The Millennial vote pushed Obama into the White House almost two years ago, helped by a remarkable alignment of values (optimism, change, yes we can), savvy online fundraising and Millennial-targeted marketing. Young voters went for Obama 2:1 over McCain in an election that appeared to signal a generation-long political realignment.

Twenty-three million young adults voted in 2008. Today there are even more Millennial voters, but early indications suggest the Gen Y vote will not be as unified as in 2008.

• NYT data through July 2010 (left) shows Gen Y is not as keen on either the Democrats or Obama as they once were. Just 50% of those born after 1981 approve of the President, down from nearly 3/4’s in early 2009.
• Pew Research data through April 2010 shows that the bounce Obama gave the Dem’s in terms of Millennial party affiliation (again defined as those born post-1981) has reverted to pre-election levels.

I tend to doubt Millennials will move to the polls in November to express their unhappiness, as they tend not to be  a generation given to loud complaining or extremes. But there is evidence that, like many older Americans, they are unhappy with the economy, and worried about their ability to afford the current government spending spree.

CNN reported that young investors are becoming much more conservative than they were 10 years ago. In fact, young investors today are more conservative than any other generation.  Just 22% of investors under age 35 say they are willing to ‘take a substantial risk’ with their investments, down from 30% in 2001 and the lowest of any age group. Normally this is a group that is most willing to take risk as they have time to recover should something go really wrong. The data suggest they think things have already gone really wrong and aren’t optimistic about near term recovery.

The WSJ reported last week that non-college educated Millennials are especially stressed, both financially and socially. In an article titled “The Generation That Can’t Move Up“, the Journal uses compelling statistics paint a bleak picture of working class young adults who are increasingly constrained in their life choices, delaying marriage, having more children while cohabiting due to a lack of confidence about their ability to maintain steady work, and dropping out of religious traditions faster than their college educated peers. The article, written by a sociology professor and the director of an research institute on marriage, concludes this way:

“What happens, then, when the job-market conditions that once allowed most high-school educated American to connect tot he rest of society through hard work, marriage and religious participation no longer exist? Will working-class young adults begin to devalue marriage and religion, or will they fiercely hold onto these ideals because their values are all that they have left? Will their social disengagement leave them vulnerable to political appeals based on anger and fear?”

Statistics like these suggest that the Democrats have some work to do if they want to maintain their edge among young voters. Obama and his advisors would do well to investigate how to re-engage young voters with messages that resonate with Gen Y issues.

At the same time, Republicans have an opportunity, but to capitalize on the disillusionment, but it will require more than running against the status quo. They must articulate what they are for and how it will benefit young Americans directly.

Attack ads, which are likely to be a standard tactic this Fall for both parties, are unlikely to do anything than drive further apathy and distrust among Millennials. In fact, Millennials are distrustful of extremes. Research by Millennial-research firm, Civic Sciences, revealed they tend to shy away from even the polar ends of rating scales. And they don’t like it when advertisers bash their competition, so why would they find negative political ads compelling?

As the Obama campaign proved two years ago, Millennials will respond to positive approaches and new ideas.

A report by the research group, AmericanProgress.org, details the results of a survey on Millennial attitudes toward government. They conclude:

Despite their relatively positive outlook [toward government], though, Millennials do share their elders’ concerns that the federal government is often poorly managed and spends money inefficiently, the survey found. Young adults are particularly receptive to a reform agenda that would strip wasteful spending and focus on improvements in the delivery of government services. Millennials will reward politicians who adhere to these principles with their votes.