Millennial Generation: Part 1
Super-Millennial: Generation Y to Save Our Economy?
Deleveraging, or reducing debt, by corporations, the populous and the government is key to recovering from the Great Recession of 2008. Economic recovery after similar recessions has historically taken 10 to 15 years. In 2009, we penned a piece to clients explaining how corporations deleverage first, then the populous, and lastly the extended government. The effects of this long, protracted process will be felt well beyond the full recovery. A new generation will be called upon to make sacrifices and choices to assist in hopefully pulling the American economy onto a sustained path. The generation that will come to the rescue is generally referred to as lazy, entitled, delusional and apathetic. They are also incurring more debt through education than previous generations, and releasing less of their hard-earned money into the economy.
Although these are just a few of the depictions used to describe those belonging to Generation Y, a recent UBS report views Millennials in a different light, referring to them as “the most fiscally conservative generation since the Great Depression.”1 The report found that the impact of the Great Recession on Millennials is similar to the impact of the Great Depression on their grandparents, the G.I. Generation, born between 1901 and 1924. In this way, it’s no surprise that those belonging to Generation Y and their grandparents have comparable saving habits.
Millennials vs. Baby Boomers
Who are the Millennials? Millennials are the 20 to 30 something’s born between 1980 and 1993, who came of age during the turn of the millennium. They are the most ethnically and racially diverse cohort, politically conservative, socially liberal, expressive and open to new things.7 They are the tech-savvy, social media-having group, more so than their elder counterparts. In fact, three-quarters of Millennials participate in social-networking, compared to half of Baby Boomers.3
Economists look to the Millennials to provide economic growth and support for our Baby Boomer generation. Born between 1946 and 1964 at 79 million strong, Baby Boomers account for 26% of the population. Boomers are currently reducing their hours worked and attempting to move into semi or full retirement. According to Pew Research Center, for the next nineteen years, 10,000 Baby Boomers will turn 65 daily. By 2030, everyone born during this era will have joined the rest of the sexagenarians.2 As Boomers move into retirement they will be placing an increasing burden on Social Security and Medicare systems. In order to relieve some of the strain, America needs its younger generations to step into the workforce to generate more tax revenue that will contribute to the already depleting Social Security pool. There is only one problem: a majority of Millennials are underemployed.