has found, along with other investigations by the Economist and the Pew Research Center, but the conventional wisdom endures that millennials are entitled, need constant hand-holding, and are therefore unusually hard to manage.

It appears the newest generation entering the workforce, Generation Z, is being similarly prejudged, according a recent survey of managers profiled by SHRM’s Dana Wilkie. In it, 36 percent of managers said they believed that Generation Z would be more difficult to manage than previous generations, while 29 percent believe it will be more difficult to train employees from Generation Z, 26 percent say it will be more difficult to communicate with the newest generation, and even 20 percent of millennial managers believe Generation Z represents a threat to company culture.

“There is a tendency and expectation of instantaneous gratification,” said Jeff Corbin, CEO of APPrise Mobile, the employee communications company which conducted the study. “They want the answers now. They are all about tweets and short responses. As a result, many Gen Zers are going to be too quick to respond rather than deliberate and thoughtful. … [T]he concept of professionalism, formality and quality in communications may be a foreign one to many in Gen Z, which could be problematic to older generations.”

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What Is a Millennial, Anyway?

What Is a Millennial, Anyway?

Ask any three people to define who they are talking about when they refer to “millennials,” and you’re apt to get at least four different answers. Generational boundaries are always somewhat blurry, but this generation seems particularly hard to pin down. Demographers usually define millennials as everyone born between the early 1980s and the late 1990s, or sometimes the early 2000s, but the lines are not hard and fast.

Meanwhile, the difference in life experience between a person born in 1982 and one born in 1998 is substantial: For one thing, the former remembers a time before the Internet, while the latter is a genuine digital native. For another, the older millennial was already in the workforce during the financial crisis of 2008, while the latter was still in grade school. Those are some of the key differences that lead Jesse Singal at Science of Us to wonder whether the millennials are not in fact two distinct generations, which he dubs Old Millennials and Young Millennials:

Old Millennials, as I’ll call them, who were born around 1988 or earlier (meaning they’re 29 and older today), really have lived substantively different lives than Young Millennials, who were born around 1989 or later, as a result of two epochal events that occurred around the time when members of the older group were mostly young adults and when members of the younger were mostly early adolescents: the financial crisis and smartphones’ profound takeover of society. And according to Jean Twenge, a social psychologist at San Diego State University and the author of Generation Me: Why Today’s Young Americans Are More Confident, Assertive, Entitled—and More Miserable Than Ever Before, there’s some early, emerging evidence that, in certain ways, these two groups act like different, self-contained generations.

One of these differences concerns the stereotype of the millennial job hopper, which persists despite not really being borne out in labor market data. Singal, who was born in 1983, adds that his life experience and that of his contemporaries don’t fit that narrative:

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