Millennials want money to leave home
The mystery known as Millennials can now be solved with two new research reports. Yes, we’ve been told that members of this cohort are idealistic, entrepreneurial and more interested in life-work balance than their Baby Boomer parents. And yet while that may have been true, it seems that some may be taking a different view as the realities of adulthood set in.
According to a new study by Toptal, a network of freelance software engineers and designers, what really drives recent grads is M-O-N-E-Y. In fact, 62 percent put salary as the number one factor when looking for a job out of school. That compares to:
- 46 percent desiring a flexible work schedule;
- 31 percent wanting to travel;
- 24 percent looking to quickly gain experience.
Perhaps the biggest reason Millennials value salary above other factors – analysis my own – is that so many live with their parents and wish they didn’t.
According to a new Pew Research Center report, the percentage of young adults living at home with their parents is at the highest level since such records have been kept. While it is widely proffered that the Great Recession exacerbated this situation, Pew’s study found it actually began in 2007 before the financial collapse.
This common living arrangement has been brought about by a combination of high levels of debt from college loans along with a lack of available well-paying positions.
Jobs, a lack of the good kind, are at the heart of Millennials’ problems. In this regard, young males have found the going very tough. In 2014, 71 percent of males between 18 and 34 were employed. That compares to 84 percent of males in the same age group who had jobs in 1960, according to Pew.
Discussion Questions
DISCUSSION QUESTIONS: Should retailers be concerned about a class of consumers (Millennials) that may never climb, figuratively speaking, out of their parents’ basements? With so many opposed to government intervention, is it time for retail and other industries to find ways to assist Millennials in helping to lift themselves up?
Poll
BrainTrust
Max Goldberg
President, Max Goldberg & Associates
Brian Numainville
Principal, The Feedback Group
Manufacturers and retailers should be concerned about a class of consumers that has less money to spend. This is one reason why paying a living wage has become so important. The middle class in America has taking a big hit, while the top 1 percent has seen its compensation soar, a fact that does not bode well for political, social or economic stability.
Government intervention is probably what put the Millennials in their parents’ homes. Making student loans in large amounts available sent the message not to work, kick back and take a college vacation. ACA extended health care to age 26 which sent the message not to rush to get a good job after college or just don’t rush to get out of college. As for those who have chosen to be a human cartoon with tattoos, colored hair and gauged ears, they have made a personal lifestyle choice to be unacceptable to many employers. Good well-paying jobs are always and everywhere all the time for good people. There are plenty of Millennials that have taken advantage of the labor shortage and have found good well-paying jobs. Every generation has produced a class of people who might be educated but never achieve economically. Income is a personal decision. Attitudes toward salary, flexible work schedule and appearance need to be adjusted on both sides. The supply and and demand in the labor market will be the arbitrator.
I think there is a deeper sociological factor at work in this trend than just money and jobs. Boomer generation parents are not making it “desirable to leave” their homes.
Think about why you were so anxious to be on your own when you were 20-something, or even sooner. Staying at home meant living by the family rules for most of us. And that meant curfews, and no drinking in the house and no girlfriends staying over. Not so much anymore. At least, not from what I see.
I once asked my grandfather why he had not added more bedrooms to the two bedroom farmhouse where he raised my mother and four boys. He replied simply — “so they’d leave.”
George and the Pew Research offer some very salient facts about the Millennials who are participating in the adventure of life. It merits pointing out that all Millennials are NOT traveling the highway of life in the same pattern. It’s also important to note that the Millennial Generation represents over 78 million adults, compared to Generation X’s around 46 million. Millennials number a couple of million more than their largely Baby Boomer parents’ generation of 76 million.
Using Prosper insights and analytics data it is useful to look at adults 18 to 24 separately from adults 25 to 34. Looking at household patterns from this view, 33 percent of adults 18 to 24 live with their parents. In May 2014 that percentage was 34.9 percent, and in May, 2005, 38.7 percent of these younger Millennials were living with parents.
Looking at older Millennials 25 to 34, 10.1 percent of them live with their parents vs. 11.4 percent of the age group who lived with their parents in May, 2005.
Millennials are certainly marrying later than previous generations, but the 25- to 34-year-olds are now stepping up to home ownership. Fully 47.6 percent of these adults own a home as of May, 2016 compared to 41.4 percent in May, 2005. Those 25- to 34-year-olds are apartment renters — 42.4 percent vs. 47.2 percent. Notice the explosion of apartment starts over the past six to eight years — it’s growing NOT because parents and Millennials are staying together, it’s because Millennials are making steady, albeit slow progress in getting to spots on the highway of life that fits their needs.
Deep segmentation of this population of 78 million is warranted. As they form households, with or without a partner, they will make a huge impact on retail, furniture, appliances and other items used in home or apartment living.
It’s also worth noting all the media given to the concept that Millennials want experiences, not stuff. The Toptal data supports that. Sure they want good paying jobs (so they can afford more travel and experiences), but they are likely more patient in waiting to find that job because they’re not hungering to buy more and more gadgets and stuff. So retail’s challenge is not just in waiting for the “lift-up” but also in the fact that their merchandise might not even be that attractive when these young people achieve more disposable income.
Really! I am tired of hearing stories about how Millennials need more money to leave the nest. We have enabled these young adults to believe everybody owes them a huge salary and a corner office, which is laughable. I was raised to work hard, show respect, save 75 percent of my paycheck during my school years, and invest in my future without a dime’s worth of help from government. We have a problem in attitude, and until we actually start telling this generation to act properly, nothing is going to change. Yes our government loves to throw money around to buy votes, and how is that working out for us?
Are there solutions for these spoiled, delusional folks? Yes, but personal sacrifice and busting your butt in school and taking any job you can to get ahead is a good start, and until this changes, we will continue to have a generation that believes a degree in social studies should offer them a huge paying job just for showing up. I work with kids in all our schools, and we try to mentor them for their future, and many of the local business leaders try to instill these beliefs that I stated above, as it is critical we tell them the truth. Not trying to be harsh, as I want success for all of them, but honesty is the way to their hearts, and we need more of that these days.
To me, there’s a weird dichotomy out there. Labor shortages and companies desperate to hire qualified grads on the one hand, and yet, complaints from Millennials of being offered no-pay internships or effectively slave-labor compensation, even (and especially) for companies that are highly desirable employers.
How do both of these exist together? How do these exist in a world of declining productivity? There seems to be this disconnect out there between the value of the work and employers’ willingness to pay according to that value at the skilled end, and demands for wages that don’t feel like they match up to the value of the work at the unskilled end.
It’s like all the incentives to be productive, to strike out on your own, to invest in your future, have all been eroded or skewed: you invest thousands in an education to end up on your parents’ couch, or you work in fast food and end up on your parents’ couch.
There’s plenty of blame to go around, from Boomer parents who make it too easy for kids to come back home to the Millennials themselves who maybe choose degrees in industries that don’t pay (what’s the percentage of kids with STEM degrees sitting on parents’ couches, I wonder), to the weird and perverse political and economic environment we find ourselves in, to companies who look at labor as a cost instead of an investment.
No easy way out. No wonder everyone’s so angry these days.
Nikki and Tony make excellent points. I was on the mainland recently in Seattle. A city full of large modern technology corporations. A progressive city that is probably 10 years ahead of the rest of the U.S. I believe they have a $15 a hour minimum wage. Yet retailers cannot find people suitable for work. There is an adequate amount of people without jobs. Many are homeless and standing outside those supermarkets who are begging for people to come work. Businesses are forbidden to admit they discriminate on personal appearance, age, minor amounts of narcotics in the blood, credit, or if you are living with your parents. However I believe they do discriminate. Business owners want to hire people with similar values to their own. It could be short-sighted but it is human nature.
The research shows they need money to move out for the experience, not to buy stuff. Hence the challenge to retailers’ traditional approach of “shopping for gratification and social status and to be liked by everyone.” It is not working for this audience who prefer experiences (i.e., finding the latest food-porn more than owning the latest thing). The economy and social pressure is the only thing that can assist Millennials to leave their parents’ homes, not government policy.
I agree with Ben Ball’s comments completely! Baby Boomers have made it too comfortable for their Millennial children and their attention spans are collectively shorter — so long-term goals, like building a career, buying a house, etc., are more difficult for them to materialize.
Can/should retailers address this? Well, retail has always been a tough industry to attract educated people (otherwise stated, “They’re too smart to work this hard!”). Today that is no different, so they should emphasize short-term benefits that can lead to long-term potential for educated employee candidates. Simple, but not an easy task to accomplish.
While on one hand, finding a full-time job after college can be a challenge, Millennials need to realize that it isn’t an instant gratification game. Most likely it means doing your time and working up the ladder. On the other hand, the realities of student loans, Boomers that haven’t yet retired, entry level wages and the need to build relevant experience, coupled with changing parental attitudes, all play a role in keeping the younger Millennials at home. As another panelist pointed out, the older Millennials are much less likely to be at home relative to the younger Millennials.
Would be really nice to see the ethnicity of the Millennials staying at home. We’re far more diverse now than in the 60s and staying at home for Asians and Indians is culturally accepted. Money has been a primary motivator for the majority for a long time; this is not really surprising to me.
“The fall in young men’s employment and earnings since 1970 has likely made living independently more difficult for them, which in turn helps account for the rise in the share of young adults living with their parent(s).”
Forget the preoccupation with where people live, the first 19 words here are the issue. And for those who are “opposed to government intervention” — however one may interpret that — I would ask how people are supposed to “lift themselves up” when a whole generation of them don’t make enough to live on.
What should a retailer do to help Millennials? Create a retail business that is highly profitable by creatively fulfilling a customer need, expanding wisely, paying taxes, and hiring and fairly compensating good workers, some of whom that are, hopefully, Millennials. With that they have done their part to help every generation. A job in retail is a great workforce entry opportunity for people of any generational label. Lots of great skills areas are enhanced with a retail position including software training, customer interaction, management, and many others.
Of course retailers should be concerned about Millennial consumers … but not more than Generation X or Boomers. The focus has to be on the core consumer target not on the generational target groups.
Don’t overemphasize Millennial consumers, they are not a monolithic group and the differences between the older Millennials and the younger segment are vast.
I strongly recommend retailers to identify their core consumer target and then determine which segments of the various groups belong to it (the core consumer).
The characteristics and values of the generational groups are not important. What’s important are the characteristics and values of the core consumer, the common threads among the group — the consumer insight, that unites them all.
Of course millennials will get out of their parent’s basements. As Beldar Conehad should have suggested, humans don’t like living in the basement of parental units.
Clearly it is more difficult for this generation given that wages of entry level jobs are so poor. What can retail and other industries do? That’s a huge question. But I think we have to start with the basics: Why business exists.
Businesses are a value to society as a whole. As a result, shareholder value is not their only duty — or even their primary duty. There is tremendous importance to a business balancing its need to serve employees, vendors, customers, community, AND investors. And there is at least some evidence that by doing this, businesses create their own longest term value, profitability, and longevity.
Why do I start here? Because this also means paying employees “well” and creating job stability. There’s also need to drop many of the invasive bureaucratic management techniques that satisfy executives, but hurt employee morale (like store bonuses based on irrelevant customer satisfaction surveys).
Only by rebuilding strong base pay can millennials get out of the basement. But strong base pay should also pay off for retailers with stronger employees who create stronger sales.