A new understanding of Millennials has been saved
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Popular opinion considers Millennials to be lazy and immature—but do the numbers corroborate this? Tanya Ott spoke with Deloitte’s Patricia Buckley about how economic conditions affect generational trends, such the regions where Millennials live and their mobility choices.
TANYA OTT: This is the Press Room, Deloitte University Press’s podcast on the issues and ideas that matter to your business today. I’m Tanya Ott, and I’m sitting at my computer getting ready to test a hypothesis.
I’ve opened up a search engine and I’m typing in, “Millennials are . . . ” and, yep! Just as I suspected. It auto-populates with the words “lazy,” “entitled,” “selfish,” and . . . oh, No. 4 is “the worst.” Nice.
Beating up on younger generations is nothing new. The Silent Generation complained about the music of the Boomers. Boomers labeled Gen X slackers and disenfranchised. And now you have Millennials. Born roughly between 1980 and 2000, they are a big generation. Eighty-three million of them (source: www.census.gov). Fifty million are in the workforce.
And all you have to do is open a magazine, turn on the TV, or do a little web search, and you find all kinds of disparaging comments.
Consider these titles:
That headline is followed by a bulleted list: pledging to, just once, eat a meal without texting; promising to show up on time, and look people in the eye, and not use the word literally incorrectly—and this one, oh, this one—promising not go on a job interview in shorts and flip-flops, even if “this job is so beneath me.”
Full transparency, that one is actually from a humor columnist at the LA Times.
But you get the point. Everyone has something to say about Millennials. And pretty much all of the Millennials I know are sick of it. One really smart young woman I work with confessed she goes into most things that reference Millennials preoffended, because such a huge preponderance of articles on the subject are offensive
I feel her pain! And so does Patricia Buckley.
PATRICIA BUCKLEY: A lot of the pieces that are written are about attitudes. So I wanted to take a step back and not really look at, what do they think, but actually what are they doing?
TANYA OTT: Patricia is director for economic policy and analysis at Deloitte LLC. Before that, she was senior economic policy advisor to four secretaries of commerce. She just published an article called A new understanding of Millennials: Generational differences reexamined.
So what are Millennials doing? For one, they’re going to school.
PATRICIA BUCKLEY: They’re by far the most educated. They start college, and they’re actually finishing college in higher percentages than the earlier generations. So if you look at the Millennials, if you just take a subset of them, those currently who are ages 20–21, over half of them are in college—as compared to the Boomers, same age group, only 32 percent.
TANYA OTT: Do we have a sense of what’s driving such high college enrollment and graduate rates amongst Millennials?
PATRICIA BUCKLEY: I think it’s a combination of things. One is that the types of jobs that exist, more of them require a college degree. And the types of good jobs that used to exist—you know, manufacturing is always brought up as the poster child for this—there aren’t as many of those jobs as there used to be. The ticket to success used to be a college diploma. That part’s less certain. But not having a college diploma definitely puts you at a disadvantage.
TANYA OTT: One of the interesting observations from your report is that Millennials aren’t necessarily studying the kinds of things we might expect them to be. I know, you know, there’s a tendency to think that Millennials are all out there building websites and doing tech and developing apps and things like that. But that’s not necessarily the case, based on what you see them studying.
PATRICIA BUCKLEY: No. After all the talk about, we need more people in science, technology, engineering, and mathematics—the STEM fields—they’re less likely than Baby Boomers to go into these areas. And that’s crazy that we’ve been talking, decade after decade, about “here’s where the jobs are.” There was one group, computer science, where Millennials have a higher percentage than the Baby Boomers, but that part’s not particularly surprising. Kids are still going into the same things they’ve been going for a while: business, the social sciences, history, health professions. It’s interesting because the time frame I picked for the Millennials to look at STEM was the school year 2008–2009. So we were still in the recession. It just seems amazing that they see all this economic havoc everywhere they look, and yet that still doesn’t encourage them to say “Gee, I wonder what kind of major will make me most qualified for a job?”
TANYA OTT: You write about the two major factors influencing Millennials. One of them, of course, is the Great Recession. Many of them were coming out, either into college or out into the job market, as the economy was just really having a hard time.
PATRICIA BUCKLEY: Oh absolutely, and you see it in the unemployment rates. Right when the recession was ending in October 2009, that’s when unemployment actually peaked for this younger age group. It was almost 16 percent for the 20–24-year-olds.
TANYA OTT: How did that compare to other age demographics?
PATRICIA BUCKLEY: Older workers did not have unemployment rates that high. So, for 35-year-olds and older, it was just under 8 percent.
TANYA OTT: How’s the recovery been for Millennials compared to Gen Xers or Boomers?
PATRICIA BUCKLEY: The unemployment rate, like [for] everybody else, is coming down. But it still remains high. So, for current 20–24-year-olds, it’s still around 9 percent, where you’ve got it down for the population as a whole down to around 5 percent now.
TANYA OTT: Unemployment doesn’t really capture the full picture though, right? Because some of those Millennials may have jobs, but may be underemployed.
PATRICIA BUCKLEY: Right. And I think that’s a difficult place to get hard data. So one of the things that points to that being the case is that young people are more likely to still live with their parents than they were in prior generations. When you’ve got a lot of job uncertainty, a lot of debt, you’re worried that even the part-time job you currently have, or even if you do have a full-time job, that it’s not very secure.
TANYA OTT: So you’re still living at home. How much more likely are they to be still living at home?
PATRICIA BUCKLEY: Eighteen- to 24-years-olds living with their parents went up to 55 percent in 2014, after being under 50 percent in 2005.
TANYA OTT: Wow. That’s a lot.
PATRICIA BUCKLEY: Even with the older part of the group—so if you look at the 25–34-year-olds, that went up to just under 18 percent in 2014, from 13.5 percent in 2005.
TANYA OTT: Is that driven partly by all that student debt that we hear about?
PATRICIA BUCKLEY: Yes, because they [are] incurring a lot more debt than prior generations. Just the difference between the Gen Xers and the Millennials: Just over a quarter of Gen Xers attending college had any student debt; half of the Millennials have student debt.
TANYA OTT: Why is that so different?
PATRICIA BUCKLEY: This would be another byproduct of the recession. The parents couldn’t afford to help the way they did before. And you have college tuition continuing to rise at pretty rapid rates.
TANYA OTT: Do you think—and this is a little bit of a sidebar, but I’m fascinated to hear it since I have one kid in college right now and another starting in two years and another two years after that—that higher education’s going to hit that tipping point where people say, look, I’m going to have to abstain because it’s so expensive?
PATRICIA BUCKLEY: Yep—or go to cheaper options. One idea that I think is starting to catch on a little more is, spend your first two years in community college. The Commonwealth of Virginia, for example, (and I’m sure other states do the same thing) has a pact that if you graduate after two years in the community colleges and you meet the criteria for admissions, you can get into UVA, Virginia Tech, James Madison.
TANYA OTT: All of this largely leads to a lot of American Dreams deferred. Whether it’s owning cars, buying houses, [or] starting families, Millennials are a little bit more delayed than other generations on a lot of those fronts.
PATRICIA BUCKLEY: Right. Because, first of all, a high proportion of them have debt, and the amount of that debt is a lot larger than it used to be. Then you tack onto that [that] a good number of these kids are defaulting. It’s 11 percent at four-year institutions. Eleven percent—think about that! These are kids that went to school with the dream of bettering themselves, and now they’ve got bad debt. And it’s highly variable. If you look at kids who’ve taken out loans to go to private for-profit schools, 23 percent of them have defaulted. So you’ve got more people with debt, larger amounts of debt, and more people defaulting on the debt.
TANYA OTT: That is a huge number for those for-profit colleges. And I know Congress and regulators are taking a close look at that.
PATRICIA BUCKLEY: Yeah. That’s a definite problem. But even if you look at public four-year institutions, still 8 percent have defaulted three years after they graduated.
TANYA OTT: One of the other things you looked at is where Millennials are gravitating to live post-college, if they go to college. And the list is pretty interesting. Alaska and North Dakota are states with a large percentage of Millennials in them. What’s going on there?
PATRICIA BUCKLEY: In those two, in particular, it would be energy jobs. My guess is, about now, a lot of those kids have gone back home.
TANYA OTT: Because some of the energy jobs have dried up?
PATRICIA BUCKLEY: Yes. With the lower price of oil and the type of oil they were extracting, it’s higher cost per barrel.
TANYA OTT: So, in general, if you’re looking at that generation, what kinds of cities are they most attracted to? On the one hand, I would think they’d be attracted to larger cities because they could have public transit and there would be more jobs, potentially. But on the other hand, they’re much more expensive to live in.
PATRICIA BUCKLEY: Yeah. And you do see that. You see Washington, DC, is always a magnet for younger folks. You see the same thing in Denver and Portland and Houston. Houston’s probably a combination of fairly nice weather and there were oil jobs there then. But overall, Millennials are less likely to move than people who came before them.
TANYA OTT: Really?
PATRICIA BUCKLEY: Yeah. Young people generally are mobile. But if you’re looking at the young people who are Boomers [and] young people who are Gen Xers, you see that Millennials are moving less than the prior generations did when they were the same age. Think of what it takes to move into your own place. If you’ve got a lot of debt and you’re barely making the money to pay that while you’re living with your parents, you don’t have the cushion you need to say, “I’m going to go to a new place. Here I saved up. I’ve got three months to look around while I find a job. I’ve got that money saved.”
TANYA OTT: You, I would imagine in your work in Washington, spent a lot of time projecting the implications down the road. And I would ask, what are the implications down the road that you have an entire generation of folks who are much more likely to put off home ownership, much more likely to put off marriage, having children, all those sorts of things? What does that mean down the road?
PATRICIA BUCKLEY: I think there’s been some permanent wealth loss. This group of people is not able to accumulate things at the same rate as those who came before. But a lot of the trends they’re experiencing, all age groups experience. Yes, the unemployment was higher for the younger people than it was for the older people, but there was still an increase in unemployment. When you look at wealth of the different age groups, those that are not retired already have not been able to get back to the level of wealth that they were before the recession—[due to] a combination of unemployment, the permanent damage to their 401ks, loss of home equity.
TANYA OTT: Right.
PATRICIA BUCKLEY: The prospects for all the groups has been depressed. The timing issue is going to be interesting to watch because we keep talking about Millennials, but once they reach the point where they go out and form their own household. . . . This doesn’t require buying a house, this is just becoming a housing unit, where the surveyor comes and says, “Are you the head of the house? Are you under the age of 35?” Once you’re a householder, the patterns are very similar to prior generations. Householders under the age of 35, their percentage of car ownership has gone back up. Their willingness to buy a house has improved.
TANYA OTT: I really appreciate, I have to say, how you’re teasing this out in an unemotional way, because there’s been so much written about Millennials and what their underlying psychological and sociological or philosophical approaches to life are. Articles that might say, well, they don’t own cars, and they don’t settle down and buy houses, and that means that they’re not loyal or they’re flighty or they don’t want to commit to something. And you’re really trying to set that aside, particularly with that head of household, I would say.
PATRICIA BUCKLEY: Yeah, because I think it’s really interesting. They’re different in the sense that not as many of them are in a good place as prior generations. So it’s not that they’re lazy and want to stay in their parents’ basement forever. But when you graduate and there’s no job and then you’ve got, what, three months before you have to start paying on your student loan? That’s a pretty tough thing to deal with. And so you can see that kind of thing playing out with having their mobility impaired as far as migrating between cities and states. But once they do, in the sense, make it—as in, they’ve got a job, they’re running their own household, not living with a parent—they start behaving remarkably like other generations.
TANYA OTT: So how do employers respond to the particular needs of this group of employees? What should they be considering?
PATRICIA BUCKLEY: When you look at how to reward people, look at the kind of things that really matter to them. Student loan forgiveness. Or for those who want to go to graduate school, some type of tuition program would probably be a lot more appreciated than in prior generations.
TANYA OTT: What about transportation? What should employers and companies be thinking about on that front? Because we talked a little bit about Millennials not having cars at the same rate, particularly when they’re younger.
PATRICIA BUCKLEY: It’s why young people traditionally like going to cities and cities with good transit systems.
TANYA OTT: But there are ways of thinking about transit more broadly than you have a train system or bus system that works. There are all kinds of alternatives at this point, maybe fringe ways of thinking about transportation, that may not be fringe in the future.
PATRICIA BUCKLEY: Right. And part of it is going to deal with, how many of us actually have to be in our offices? As we become more and more virtual in the types of jobs that we do, where you are is less important than, “Do I have good communications capabilities? Is my Internet reliable?” Those sorts of things can edge out transportation.
TANYA OTT: I would imagine that some employers, particularly some managers who are in an older generation, would look at those ideas and go, “Okay, so what you’re saying is that I should think about doing some sort of housing assistance for my young employees. I should think about repaying their loans. Maybe providing education assistance for them to get more education—only so that I will invest all this money in them, and then they’ll leave me.”
PATRICIA BUCKLEY: But the research shows they don’t leave any more often than anybody else. So this perception that’s out there that Millennials are anxious to change jobs just isn’t borne out by the facts.
TANYA OTT: So you’re telling me that all those headlines about the “entitlement generation” may be not so much about that generation but about what normal career building is like in the first years of a career?
PATRICIA BUCKLEY: Definitely. And it’s hard to know where some of these stories originate from. Are younger people more flighty than older people? That’s probably a true statement.
TANYA OTT: But probably true 20 years ago as well as now.
PATRICIA BUCKLEY: Yeah. Young people like to have jobs that matter. I don’t know anybody of any age that says “No, I don’t care if my job matters at all.” If you repeat something enough times, people just sort of assume it’s true, and it’s hard getting back to whatever research gave rise to that sentiment in the first place. Are they more likely to stay at home longer? Yes. Is that because they’re unmotivated? I’m sure there are plenty of unmotivated young people (laughs), but there are also kids who couldn’t find a job, have large amounts of debt, and very limited job prospects.
TANYA OTT: Patricia Buckley is Deloitte’s director for economic policy and analysis. Her report is A new understanding of Millennials: Generational differences reexamined. You can check it out at dupress.com. If you’re a Millennial, you manage a Millennial, you parent a Millennial, or you know a Millennial, we’d love to hear what you think. Leave us a comment on the podcast page, or email us at email@example.com. And if you’re on Twitter—invented by a Millennial, by the way—you can tweet us @du_press.
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