The future looks a little less than bright for members of the younger generations. Research shows that the majority of Americans believe it is unlikely members of Generations X and Y will have a better life than their parents. At the same time, some members of these generations seem disillusioned with the current state of affairs and express pessimism that they will have a traditional retirement. Adding insult to injury are several popular myths that tend to blame these falling standard on the members of Generations X and Y.
The biggest criticism of Generation X is that they lack a strong work ethic and don’t show proper respect for authority, earning them the nickname, “Slacker Generation”. Another persistent myth about Generation X is that they aren’t interested in conforming to society’s expectations. Yet neither of these attributions holds up under close examination.
Regarding society’s expectations, recent studies show members of Generation X are quite conventional.
- Two-thirds are married
- 71 percent have children
- Three-quarters of those with children in elementary school help their kids with homework
Not exactly the portrait of a rebellious, cynical, apathetic generation.
As far as their work ethic is concerned, Generation X puts all other generations to shame. According to the fall 2011 edition of The Generation X Report (PDF), published by the University of Michigan Institute for Social Research, Generation X:
- Is more likely to have a job than other American adults
- Works significantly more hours on average than other U.S. adults
- Spends more time commuting than any other demographic
Myths about Generation Y are just as bad. It has earned the nickname “Entitlement Generation” due to a perception that its members are overly demanding, have inflated egos, and are unwilling to “pay their dues”.
According to a study conducted by University of New Hampshire professor Paul Harvey, which measured psychological entitlement and narcissism, Millenials scored 25 percent higher than respondents age 40 to 60, and 50 percent higher than those over 61.
But, other data suggest this sense is changing. According to a survey conducted by Harris Interactive on behalf of Randstad, Millenials who have been confronted with the harsh realities of the worst labor market since the Great Depression are softening their expectations.
It is also possible that Millenials simply got cut a raw deal. The U.S. Census Bureau reports that the employment rate of those age 16-29 has fallen from 67.3 percent in 2000 to 55.3 percent in 2010. The same survey shows high unemployment among young people with a college education—once considered a golden ticket to prosperity. To top it off, the companies that are hiring are offering lower wages.
In America we are told that if you play by the rules you will be rewarded. But, as one member of Generation Y said: “Everyone tells you to go to school and get your degree and get a job, and now I can’t even get a retail job.”
Is it entitlement to expect the same opportunities your parents and grandparents had? Is it wrong to be disappointed after investing many years and thousands of dollars on a college education only to face the worst job market in generations?
So, what does this mean for retirement? Despite the long hours working and commuting, nearly two thirds of Generation X lack confidence that they will have enough money to live comfortably in retirement. Meanwhile, 50 percent of Generation Y has not yet started saving for retirement.
Both Generations X and Y will have to save significantly more than older generations did in order to overcome the lack of employer pensions and possible reductions in government assistance.
Maybe it’s time to face the truth; things are different now. America is in the midst of what appears to be a cultural shift. Many Americans now live in multigenerational households. Young people are losing the opportunity to save in their early years, which are key to long term retirement planning. They sense this when they talk about their futures, even if they have trouble expressing it precisely.
Despite all the doom and gloom, there is a glimmer of light at the end of the tunnel. The Gallup poll I referenced last time, the one that said confidence in the American dream was faltering, also shows that the only age group who believes today’s youth will have a better life than their parents is today’s youth. Young people are still optimistic and confident, and I for one find that extremely encouraging.