Recession Affects All Generations Economically; While Impact Varies, It Heightens Intergenerational Tension

by Susan Welch, Hewitt Research

Negotiating generational differences in the workplace can be tough. Today’s economic recession makes relationships between generational groups even more complicated.

Many Boomers feel like they have had the rug snatched out from under them. Their home equity values have plummeted, and their retirement savings have dwindled. Now, many remain in the workforce not because they can, but because they must. A significant number who have left the workforce are seeking their way back. “Middle Boomers,” those between the ages of 52 and 58, face the biggest difficulties. According to a Walletpop article, many of these Boomers are delaying retirement from age 65 to age 70—and 85% of those planning to delay retirement have been hurt financially in the recession. The biggest pain for Boomers is not necessarily the rate of unemployment, but the length of time unemployed. Members of this generation take on average 22 weeks to find a new job, compared to only 15 weeks for those aged 20 to 24, according to USA Today.

Although they spend less time in the unemployment line, many more Millennials are also finding themselves there these days. According to U.S. News and World Report, unemployment hovers at 10% for the general population, but averages a whopping 20% for those between 16 and 19 years old. Unpaid internships are on the rise. College graduates are waiting tables. The same report cites evidence that a low starting salary can follow someone throughout the early portion of his or her career. During the 1981-82 recession, graduates who found employment earned an average of 25% less than those who began work during good economic times. The earnings gap often persisted up to 15 years later.

Millennials enter the workforce with more economic pressures than preceding generations, particularly because of the debt they’ve incurred. According to an article in USA Today, two-thirds of young adults in their 20s carry some debt; this same age group tends to be late to pay off loans, too. While credit cards are part of the problem, the fastest growing group of debtors are those owing $20,000 or more in student loan payments.

With the relative lack of media coverage about them, one might assume Generation X is weathering the recession just fine. In fact, however, Gen Xers are suffering for the second time. Many of them first entered the job market during the dot.com era, when jobs were plentiful—but then suddenly vanished. Now, just as they’ve settled into homes and established their families, they are hit hard by the current recession. According to  MSNBC, this generation is the first to go largely without pensions and other job securities long enjoyed by Boomers.

Given economic insecurities, employees of all ages are tense, frustrated, on edge. When they begin to think the younger generation is hot on their heels, older workers become tense. When they and their friends fail to find summer jobs because post-retirees have taken them, younger workers become tense. When they can’t visualize career growth because they know the people above them are delaying retirement, middle-aged workers become tense. Employers can address these economy-based concerns by approaching hard decisions with compassion. When workers must be let go, employers need to show as much compassion for remaining workers as is practical—remembering that top talent can and will leave if dissatisfaction is allowed to fester. Finding flexible solutions, such as across-the-board pay reductions in lieu of layoffs, demonstrates that employers care and are willing to share economic pain.

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