Recessions have consequences, and the Great Recession of 2008 may have produced one of the most influential consequences of all: the millennial mindset. Because of their early experiences in the “real world,” this generation is poised to have long-term significance — comparable to baby boomers — in work, play and politics. If you think boomers drove changes, just wait and see what millennials have in store. To put it in millennial terms, “Hold my avocado.”1
It’s been more than 10 years since the onset of the Great Recession. During that timeframe, millennials ranged in age from 12 to 27. Even the youngest were old enough to understand the impact of parents losing their jobs, not being able to make mortgage payments and, within a few years, feel the effects themselves when having to pay for college through student loans. Not only was their financial security threatened, but their future also looked bleak with a poor job market and low wages.2 Today, millennials are grown and still playing financial catch-up.
One of the best ways to deal with economic consequences is to prepare for them beforehand. That means saving during the good times in preparation for another weak economic cycle. If we can help you or the millennials in your life develop a savings strategy or help plan for retirement income, please give us a call.
In recent months, the Federal Reserve published a report observing that the millennial generation lacks the income and assets — in other words, economic power — comparable to consumer spending habits of previous generations. This is important because consumer spending is one of the driving forces of economic growth. Not only does this generation see relatively low wages and work for others, but they are less inclined to start their own businesses. Today, only 0.22 percent of millennials start a new business in any given month, compared to 0.37 percent of baby boomers, and they generate less annual business revenue.3
We tend to think of millennials as a singular generation but, much like baby boomers, the demographic comprises two groups: older and younger. Older millennials suffered the most from the last recession, as they lacked upwardly mobile job and income opportunities. Younger millennials came into their own during the recovery phase, so they are not quite as far behind. However, in terms of financial consequences, the two groups share a common trait of risk aversion and carry substantial student loan debt.4
In the corporate world, millennials are agents of change. By this time next year, they will represent 50 percent of the U.S. workforce, and their size alone can wield substantial power. They expect instant information, results and gratification, meaning they will insist companies stay up-to-date with advanced technology and automation — not necessarily a bad influence.5
In fact, older employees in the workplace are poised to benefit from millennial tendencies. While it’s easy to cry, “I didn’t get that perk when I was their age,” it’s worth recognizing that you can benefit from it now. One of the hallmarks of the millennial approach to work is that they expect to be valued and well-rewarded for hard work; a standard that older employees may use as well. Companies also are deploying new benefits to compete for millennial talent, including top-ranked perks and incentives, such as:6
• Wellness benefits
• Work-life integration
• Student loan assistance
When it comes to politics, millennial voters tilted Democrat when entering adulthood — a trend that continues to grow as they age. Today, 59 percent of millennials identify as Democrats and 32 percent as Republicans, and more members of this demographic identify as Independents than in older generations.7
1 Raisa Bruner. Time. Aug. 9, 2017. “‘Hold My Avocado’ Is the Viral Catchphrase Millennials Have Been Looking For.” https://time.com/4893355/hold-my-avocado/. Accessed June 24, 2019.
2 Venessa Wong. BuzzFeed News. Sept. 25, 2018. “Here’s How Millennials’ Lives Were Changed By Recession 10 Years Ago.” https://www.buzzfeednews.com/article/venessawong/millennials-lives-changed-by-recession-2008-2018. Accessed June 24, 2019.
3 Jared Hecht. Forbes. Jan. 15, 2019. “How The Great Recession Killed The Entrepreneurial Spirit Of Millennials.” https://www.forbes.com/sites/jaredhecht/2019/01/15/how-the-great-recession-killed-the-entrepreneurial-spirit-of-millennials/. Accessed June 24, 2019.
4 Hillary Hoffower. April 4, 2019. “The Great Recession split the millennial generation down the middle, creating 2 groups with very different financial habits.” https://www.businessinsider.com/millennial-generation-gap-great-recession-financial-crisis-money-habits-2019-3. Accessed June 24, 2019.
5 Tejas Maniar. Mayfield Fund. March 25, 2019. “Benefits Trends for the Millennial Workforce.” https://www.mayfield.com/benefits-trends-for-the-millennial-workforce/. Accessed June 24, 2019.
6 Denise Power. Columbus Chamber of Commerce. March 21, 2019. “The Millennial Mindset: Employee Benefits for the Workforce’s Largest Generation.” https://columbus.org/2019/03/the-millennial-mindset-employee-benefits-for-the-workforces-largest-generation/. Accessed June 24, 2019.
7 Pew Research Center. March 20, 2018. “Trends in party affiliation among demographic groups.” https://www.people-press.org/2018/03/20/1-trends-in-party-affiliation-among-demographic-groups/. Accessed June 24, 2019.
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