No group in America has been hit harder during the current recession than young adults. Millions of Americans are graduating from college with virtually no money, lots of debt and with very dim employment prospects. Those who don't go to college are even worse off. All their lives these young Americans were taught if they studied hard, got an education and worked within the system that good jobs and the American Dream would be waiting for them. But now millions of them are realizing that all of their studying and hard work is not providing them with the rewards that they always thought they would get. This is causing large numbers of young American adults to become depressed and disillusioned. In fact, record numbers of them are moving back in with their parents. But without decent jobs, what are they supposed to do?
There are all sorts of grim stats at the end of the post to underscore the primary point. While statistics can always be skewed, after all of these years where I (and obviously countless others) have talked about working longer it is pretty clear that if people in their 60s are working longer because they have to and the unemployment rate has gone up then gen y will have more obstacles getting out of the starting blocks.
A point I have been making for months, and this too I think is obvious, is that if this was/is the worst financial crisis in 80 years there will be fallout and consequences for many years.
37 comments:
Roger,
Those comments about the grim situation facing current Gen-Y grads sound strikingly familiar to the ones seen in the early 90s when Gen-X was coming out of college. Being an early-90s grad myself, I remember the situation quite well. Interestingly, that was also a post-crisis (banking and real estate) period. Is this becoming an every generation thing? :-)
John
John,
there have been plenty of articles out there tying the financial crisis into all sorts of past events; coming off the gold standard, WWII, all sorts of past events so maybe it is all one event???
In my estimation, patience and creativity will be required. As the economy goes through another binge and purge cycle, it's the older, more expensive employees whose jobs are shed, making it more difficult for those over 60 to continue working in traditional, full-time jobs. Younger (Gen somethings) will eventually fill those vacated slots, but with lower pay and fewer benefits.
As we've discussed before, our entitlement programs will be strained and future generations may well have to adapt to a lower standard of living. Older folks will have to buy backhoes or find other crative avenues to make ends meet.
The part about "All their lives these young Americans were taught if they studied hard, got an education and worked within the system..." needs to be changed to "... got an education and worked hard within the system..."
I'm shocked at the 20somethings treating their job like high school and college. That they can come and go as they please without consequences. Its definately a problem with how they were raised and I blame their parents completely.
As for not having jobs... I see TONS of help wanted signs here in Colorado for fast food and retail. I can't blame them for not wanting those jobs but I can blame them for not taking them.
I think the only way out of this problem will be the next generation. As Generation Y wakes up and learns how to manage their finances they will have to learn the hard way and teach Generation Z better.
I don't really remember job issues like this in the early 90s. The only thing I do remember was the collapse of the job market for law students in the early or mid 90s.
I'm not sure how one would call the early 90s recession a crisis. It was pretty mild.
This raises an oft-overlooked reality--that a traditional liberal arts education is a waste of money and time for most people.
Individuals and society as a whole would be better served if we'd de-emphasize the importance of 4-year schools in favor of technical and trade schools. What's more valuable to our country? A person who spends a year learning to be a master welder, or a person who spends 5 years learning about English literature?
On top of the intrinsic value of the knowledge, there's the huge debt burden (bore by the individual and the taxpayer) you mentioned that comes with the traditional college.
Time to remove the stigma from trade schools, and encourage young people to study something useful.
Eric,
This is a great comment. I agree with one point and disagree with another.
When I was in college, 1985-89, some said to me there are only three undergrad majors; accounting, engineering and everything else. So nothing new in terms of the value of most majors.
Learning a trade as part of a college prep highschool education is a point I have made a couple of times before (not claiming originality) and I agree s/b part of the curriculum.
When comparing education systems among developed countries, 4 year universities are usually our greatest strength. Moving to tech/trade schools kills TONS of science and research (I'll point to the browser, webserver, and internet that you're currently using).
That said, I still strongly discourage people from LAS degrees unless business is considered part of LAS at the school they are attending.
Rhinna32 - the reason people with 4 year degrees don't take fast food type jobs is that those jobs earn less than unemployment. For me, for instance, it would not make financial sense to take one of those jobs until my unemployment were exhausted (if I didn't have a job now).
I think this is part of a larger trend. The world is equalizing living standars, albeit slowly. As those in China, India, and other developing countries increase their standard of living, ours is drawing back - at least in industries that we outsource like manufacturing. We are starting to see Adam Smith's beliefs come true where nations are specializing. If a college grad focuses on areas that we specialize like tech or healthcare, then they stand to experience a higher standard of living. If someone expects a manufacturing career, then they are competing with the Chinese and Indians directly. That does not bode well for their future.
I also think we have gotten a bit lazy as Americans. The boomers focused a bit too much on consumption. I also agree with Rihanni32 that the Gen Y kids feel entitled to instant success and wealth compared to previous generations. However, the market tends to "instruct" people on how to live. We may find attitudes change over time. We will probably find new attitudes toward saving and work.
Kirk, you are in business for yourself as am I. I wonder if the solution will be/has to be more education of the risks of going out on your own paving the way for more young people to do that.
I know people that are about my age who simply cannot bring themselves to step out like this but more of the younger Gen Ys will have to.
I probably wasn't clear about one point. I think 4-year schools are a waste for most people, but not a waste in themselves. Traditional schools are incubators for S&T, like you said Stephen. The problem is that we've convinced ourselves that every kid needs to go to college. Not only are most people not well-suited to the disciplines best-served by 4-year schools, but their presence waters down the curriculum for the kids who SHOULD be there.
I did both. I got degrees from a technical school, and then a 4-year college. I make my living (a pretty good one) based on the skills I learned at the tech school. I don't really use (or remember) much of what I was taught while I got my bachelor's degree.
Incidentally, I paid my brother-in-law's tuition, room, and board for his entire college career. But I would only do it after he agreed to study something tangible, which turned out to be mechanical engineering. But I wouldn't have wasted my money if he'd insisted on studying sociology.
SD: My previous post was cut a bit short and wasnt as defined as I would have liked. I was running the risk of being late to work this morning, rather ironic as I was ranting about that.
I agree with your reasoning. If a person has a chance at unemployment that pays better then a fast food job I can understand. In fact next Monday I will be out of a job myself. A pretty typical situation in the IT industry contract world.
The 16-19 year olds from that article that dont have the crappy job dont appreciate a good one when it comes along after college. There is a big expectation issue with how the workforce works. I've been a hiring manager in a couple companies between 1999 and now. Its interesting/shocking to me how the next generation views a job as. I have to wonder if I am not turning old and bitter though lol.
I also agree on the jobs in the 90s. I graduated high school in 1993 and I dont recall there being problems with a lack of jobs.
All generations have some blame in generation Y's financial status. Their grandparents arent letting go of the jobs. Their parents didnt teach them about financial responsibility. They themselves arent taking responsibility for their own actions, until after the cards are maxed. It will take all generations to get us out of this mess.
Eric: I partially agree and partially disagree with that. If a person knows what they want to do then a TS would be good. A 1 year TS in your example also has the benefit of not racking up 4 years of debt and they could go to the first TS, test the market, change their mind and go to a second TS and still come ahead. 4 year degrees have way too much emphasis.
Where I disagree is on the hiring side of things from the employer's point of view and perhaps thats where the focus of your point about society needing to rethink education. I looked for college grads, not for a specific degree, but because it tells a lot about a person. They can stick to a commitment, complete assignments on time (at least enough to graduate), and are able to think in a variety of areas assuming they took electives and multiple class subjects.
Granted that this is coming from the IT field that moves so quickly that degrees 5 years about werent offered for jobs needed today. Its so specialized that its virtually impossible to have specific expereiance on the skills and software that a company needs.
Now thats not to say a person who went to a trade school is stupid, cannot learn, or cant stick to a commitment. Far from it. Again if a person can target in on exactly what they want they are better off probably then the generic 4 year college grad.
Perhaps a mixing or merging of the two education systems could work best.
This is a good discussion.
Mind you, I heard many of the same points being made about education, lousy economy, etc. when I was moving from college to work back in the early 1970s. The more things change....
(Yeah, so I'm an antique.)
Our daughter studied math and now teaches it. Our son did chemistry, worked in the field a few years and became a full-time musician, which he has been for the past 5 years or so. His income, of course, fell and he adjusted his lifestyle accordingly. (By the by, his liberal-arts education hasn't hindered him.)
Neither has moved back home. Both are happy.
Maybe the end isn't nigh, after all.
BillM
BillM you may consider yourself an antique but you offer a different generation's viewpoint which I find to be critical. Its easy for me at 35 to tell it like it is lol. But I want to hear how both those older and younger then me think on things.
I addressed a variation on this topic recently within a presentation at a local university.
Back in the day, for most folks life's expectations were relatively modest. There were strong high school and community college vocational programs that produced competent tradesmen, university training was classic and not social policy oriented, and the extended family unit (with warts, for sure) was prized. The Ten Commandments were taken seriously by society.Work,itself, was prized and the trades were honorable and not put down as a last resort if one did not want to attend college. Today, quite a different story. There is shock and awe when "entitlements" that were once luxuries and now expected at an early age are not readily accumulated. Joy in labor? Let someone else do it.
One point in the presentation I made was that in the final analysis, it is not how good you are but how mediocre everyone else around you performs that will determine much of your career advancement. Just showing up, to paraphrase Woody Ellen, is not 85% of success in life.
Taking a job you have must, and not necessarily want to, is a situation I suspect that most of the readers here have experienced.Taking responsibility for one's actions and not pawning blame elsewhere is a midset that will propel most individuals forward to ultimate success - which is not primarily possession-based.
T
I have seen numbers that suggest that Gen-Y in the US has a much lower (half) unemployment rate than the same generation in Spain (40%). It always could be worse.
great discussion everyone, thank you.
underlying this, but i am biased, is that people need to create their own solution (take care of their own mat) and take time to enjoy the journey.
As for the Spain comment the equivalent of U3 there is 20% so 40% for Gen Y, if correct, would not be shocking.
Eric...
"I think 4-year schools are a waste for most people, but not a waste in themselves."
The kicker for me is that, statistically, people with a 4 year degree make much more money, have longer lasting, happier marriages, and are much more satisfied/happy with their lives.
Now - before you say it - I know, I know, there are a thousand variables there. But my default advice to someone is to go to college. To me, college just really expands your horizons, hooks you up with tons of people you'll probably still keep in contact with 20 years later, and also helps you deal with real life (getting apartment, paying bills, etc.).
Anyway, this is probably a religious-type argument, right?
The other funny thing I notice today is people's ages. I tend to be old for an "internet guy" as the internet didn't get popular until I was out of school, but as people drop hints in their posts here I find it amusing that a lot of posters are younger than me!
This decade's unemployment has so many consequences.
These days if you want a job you need to have done that job before. Companies aren't training people at all.
If you want to work fast food, you need to have experience with fast food, and you need to sell them on the idea that you'll be long-term at their company.
And if people aren't retiring, then promotions aren't happening either.
Rhianni32 - I understand and mostly concur with what you're saying about the benefits of looking for a college degree when screening applicants. I wonder, though, if the college experience isn't really as valuable as it used to be. When I went, in the early '90s, most of us left home, lived on campus, got jobs to pay for books and food, and basically disconnected from our previous lives (with the exception of holidays spent at home).
These days, I see graduates who've never really gotten past their high school lifestyles. They often live at home or in quarters paid for my their parents, they've got computers and cell phones that put them into a state of perpetual childhood (because they never really break away from mommy and daddy), and honestly I don't think their held to a very high academic standard in many of the liberal arts programs.
So I wonder if the college experience still deserves the props we give it.
Stephen - Funny, as I began reading your post, I was thinking, "causation, causation, causation." But you saw that counter-point coming. But I'm on board with the idea that college can provide some good life experience. I'd argue that 4 years in the Marine Corps provides more and higher quality life experience, but we're not telling all our kids that they're somehow failing if they don't join The Corps.
But it seems like we mostly agree on this. To me it comes down to this: College is good, but the cost-to-benefit ratio is not favorable for many/most people. For those people, there are more efficient and beneficial avenues, such as trade school, the military, the Peace Corps, or whatever.
Note to self...when ranting about our education system, it's best to proofread your comments before posting them.
"Hard Work" most misused expression in the American/English language?
Some do, a lot need to, most do not.
I second Eric's note to self. Geelty of saem.
Nice topic initiation today, Roger.
T
Great discussion everyone.
The last 15-20 yrs have left the "average" American with no increase in income except for inflation. I see that in everyone around me. My father worked very hard and was able to have a good middle-class life. I work hard but can't afford a nice middle-class home without my wife.
The new coming dilemna is the cost of education in the future. It's not unusual for a student to have $50,000 in loans and a job that pays $40,000. They may have to start the backhoe business while they're young.
People may not be real smart, but they are not stupid. They see CEO's, sports figures, actors, politicians...all making gobs of money and not working very hard. Even Sara Palin, a spokesperson for the average American, now makes5-6 million per year. We have no good role models for our youth.
"The last 15-20 yrs have left the "average" American with no increase in income except for inflation."
I see no way that can be true. Got facts to back it up?
Keep in mind that the idea of a "nice middle class home" has change in a BIG way. I have a nice middle class home - that is twice as big or more as my parents home. Most of my friends have bigger houses than me; I just refuse to pay what they pay.
Some people say that college graduates make XXX hundred thousand dollars more in their lifetimes and therefore a college degree is worth XXX hundred thousand dollars, minus the actual cost of the degree. The cost-benefit analysis is more complicated. The average college graduate would make more than the average college non-graduate even if he just drawled into a hole for 4 years before joining the work force; as the average college graduate is, certainly, smarter and has more initiative than the average college non-graduate.
So you're saying that he was smart enough to realize the advantages of a college education! Heheh
Woe is me. (how do you spell woe????)
Working hard is great, but I'm with Woody Allen 85% is just showing up!!!!
When I had a house built you would be surprised how many contractors just did not show up when scheduled.
When I had my motor home supposedly "fixed" today they just did not do and could not do what was scheduled. I need to go back in 2 weeks.
Technical jobs by conscientious individuals are underrated.
A tow truck driver who goes out in the evening or an AC repairman willing to work nights and weekends can start a business that will eventually employ dozens of people and subsequently enjoy weekends on a boat or whatever.
Yes the economy is bad, but economic cycles will never stop unless we get Mr. Bubble Greenspan leading the fed for a decade again.
My advice as an older guy who got an engineering degree in the 70's is go in to an area of expertise (1 yr or 4 yr degree) where you can for see yourself in your own business.
I am not aware of Bill Gates or Steve Jobs as having anything but honoree degrees (because colleges want to kiss their ass for donations). I think they are both still solvent.
SEG
Interesting Woody Allen quote, T and SEG. I believe it.
My wife works for a large university hospital. Their food service division always has jobs open. No-skill jobs (that involve taking food to patient rooms) pay almost double minimum wage and provide full benefits. All people have to do to keep these jobs is A) pass a pre-employment drug screening, and B) show up for work on a regular basis.
Those jobs are always open because they can't get people to meet those two basic requirements.
I will tip my anonymous poster mask a bit and admit to being a Gen Y'er ;)
One thing that hasn't been mentioned at length is that many people around my age bought houses as soon as they could, since prices were obviously going to go up forever until you couldn't afford it. This corresponds with the top of the housing market... I personally took a lot of pressure from friends and family to buy a house. Eventually to defend the sanity of choosing to rent, I created a housing calculator program which would plot buying versus renting for different scenarios. That let me answer for the 100th time questions like 'but your missing the tax write offs don't you know?' The older generations thought they were giving Gen Y'ers great advice...
This group also paid the most ever for a college education, and they "paid" it with loans.
I read an article a year or so ago that said that when 18-20somethings say they are "looking for work" that breaks down on average to about 1 hour a week of surfing the internet and putting in electronic applications. LOL!! Not a lot of sweat or shoe leather lost on the endeavor.
I think the only solution is a big dose of personal responsibility and protestant work ethic. If there is 20% unemployment then that should barely hinder you if you are in the top 5% in delivering value and top 5% in effective job searching.
On an adjacent topic, have you read "Early Retirement Extreme"? Quote: "I saved around 75 per cent of my income in order to retire early. Sometimes more, sometimes less.
My budget is slightly over $500 a month. Almost half of that is rent, but I could decrease that by moving out of California. You could make that kind of money with a part-time job as a burger flipper or a greeter..."
http://monevator.com/2010/04/23/extreme-saving-for-retirement/
Tried to look at at least most of the comments. One thing that hits me is that we need both degree'd people and ones who have practical skills.
It doesn't seem as though the educational system in our country is trying to address that problem. I live in a fairly small area in rural Nevada yet I cannot learn welding from the local Community College. They are happily creating new cops and accounting staffers. That's it and I think it's sad!
Don: One thing I can add to the education system. My girlfriend is a 1st grade teacher. At least in Colorado, there is a shift in thinking and education. For generations the general thought is to get kids ready for factory type jobs. Obviously not specific factory skills in elementary school but in how a child's learning process is shaped. A rigid learning system of scheduled breaks, specific lessons at specific times, discipline and how they are taught to listen to authority figures.
The shift now is that the US isnt an industrial based economy anymore. Additionally with the internet these days, district administrators are focusing more on teaching kids how to think critically in determining the truthfullness of information and how to learn new skills. With the speed of new jobs sectors popping up thats probably pretty key.
Thats not to say that schools never taught critical thinking, just where the focus is being shifted too.
With that in mind I think that a increased focus of 4 year colleges will occur and not more TS that we have been discussing.
Someone commented about "being kind of old for an internet guy", LOL. Hey, I'm 63 and retired.
I agree that a 4 year degree isn't the answer for everyone and we do need good technical people.
Back in the 60's I understood that technology and science were where the good jobs were going to be.
I graduated in 1967 with a two year degree (AS/ET). I had four job interviews and three offers (IBM, GE, and P&G).
Things changed during my career but I changed with them. I stayed in that one company for 34 years until I was offered early retirement (8 months early!)
Ken
Being the oldest of the Gen Y I fell i should comment. I do agree that financial illiteracy is plaguing this generation, but it gets worse every generation. We no longer teach basic financial skills in schools, or anywhere else, because banks would stand to loose billions if we wised up. Ask any financial executive in a large credit card company and they should tell you that their most profitable customers are the bottom 50%. So as long as big lobbies run the country there will be no financial education in schools. They profit by keeping people in the dark. Although I do agree that many of us should pick up a finance book once in a while it simply doesn’t happen, they are all to busy chasing that degree and low paying dead-end salary gig.
Secondly, the gray ceiling is widespread. Older generations have a right to work like anyone else but they can’t retire now, leaving a bottleneck in these companies to move up. If workers could retire and pass along their businesses this would create millions of job openings.
Thirdly, multinationals have brought us into global trade and will continue to offshore and eliminate jobs with technology and cheap foreign labor as fast as they can; their only motive is shareholder return and could care less about your career. These reasons and many others convince me that my generation will in fact do much worse than their parents if they continue to play the salary game, work for these sociopathic CEO’s, buy into the overinflated college game, and continue to play the game developed by the fat cats in Washington.
Post a Comment