Millennials are classified as being born between 1982 and 2002, according to the Census Bureau. The young adults in this category are many times given an unfair label. Lazy or not willing to work hard for success is something used to describe millennials sometimes by previous generations. Although there might be some millennials not wanting to work, this is no different than any other generation. There are always people that want to get to the top as fast as they can in life.
Generations previous to millennials many times label them unfairly. Baby boomers don’t seem to quite understand millennials and their work ethic. The boomers and previous generations see millennials as a generation that appears to feel entitled. But is this really the case? Do millennials really expect career and financial success too fast or is there something else that has made them seem different?
To understand why millennials seem unusual from previous generations in the workplace it is important to explore how the world has changed. Generations that are not millennial regularly forget the changes that have occurred and keep happening in today’s global work world. These adjustments are not only creating variations on how millennials work, but they are also shaping their personal lives.
Why do millennials seem different in the workplace compared to other generations?
One thing generation’s prior to millennials often forget is the workplace is not the same today as it once was. Previous generations of workers had a much different relationship with their employer. Employees many times stayed with the same company for a lifetime. The company, in turn, would reward their employees for this loyalty. Good benefits and a pension at the end of a career for retirement was common. The benefits of being a lifetime employee for a company are disappearing and employer loyalty has fallen dramatically. The workplace has changed and not for the better. Millennials just entering the working world are often able to quickly see these things because they are the norm and not an actual change.
Although there might be many jobs available at this time in the economy, the benefits are not the same. Reductions in pay, retirement benefits, and healthcare are the new standard. These standards in the workplace come at the same time employers are growingly moving to a leaner staff. Many employers are having their workers take on more responsibility and work. Thus, the result is having fewer workers do the work of more. This results in it increasingly becoming a challenge to find a work-life balance.
Previous generations in the workplace and their employers had a mentality of working together. Today, the mindset is more of an “I got mine approach” so who cares about anyone else. Employers and employees are not even close to being a family like many companies claim. As more businesses keep searching for higher profits and to please shareholders, workers themselves are losing their loyalty to an employer.
Job changes are now more frequent
For young millennials in the working world today, it is likely they will have 12 to 15 different employers. The possibility of a few career changes is also real. According to the Bureau of Labor Statistics, the average worker will have at least 10 different jobs before the age of 40. It is statistically likely in today’s world for most workers to either leave a job by their own choice or through their employer’s many times. These more frequent job changes compared to previous decades can certainly be partly to blame for millennials appearing to be slightly disconnected at work.
With many of today’s employers, it is statistically not a matter of if an employee will be moving on to another job, but it is only a matter of when. These frequent changes in an employer have resulted in many millennials experiencing periods of unemployment or working in positions underemployed. This can also add to millennials feeling less confident and disengaged. Because of these frequent job changes, it is more important than ever for millennials to prepare for their financial future. Here is a previous article I wrote titled – What is the One Thing You Should Save for With Your First Job?. It goes into why it is so important in today’s corporate world to financially prepare for job fluctuation of being employed and unemployed.
Job changes for millennials and other generations of workers today can come at either the choice of the employer or employee. This is another change that might hint at why millennials seem a little different in the workplace.
Millennials are making less money compared to previous generations
It is estimated there are now almost 49 million millennials between the ages of 27 and 37. Most of the workers in this category are earning less money compared to previous generations. According to a study published by Monthly Labor Review and the Bureau of Labor Statistics, generation X and baby boomer families had household incomes from 11 to 14 percent higher when they were working in 1998. The study took into consideration age, work status, and other variables.
Surprisingly, the study conducted on millennials by the Bureau of Labor Statistics showed that they actually have less debt compared to Generation X, which was the only generation comparison the data was available from. Even though millennials have less debt, it appears more of their debt is related to student loans compared to Generation X debt which is more concentrated in mortgages. The study went on further to show that 20 percent of Generation X had student loan debt compared to one-third of millennials that held student debt.
The difference between student loan debt with millennials compared to Generation X is millennials on average have $5000 more in student debt. The result has been lower credit for millennials and an average net worth nearly 40 percent lower when compared to Generation X.
With Generation X debt being mostly in mortgages and tied to a possibly appreciating asset, they have been much better off. The same could likely be said about boomers as well, although the report did not specifically study this generation compared to millennials.
While many generations previous to millennials believe their disconnected work loyalty and ethic is related to them wanting success at a fast pace, this doesn’t look to be the true reason. The different attitudes of millennials to work and life might be the result of their lower earnings, fewer assets, and higher student loan debt.
It’s not just the workplace that has changed for millennials
Although it might be related to fewer assets and wages in the workplace, the lifestyles of millennials are much different from previous generations. This might also be a direct correlation as to why millennials seem to have a much different outlook on life and work.
Many people might think millennials are too focused on obtaining their success at a fast rate and this could be a reason why several young adults delay marriage or starting a family. There does seem to be a difference in the lifestyles of millennials and previous generations. One study by the Census showed that 8 in 10 people were married by the age of 30 in the 1970s. Today, 8 in 10 people do not get married until age 45.
Lifestyle differences between earlier generations and millennials certainly show a contrast. Getting married and starting a family later in life with added student loan debt compared to previous generations has also resulted in more young people living with their parents much longer. A study by the Census showed more young people lived with their parents than with a spouse through marriage.
Most millennials today realize they will be working longer compared to previous generations. According to one study by Man Power Group, 66% of millennials expect to work past the age of 65. 32% of them are expecting to be working past the age of 70. These are likely good expectations since the state of Social Security is increasingly becoming unknown for future generations. Some people believe the system will go bankrupt. I believe it will still be around, but the age to collect benefits will keep going up.
With countless millennials realizing they will be likely working longer than previous generations; they often do not spend as much of their money on possessions and stuff. They prefer to have experiences and are willing to pay for them. Far away destination excursions and paying to have a lifetime experience seem to be something millennials really enjoy doing. This probably isn’t a bad thing with the added hours they generally will work and the extended years they will work compared to previous generations.
Millennials also tend to spend more on eating out, technology, and sports or music events compared to previous generations. Again, many of the things they do spend money on are for experiences. Technology is one consumer expense they certainly do not mind splurging on. This might be due to growing up in a fast-paced technology world. They don’t know the difference, but there are people that can survive without the newest iPhone.
The issue with millennials paying for experiences opposed to consumer things is some experts argue it is hurting the economy. It might just be doing this from a financial standpoint or it might not. Yet, there is one thing for sure. The experience expenses millennials select are probably good for their mental well-being. After all, happiness generally does not come from accumulating stuff. It comes from having a good mix of family, friends, and experiencing life. You can’t really blame millennials for choosing this way of life. Can you?
There are several misconceptions about millennials and their finances
Generations previous to millennials often believe they are big spenders and don’t generally save any money, even though what they are spending money on is not typical consumer items. This might be one of the biggest misunderstandings when it comes to the millennial generation. The truth is young millennial adults are actually good at saving some of the money they do have. They might even just be better at saving compared to some other generations. An article by The College Investor points out millennials save over 5% of their salary for things like emergencies, big purchases, and retirement.
The College Investor also points out that low consumer spending by millennials might be related to something even bigger than just having more debt compared to previous generations. A lot of young adults grew up during the recession in 2008. This might have resulted in many of them being more frugal as they witnessed their parent’s fears and struggles during that time.
If millennials are truly good savers and have good frugal practices, is this necessarily a bad thing? I don’t believe it is as many workers from other generations have very little saved for retirement.
Another misconception about millennials is a large number of them are not able to purchase a home. This might be partly due to the debt many of them carry, but the reality is a lot of them are saving for a home in addition to putting money away for retirement. For a lot of millennials, it is important for them to be financially stable before buying their first home. Not purchasing a home also often comes back to the life experiences they like to enjoy. Although some millennials do have trouble buying a home, numerous young adults just choose not to be homeowners.
Although some millennials just really do want a career and financial success as fast as they can get it, there are more of them that probably just prioritize having a good balance between work and life. They want to get rewarded for their work and to still have the freedom to recharge when they need it.
Many millennials are either going to be entering the workplace or they did enter a corporate world that was already much different from previous generations. A working world where employers are increasingly seeing their employees as being more expendable. Millennials understand the need to continually work on their skills to remain employable.
Although some generations previous to millennials see them as disconnected or having a sense of entitlement, I believe this isn’t necessarily the case all the time. They have more student loan debt compared to previous generations, they are good at saving money in many cases and even frugal at times. Millennials just understand that career development is not something that will definitely come with hard work and employer loyalty.
Millennials realize career development and learning new skills is the key to survival. If they work for an employer that doesn’t offer opportunity, they might not stick around. This is not because they don’t want to work for success or to be financially rewarded. It is because they understand loyalty is dead in many cases. They understand the need to develop themselves without waiting for an employer to reward them. Millennials want to make it happen when they are due for success and not getting it. They will find it themselves if an employer does not provide it to them.
One of the big things today for a lot of millennials that I find encouraging is their desire to have some type of side hustle. They find a way to make extra money on the side. Some millennials do it simply because they need the money. Others do it to eventually hopefully leave their corporate employer and make a business of their own. A growing number of millennials realize that success in many instances is only going to happen with making their own dreams instead of fulfilling someone else’s.
Next time you have a conversation with someone from the millennial generation have an open mind. They really aren’t all entitled kids that want success at the speed of light without working for it. Millennials just live in a different generation that has certainly changed from previous ones.