Millennials: Generation Screwed?
November 19, 2015
In 2012, a Newsweek article posed the question: “Are Millennials the Screwed Generation?” According to Joel Kotkin, the author of the article, the newest generation of today’s youth has been left to “handle their parents’ fiscal profligacy and economic mismanagement.” Between indebted baby boomers refusing to leave the workforce, high incidence of underemployment, and a toxic legacy of public debt, the young have been hit the hardest following the Great Recession and are, as a result, doomed to follow a path of economic hardship.
By Megha Agarwal, W’18
A quick look at past statistics shows us that Kotkin’s hypothesis might not have been far from the truth. According to the U.S. Census, the median net worth of those under the age of 35 fell 37 percent between 2005 and 2010, whereas those above 65 took only a 13 percent hit. The youth unemployment rates (ages 16-24) remained around 15.5 percent in 2013 and began 2014 at 14.2 percent, roughly twice the rate of overall unemployment. If that is not enough – another statistic from Pew Research illustrates millennials’ dire situation: in 2010, the share of young adults ages 18 to 24 employed (54 percent) had been its lowest since the government began collecting these data in 1948.
Given this, is it all true? Did the Great Recession leave our generation of millennials with the lasting title of “Generation Screwed,” or are high unemployment rates, growing personal and public debt, and economic instability going to slowly transform into problems of the past, leaving millennials revitalized and unconquerable? Are the hardships surrounding millennials simply over-exaggerations and extensions of a rough period of American volatility, or is our generation truly headed towards a tragic, economic downfall?
It is clear that the U.S. labor market is still struggling to recover from the effects of the Great Recession. This opinion is one that is widely shared and accepted, with seven-in-ten Americans agreeing that today’s young adults face more economic challenges – both personal and public – than previous generations did when they were first starting out. Millennials are entering adulthood with record levels of student debt; two-thirds of recent bachelors degree recipients have outstanding student loans, with an average debt of about $27,000. In contrast, two decades ago, only half of recent graduates had college debt, and the average fell at almost half of what it is today, $15,000. Moreover, the day-to-day realities of economically tragic times have hit hard. Fully half (49 percent) of those ages 18 to 34 say that because of economic conditions over the past few years, they have accepted a job they did not truly desire, in an effort to remain financially stable. More than a third (35 percent) say they have gone back to school or began to pursue a degree due to the state of the economy, and one-in-four (24 percent) reveal that they have taken an unpaid job simply to gain work experience.
For some millennials, tough economic times following the Great Recession have led to troubled personal lives as well. Roughly a quarter of adults ages 18 to 34 (24 percent) say that, due to economic conditions, they have moved back in with their parents or extended family in recent years after living on their own. The economic hardships of millennials may also be a reason that so many have been slow to marry. The median age at first marriage is now the highest in modern history — 29 for men and 27 for women. In contrast to the patterns of past generations, when adults in all socio-economic groups married at roughly the same rate, marriage today is more prevalent among those who are older, have higher incomes, and have had access to more education. All in all, there tends to be agreement — from an economic and social perspective, things are harder for those just starting out today than they were a generation ago.
However, while the recession affected many dimensions of economic life—wages, savings, home values, debt — public attitudes about future earning potential have remained remarkably stable. In fact, despite the endless stream of unfavorable statistics, it seems as if millennials are putting aside their financial burdens and approaching their long-term economic prospects with optimism and confidence. More than eight-in-ten millennials say they either currently have enough money to lead the lives they want (32 percent) or that they expect to in the near future (57 percent), and about six-in-ten millennials (61 percent) oppose benefit cuts as a way to address the long-term funding problems of Social Security — a view held despite growing worries regarding complete depletion of Social Security system funds by the time millennials are ready to retire.
Moreover, despite coming from debt-stricken positions, young adults and millennials are shedding substantially more debt following the Great Recession than previous generations, a success due largely to the changing technological environment and decreased need for luxuries such as cars and multiple permanent residences. From 2007 to 2010, the median debt of households headed by an adult younger than 35 fell by 29 percent, compared with a decline of just 8 percent among households headed by adults ages 35 and older. Also, the share of younger households holding debt of any kind dropped to 78 percent, the lowest level our nation has seen since the government began collecting this data in 1983.
Finally, not only are young people and millennials optimistic about their own financial futures, but they also are confident that their children will be better off financially than they are now. Among those 18 to 29 years old, about two-thirds (65 percent) are optimistic about their children’s financial future, while among those just slightly older, 30 to 34, less than half (46 percent) are as hopeful.
Given the above, it is clear that the recession has taken its toll on the nation’s millennials, but it is also evident that the title “Generation Screwed” is one that has been shrugged off by the majority of young adults. Not only are millennials approaching their future with fixated determination and resiliency, but they are simultaneously adopting positive attitudes and effecting palpable change. Only six years following the official end of the Great Recession, it may be too soon to predict the definitive impact of the financial crisis on our nation’s millennials. That being said, the instability of previous years by no means dooms our generation of millennials to a lifetime of stagnation, downward mobility, and economic slump.
 The economic plight of millennials” (Federal Reserve Bank of Atlanta, EconSouth, January–April 2014)
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