Generational Diversity: Millennials — Effects from Hard Hits During Recession Could Be Long Lasting and Far Reaching
By Andrés T. Tapia -
Sarah Fedler (not her real name), graduated with honors from the University of Wisconsin – Madison last spring. She has all the qualities employers look for: smart, poised, energetic, ambitious. Her extracurricular activities were as stellar as her academics. Many established professionals such as myself have given her recommendations and opened our LinkedIn contact lists when we did not have an opportunity to hire her. And yet a year after starting her job search in earnest, she still does not have a full time job.
Sarah’s story, unfortunately, is not an exception, but rather indicative of a trend. While the overall unemployment rate in the US hovers around 10% for 16 to 24 year-olds it’s almost double at 18%. And this trend line is also true in Europe. In Greece, Ireland, and Italy it ranges from 25%- 28%% and in Spain it’s a whopping 43%.
BusinessWeek has worried enough that in October it ran a cover story, “The Lost Generation: The Job Crisis Is Hitting Young People Especially Hard–Imperiling their Future and the Economy” and on January 1, 2010, the New York Times made it a Business section page 1 story, “Young, Down and Out in Europe: Spain Reflects the Soaring Joblessness for Workers Under 25.”
These news stories as well as the personal stories of young people such as Sarah and her contemporaries is not just bad news for Millennials — studies show that unemployment early in one’s working age life will lead to a lifetime of depressed wages — but pose risks for companies and Boomers as they retire. Why? Here’s how Peter Coy from Newsweek puts it:
Employers are likely to suffer from the scarring of a generation. The freshness and vitality young people bring to the workplace is missing. Tomorrow’s would-be star employees are on the sidelines, deprived of experience and losing motivation. In Japan, which has been down this road since the early 1990s, workers who started their careers a decade or more ago and are now in their 30s account for 6 in 10 reported cases of depression, stress, and work-related mental disabilities, according to the Japan Productivity Center for Socio-Economic Development.
When today’s unemployed finally do get jobs in the recovery, many may be dissatisfied to be slotted below people who worked all along—especially if the newcomers spent their downtime getting more education, says Richard Thompson, vice-president for talent development at Adecco Group North America, which employs more than 300,000 people in temporary positions. Says Thompson: “You’re going to have multiple generations fighting for the jobs that are going to come back in the recovery.”
What’s more, the baby boom generation is counting on a productive young workforce to help fund retirement and health care. Instead, young people risk getting tracked into jobs that don’t pay as well, says Lisa B. Kahn of the Yale School of Management. That would mean lower tax payments for Social Security and Medicare. Only 46% of people aged 16-24 had jobs in September, the lowest since the government began counting in 1948.
In the chapter on Millennials in The Inclusion Paradox, “Why This Generation Will Challenge the Workplace Like No Other,” my focus was on how the Millennials who are employed will significantly transform the workplace. Now we have evidence that those who are not employed could also significantly affect the business environment.
What can be done? Between the Newsweek and New York Times’ articles here are a few recommendations for companies and governmental social/economic policy:
- Keep hiring young people even while doing layoffs. If hiring of the young is frozen, when the economy picks up again, the companies who did so will find bone-dry pipelines.
- Offer job training for those who have been unable to secure jobs over an extended period of time. Starting January 2010, the British government is guaranteeing anyone under 25 ho has been unemployed for more than a year either a job offer, training. or a paid workplace experience.
- Consider apprenticeships. In Germany this approach, starting in high school, guides young people into blue-collar jobs. And it seems to have paid off: youth unemployment in Germany is just under 11% – among the lowest for this age group in Europe.
- Offer financial incentives to employers for each new hire. The Obama Adminstrations is considering offering $3,000 tax credits for companies for every new hire.
And what are Millennials doing to claw their way in? Many are pursuing advanced degrees that could make them more marketable once they graduate and the economy picks up. And many are taking things into their own hands in ways that today’s technology allows and starting their own businesses.
What thoughts do you have on the best way to address the high unemployment among Millennials? Their vitality and economic strength is essential for all of us.
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