For years, young Americans were sold on the American dream. Work hard, learn a skill, be resourceful, perhaps go to college, and you’ll be able to live a solid middle class life. Now, millions of Americans, many of whom have worked hard, furthered their education and are more than resourceful, are finding themselves struggling to find jobs, pay bills, and otherwise live a decent life. However, while the Great Recession has hit just about everyone, there’s a strong argument that Generation Y will bear the brunt of the burden.
Death of the American Dream for Generation Y
As the old saying goes that it’s better to have loved and lost, than to have never loved at all. Well, I’d like to re purpose that statement and say that it’s “better to have lived the American dream for awhile, and have lost it, than to have never dreamed at all.”
Impacts On Generation Y
To be clear, this article isn’t aimed to be the typical “Generation such & such is screwing Generation so & so over.” These types of articles are becoming very common, but it’s important to understand that the same conditions that are having detrimental impacts on Generation Y are also having detrimental impacts on Generation X and Baby Boomers. Older generations have seen their wealth, often invested in housing, wiped out. Pensions are at risk (if not already wiped out), and once unemployed, older individuals often find it near impossible to find a decent paying job that utilizes their skills.
No generation is screwing the other generation over. Instead, a failure of leadership on the part of the small minority of politicians and public policy makers who control society is having a profound impact on every generation. Still, Generation Y now faces the dimmest prospects of ever achieving the American Dream.
Generation Y is suffering from a Great Depression
For starters, there’s the simple fact that unemployment is hitting Generation Y, or the Millennials, harder than any other age group. The unemployment rate of those from age 18 to 29 currently stands at 16.1 percent. To put that into perspective, unemployment rates in the Great Depression were estimated at between 20 to 25 percent. And this is occurring at the “prime” of ones life, when one is supposed to be saving and buying a house. So while most of America may be suffering from a lingering Great Recession, Generation Y is suffering from a Great Depression.
Meanwhile, recent studies have suggested that only 50 percent of college graduates are obtaining college level jobs. The rest are stuck working jobs that do not utilize their education. So years of study now gets you a job waiting tables at the local diner or staffing a cash register at a big box. Cheers to that.
To make matters worse, student loan debt is skyrocketing for Generation Y graduates. While it’s tempting to point the finger of blame at students, claiming that they waste it on booze and gadgets, the simple fact is that tuition rates and college living costs (meaning prices to rent a dorm and buy a meal plan) have skyrocketed. College tuition rates have skyrocketed by some 500 percent since 1985, while inflation has grown at only 115 percent. Even worse, 300 percent of the increase has come in the last 10 years, all while wages have stagnated and unemployment has skyrocketed.
Generation Y: The Elusive Fountain of Youth
Ponce de Leon spent the greater part of his adult life searching for the rumored fountain of youth that would grant immortality. Alas, he never found it and died. Now, many young adults from Generation Y are searching for that elusive career, and trying to figure out which skills and degrees will help them obtain that. Sadly, many of them probably never will. And eventually, they will die.
There’s always the age old adage “I worked through my summers to pay my tuition.” That’s great and in 1970, with dirt cheap tuition prices and a booming manufacturing economy begging to pay high prices for unskilled labor, such a thing was possible. Now-a-days, if you work at Wal-Mart Stores, Inc.(NYSE:WMT) or McDonald’s Corporation (NYSE:MCD) for 40 hours a week for 12 weeks (summer) at 8 dollars an hour, you’ll collect a measly $3,840 dollars.
Now, subtract rent, fuel, car insurance, food costs, etc and you’d be lucky to have more than a thousand dollars left. That thousand dollars might look okay in your bank account, but measured against in-state tuition bills that can easily top $10,000. It amounts to a pathetic pittance.
Of course, it’s still the student’s fault, right? It must simply be because many from Generation Y picked the wrong degree. It’s because they are all English majors and Philosophers. Never mind the fact that their college counselors never raised a red flag, they should have known to go into engineering, businesses, or another in-demand degree.
To be honest, that’s what I thought. It was our fault. We should all be engineers, future CEOs, and scientists. And then I dug up the numbers and found some rather shocking statistics. Georgetown analyzed U.S. Census bureau data and found some rather interesting facts. The report is from 2011, so it could be slightly outdated, but the findings are interesting nonetheless.
Military technology majors suffer the 5th highest unemployment rate, nearly 11 percent. While engineering and industrial management comes in with the 9th highest unemployment rate of 9.2 percent. International business majors suffer from an 8.5 percent unemployment rate, while biochemical sciences contend with a 7.1 percent unemployment rate.
This data is shocking, because most of the degrees come from STEM degrees, which supposedly are in high demand. Business is also trumped as the “degree of the future” and yet many business majors are also suffering. Millennials are often criticized for choosing arts & humanities, but in many instances such degree holders are having just as “easy” of a time finding jobs as many of their STEM counterparts. Granted, this data does not show differences in starting pay, so there is more to the story.
There is one industry that does not appear to be on this list: health care. This will of course start up the banter “then everyone should go out and be a nurse/medical technologist/doctor” and that will help those from Generation Y, right? Never mind that getting into a nursing degree at a regional four year university is similar to going to an Ivy school. The problem with this theory is that if everyone runs out and gets a medical related degree, we’ll most likely see a glut of qualified people and unemployment rates would rise even in the medical sector.
The basics of supply and demand are devilish, and often lost on our politicians and leaders.
Is Generation Y Afraid of Sweat?
Then there’s the other criticism of Millennials, that they simply don’t want to get their hands dirty, and refuse to learn skilled trades or do manual labor. This criticism has always struck me as odd. Coming from a blue collar community, I know plenty of young people in my generation who’d be glad to work in roofing, plumbing, or another skilled trade, and yet besides finding part-time work and short-term projects, many are struggling to find full-time, stable work.
I couldn’t find a breakdown of unemployment rates among skilled trades, but according to the Bureau of Labor Statistics, the construction industry as a whole is suffering a 13.1 percent unemployment rate, while manufacturing is at 6.4 percent. Even in the supposed labor starved oil and gas industry, the unemployment rate stands at 6.1 percent. All of these industries have traditionally been major employers of skilled trades workers, suggesting that the grass may not be as green in the skill-trades sector as everyone seems to assume.
These high-unemployment rates have created a scenario in which it is difficult, if not impossible, for a Gen Y’er to get their foot in the door. And when someone finally does get through the door, it’s often to replace an older person, who was either forced to retire or flat out fired, at a fraction of the previous individual’s wage. Consider this, at General Motors Company(NYSE:GM), a worker from the last generation earns an average of 32 dollars per hour, while a new hire will earn between 16 to 19 dollars.
Granted that’s still a good wage, and GM if you’re hiring, get in touch. I’m from the Detroit metropolitan area, after all, and have no problem using my skills on your assembly lines. (Why do I have a feeling my inbox will remain empty?).
Generation Y: So Falls the Golden Rule
There’s no doubt that every generation has lost out in the Great Recession, and given trends on the global economy, and the stunning ineptitude of our politicians on both sides of the aisle, one can’t be blamed for having a pessimistic outlook on the future. Generation Y may now stand to be the biggest losers, however, as their inability to find entry level jobs that utilize their education and teach valuable skills, will put them at an increasing disadvantage, and could impact their earning for the rest of their lives. In fact, numerous studies have found that people who start their career during recessions suffer from lower earnings their entire life.
Now, with an economy unwilling or unable to absorb Millennial labor, whether skilled or not, an entire generation faces dim future prospects. College tuition rates will continue to climb, while Generation Y students will try to select “in demand” degrees only to find that as the masses move to acquire these skills, these skills become less unique and job prospects dim.
And meanwhile our politicians are actually debating ways to bilk more money off a struggling generation by figuring out ways to increase student loan interest rates while continuing to slash support to higher education. Funny, many of our leaders were glad to reap the fruits of an affordable education system, but now are more than willing to kick that ladder away so future generations can’t enjoy it.
What happened to the Golden Rule of doing unto others as you want done unto yourself? Well here’s a message for our leaders: why don’t you do unto yourself as you do unto others?
Fat chance. These same politicians will be glad to collect their social security from a bankrupt social security system, and of course they’ll never consider cuts to their own pensions or Cadillac health care plans. Why should they? They can just continue to foot the bill to future generations. Why does anyone but a politician deserve access to high-quality health care? And why worry about that 16 trillion dollar debt? Just let Generation Y deal with it in thirty years.