Unemployment is the story of year, and by now we all know young adults are suffering most. Several new studies show just how much pain they are enduring.
The Lumin Collaborative, an association of PR firms just released a study of 1,000 Millennials, ages 18-27, focused on understanding their changing expectations of the workplace. The study shows nearly all have been either directly or indirectly affected by unemployment.
- Over half (55 percent) have experienced a layoff or loss of work in their family within the past year.
- Nearly three-fourths (72 percent) feel threatened by a possible layoff or loss of work in the coming months.
- Two-thirds (66%) say they have lowered their expectations of being promoted. This compares to 51% among other workers.
Given the deep reach of the recession, it’s not surprising that economic worries are top of mind with Gen Y. A mobile survey of over three hundred 18-24 year olds reported this week by Engage Gen Y revealed the overwhelming concern is “The Future. College. Jobs. The Economy“’. One 24-year-old male said: “Jobs and our future are a big concern. We are a really talented bunch that just happens to be at the height of our ambition at the exact time the economy is hurting.” This finding was confirmed by a recent Harvard poll (reported by Don Tapscott’s blog).
“The economy is unquestionably the top national issue of concern for young people today. Almost half of 18-29-year olds today (48%) say economic issues are their foremost concern, more than double the second highest issue (health care: 21%) and nearly five times the third highest (War: 10%).”
With sentiment this strong, it won’t be long before Millennials start to direct some of their influence, clout and energy toward Washington.
Obama came into office on a wave of Millennial optimism and good feeling. While Gen Y so far as remained fairly silent about his performance, the Harvard poll suggests they are losing confidence in the government’s ability to resuscitate the economy: “More young Americans now believe that the government’s efforts will hurt (30%) rather than help (26%) their financial situation. The majority, 41 percent, say these efforts will have no impact.” John Della Volpe, the Director of Polling for the Institute of Politics at Harvard, says the numbers show that “If nothing else, this generation is fiercely independent and should not be taken for granted. Young people are no longer outliers — their opinions of Obama fall in line with rest of USA.”
For many Millennials, who in addition to unemployment are suffering from crushing college debt, jobs alone will not be enough to right their financial ships any time soon.
The average debt for a graduate is now $23,000. Many also have credit card debt exceeding $3,000. Without relief from the burden of hundreds or thousands of dollars a month in loan repayments, it will be difficult to get their lives moving forward again. Little wonder a Vanguard blog recently christened Gen Y, ‘Gen D for ‘Debt’. The impact of the double whammy of no job and high debt is millions of lives set on hold. According to a study by Alliance Bernstein, 34% of those who graduated with college debt have had to sell personal possessions to make ends meet. More significantly for our collective economic recovery, they are deferring the usual life events that trigger spending and economic growth: 18% have delayed getting married, 44% have delayed purchasing a house, and 28% have delayed having children (see chart). Other deferments include medical procedures, home repairs, car repairs and more.
Source: Alliance Bernstein
Coincidentally, According to the U.S. Department of Education , the total outstanding federal student loan debt exceeds $500 billion.
That number sounds a lot like the kind of numbers we hear when Washington talks about the economic stimulus. I recently posed a question to Paul Solman, the financial journalist for NPR’s NewsHour via Twitter and their web site:
“Question: Why isn’t some of the stimulus money being earmarked for college debt forgiveness, which would put money in the pockets of those most likely to spend it?”
He replied that it had been considered and shouldn’t be ruled out, but the idea currently has no momentum. That tells me it may not be such a dumb idea after all….
I am a marketer, not an economist or politician. But it seems to me that a transfer of funds from the government to loan programswould be less complicated and surer to work than costly ‘jobs creation’ programs.
The impact of this action on Millennials would be immediate. Once released from the increasingly desperate burden of finding a job and paying down debt, this creative generation could set about generating new businesses, jobs and and economic activity. Unlike the rest of us who would be likely to save a windfall, Gen Y would spend it — smartly — for the benefit of all.
That’s my big idea. Gen Y, what do you think? Are you ready to mobilize?
