Which Generation Took the Most Hits From the Recession?
We all know someone fighting to keep their home, looking for a job, or extending their retirement due to the recession.
The Millenials (in their late teens and twenties today) are fighting to find jobs out of college, many becoming boomerang kids, heading back home to live with Mom and Dad. The Gen X’s (32-46) would normally be in the highlight of their careers, but are struggling for better positions as the Boomers try to squeeze in a few more work years to make up for their plummeting savings.
Every generation has been affected by the recent recession in different ways, and each generation will tell you they had it hit them the hardest. So, I was fascinated when The Atlantic published an article on this very topic to look at how employment, income, and future outlook were affected by the recession for each generation.
I took a few moments to highlight the major points under each section as well as do some additional research on the topic myself. I know we have readers from each of these generations as well, so I thought it would be interesting to get your inputs on how the recession has affected your generation, in addition to these thoughts.
Employment
Millenials: This happens to be the generation I belong to and hearing the statistics related to employment for my generation made me feel a bit more appreciative of the job I have. According to data from the Current Population Survey, “the greatest percentage increase in unemployment between Dec 2007 and Sept 2010 happens to be 20-24 year-olds…with a college education.”
I can understand why this is the case however. The recession caused a mass exodus of talent as companies were forced to downsize. As students graduated and looked for jobs, the few companies that were hiring had to decide between hiring a kid right out of college or someone with 5+ years experience already under their belt. You don’t have to be an HR specialist to understand who got picked.
Generation X: This generation can equally share their hardships. Unlike the Millenials, Gen X had a car, a house, and a few kids. Losing a job was much tougher to bounce back from than a young kid right out of college. They even have the stats to prove it. According to the National Employment Law Project, “6 out of 10 jobs lost during the downturn were middle-wage occupations while 3 out of 4 jobs added were low wage.”
So, not only was GenX losing the most jobs, the only jobs being created to replace theirs were in the McJobs sector. A college kid or even a recent grad can survive off of $10 an hour for a short time, but not so much a GenX.
Boomers: The Boomers may have suffered the least amount of job loss, but for the ones that did, they experienced the longest spell of joblessness compared to the other generations. And if you think about it, this makes sense too.
If you are in your 50′s or 60′s and you lost your job, what incentive does a company have for hiring and paying you more than someone in their 30′s or 40′s who is also looking for the job? And if GenX had it bad taking up low wage jobs, imagine how much worse it was for these guys.
Income
Millenials: Having less jobs and a slow economy means employers were able to pay less for starting wages. In fact, according to Yale economist, Lisa Kahn, “For every one-percentage point increase in the unemployment rate, new graduates starting income falls by 7%. In addition, Don Peck in his article How a New Jobless Era Will Transform America wrote, “17 years later, those who had entered the workforce in the worst of a recession still earn 10% less than those who graduated in lusher times.”
I’m curious to see if this leads to more job hopping, as young professionals try to make up the pay difference. I don’t think those entering the job force today are oblivious to the fact that companies are lucky to give you a raise every year.
Generation X: This generation is in an interesting position. Like I mentioned earlier, this would typically be the time in your career when you are managing a team and taking on more responsibilities. Your pay is better and you are starting to build more disposable income.
However, the recession caused many of these positions to go on hold or at least get delayed as the current occupiers (Boomers) postponed retirement to try to make back the income they lost in their savings.
Bloomberg shared a fascinating infographic on this generation. According to their research, “U.S. men in their thirties had their median income fall 12% between 1981 and 2004. In addition, 28% of Gen Xers work an average of 10 hours more a week than 3 years ago.”
So not only are they making less, they are working even longer. It goes back to the post I shared with you a few weeks ago, Workaholism in America (Are Americans Lazy?). What really made me feel bad was the Center for Work-Life Policy‘s statement that, “Generation X will be the first generation who will not match their parents’ living standards.”
That’s the last thing anyone wants to hear about their generation.
Boomers: The Boomers are in a unique challenge. They suffered the lowest unemployment rate and had the highest incomes, but they also lost the most money in terms of assets. Unlike the younger generations, they don’t have the time to rebuild their losses.
Future Outlook
Millenials: Our challenge is going to come from debt. Many of us didn’t own homes when the housing crisis hit, so our assets were not destroyed. However, “Total student loan debt infamously eclipsed credit card debt last year at $850 billion dollars.“ With job openings looking bleak, many graduates decided to take on additional student debt by continuing their education in hopes of riding out the recession by the time they had their masters.
With depressed wages mentioned earlier, it’s going to take us even longer to get out of the debt we took on to get our education and start our professions and lives.
On the bright side, Millenials are entering the marketplace with some unique advantages over previous generations. We grew up during the 90′s and were exposed to technology at a young age. Many of us have used that to accelerate our learning and growth so we can enter the workforce ahead of the competition. I know several people my age who were designing web pages, making computer games, or running businesses by the time they graduated High School.
Generation X: According to some economist, this generation is sometimes called the “Wrong Place, Wrong Time Generation.” Their life consisted of a growing student debt, followed by the stock market crash of 1987, which was proceeded by the boom and bust cycles of the 90′s and 2000′s, only to be followed by the housing crisis and recession. This generation went through a consistent pattern of getting up on their feet to getting knocked back down, over and over again.
However, companies wanting to build a team capable of weathering the storms, need look no further than this generation to guide them.
Boomers: The Boomers are burdened with having less time to plan for their futures. At least the other generations can look at their plans a bit further to see what they can do to afford retirement in light of the recession.
The Atlantic said it perfectly, “Younger boomers [are] the ‘sandwich’ generation, burdened with educational expenses for their kids and, for some, health care costs for aging parents. As tuition and medical services get more expensive and the stock market lingers below its pre-recession high, even Boomers who have kept their jobs, their homes, and their savings have every right to be nervous about how the economy handles in their last years in the workforce.”
Recap
I realized there were a number of interesting statistics stated so I wanted to recap them here, where it would be easy to find.
Millenials
- The greatest percentage increase in unemployment between Dec 2007 and Sept 2010 happens to be 20-24 year-olds…with a college education
- For every one-percentage point increase in the unemployment rate, new graduates starting income falls by 7%
- 17 years later, those who had entered the workforce in the worst of a recession still earn 10% less than those who graduated in lusher times
- Total student loan debt infamously eclipsed credit card debt last year at $850 billion dollars
GenX
- 6 out of 10 jobs lost during the downturn were middle-wage occupations while 3 out of 4 jobs added were low wage
- U.S. men in their thirties had their median income fall 12% between 1981 and 2004. In addition, 28% of Gen Xers work an average of 10 hours more a week than 3 years ago
- Generation X will be the first generation who will not match their parents’ living standards
Boomers
- Boomers experienced the longest spell of joblessness compared to the other generations
- Boomers also lost the most money in terms of assets and time to recover
Your Thoughts
How do you feel the recession affected your generation or others? What positive lessons can we learn from this? How might we overcome the challenges each generation faces?
Image courtesy of AnderV
Hmm I have experienced the effects of this recession – or maybe I have.
I’m in the 20 to 24 range – with an (almost) college degree, though I just got employed last week so I suppose I’m not unemployed anymore.
I suppose I can be pretty rough out there. I feel lucky to have a job.
Fred Tracy recently posted..Pareto’s Principle (The 80/20 Rule)
Thanks Fred,
Congrats on the job. I’m glad you haven’t been devastated by the recession like some folk. I was a bit overwhelmed by all the statistics I was reading and had no idea it was as bad for some people and generations than I had thought.
Good luck buddy,
Bryce
Now that’s an interesting post Bryce… Not surprised by the statistics either.
Okay, I’m a Boomer and I lost my job back in 2007. I won’t bore you with the long drawn out reasons but I had just gotten a new position with a man who had never had an executive assistant before. Being in real estate, you can image how hard that sector was hit. Only three months into the job I was released with full pay and severance because he felt bad for having hired me and then due to the economy, had to release me soon after.
I have a niece who graduated college about five years ago now and although we told her to get that college education, she has yet to find a job in her chosen field. Bless her heart, she’s still waiting tables and her future isn’t looking too bright. It breaks my heart with what’s happening in the US right now.
Luckily for me, I own my home and I have very little debt so I’ll be okay through this now that I’m online making my living. But retirement funds have been drastically reduced due to the economy taking such a hit with our investments.
I know each generation is suffering and if you were to ask each of them I think they would all tell you the same thing. It’s not good!
Appreciate you sharing these statistics with us Bryce. Very interesting indeed seeing them on paper.
Adrienne recently posted..Fabulous Goodies For My Blogging Friends
I knew you had to have a fascinating story Adrienne. You not only have been affected by the recession but have a niece who was affected as well. That stinks.
I had many friends in college who had the same problem. They spent all this money on an education, worked their tails off to get the grades and internships to prepare themselves for a job when they got out, and then couldn’t find a job, or ended up taking a job that was a bad fit.
You understand the way to handle the recession. Be wise with your finances, avoid debt, and stay dedicated. There is always room for more bloggers if you are in the interim between jobs.
Thanks Adrienne!
Bryce
Hey Bryce,
I am a Gen X er and luckily I wasn’t affected by the recession. Part of it just has to do with being smart by not taking on “too much” debt and also being able to manage my money.
Justin | Mazzastick recently posted..Weird October- All Weird Topics All Month
Hi Justin,
That’s the trick. Learning how to take care of your needs on a budget can protect you from the volatility of the recession.
Thanks for the excellent tip,
Bryce
Hi Bryce, You make compelling arguments about the suffering of each generation due to these extended economic circumstances. I agree with you, no one gets by easily in these tough times.
But I worry most about the Millenials. I know they have the most time to recover, but universities have gotten very greedy with tuition hikes in the US and, as you point out, college debt is soaring. It is astounding that college debt exceeds credit card debt. So many more people have credit cards than college loans!
It’s a really rough way to start a career. I don’t know how the Millenials recover nor what’s ahead for my younger girls. I hope that proficiency in technology is a valued resource that allows them to be hired for their skills.
Thanks for sharing your insights with us, Bryce!
Carolyn recently posted..Kindle Library Lending Has Arrived!
The college debt stats were surprising to me as well. Some career choices aren’t even going to return the costs of the education for some decades. Makes you wonder how it’s worth it.
Also, I don’t think many of the students going into their college debt understand just how long it will take to pay back all the costs.
We all know how high the numbers are for credit card debt, so the fact that college debt has surpassed that is unbearable.
I hope all works out for your daughters. You certainly have prepared them.
Bryce
Hi Bryce,
I am a Generation X’er, from these stats it would appear that we all got the shortest end of the stick in the recession; each for different reasons. Being that I left my position back in Jan. 2009 to care for my mother before her passing, the recession wasn’t the reason for my leaving my position. However, I did think at the time that it was going to be a lot easier for me to get another position. Boy, was I wrong!
The most disturbing fact about it all is that I dare to think that we’ll recover as a nation anytime soon. What needs to take place more than likely won’t happen, especially when the powers that be are more concern about pointing fingers at whose to blame instead of fixing the issues. I fear this is just the beginning of the sting that our nation is going to feel of this recession.
Who knows? Maybe with the next election someone will actually get a clue and dig us out of this hole. If nothing else, make it a better place for those that are coming after us. I feel such remorse for the children that at this moment, don’t have a care in the world. If we continue the route that we’re going now, their “cares” will evolve much sooner than all of ours did I’m afraid.
Insightful discussion my friend. It’ll be interesting to hear what all of your readers have to say on this one. Great job bud!
Deeone recently posted..Speaking Life Into Your Situation
Thanks Deeone,
This is an incredible comment and just what I was looking for. You took the topic and added to it beautifully.
I think you are right. This recession isn’t just a thing that will blow over on its own. It will take the right leaders, changes, and time for any progress to happen. It’s not something a few higher ups in control can just fix for the rest of us.
Your point about the children was also insightful. With the Millenials graduating with more debt than any previous generation, they aren’t going to be able to afford the luxury of helping their own kids pay for school.
We may see less kids going to college in the next generation, which means a less educated America. That’s bad news indeed.
Let’s hope the Gen X and Millenials can learn from this recession and create a brighter outlook for the future.
Thanks,
Bryce
All I can say that whatever is happening in the states affect us here 13000 miles away. As your country struggle with high unemployment and high debts, we have also been affected by the economic outlooks. And I am not just talking about my country which is just a little red dot, but also those bigger ones in our regions – Taiwan, India, China, etc.
Last weekend, there was a protest that closed down Brooklyn Bridge in NY. I guess that is sign of what is too come. The Milleniala younger Gen X seems to have had it. They are taking their voices more aggressively. I am not sure how you all and now Europe is going to come out of this. The first years of change under Obama does not seem to be helping.
Some people think that the only way out is for people to strike it out on their own. Whether you are a millenial, GenX or Boomer, its probably best if you take charge of your own future rather than waiting for others to help. There does not appear to be much these others can do.
Jimmy recently posted..45 Secret Presentation Tips for a Powerful Impression – Part 3
Thanks for the comment Jimmy.
I look to you for the perspectives outside of the U.S. With how connected all of our country’s are now through the internet, bad decisions from one can spill into the others.
It’s unfortunate that our overspending has produced a negative effect for your country and your neighbors.
I think you’ve got the right idea. It’s crucial to take charge of your own future. We are a business of one. That’s why I’m sure so many of us put the effort we do into our blogs and sites.
To give us some control over our future.
Thanks,
Bryce
Hi! Bryce,
I’m in Gen X er which not affected by recession, Handling wise the money and not taking to engage with “too much” debt partly, Agree with Justin says also.Thanks
I am a Gen X er and luckily I wasn’t affected by the recession. Part of it just has to do with being smart by not taking on “too much” debt and also being able to manage my money
elpidio recently posted..Independence Day: An unusual Style Of Celebrating Freedom
Hi Elpidio,
It’s looking like the Gen X crowd was probably the safest from this recession according to the comments. Possibly due to the reasons you said here about being wise with money and avoiding debt.
Thanks,
Bryce
Indeed Bryce, it is tough out there for many, many folks. Equally as important as staying optimistic is being realistic and prepared to face A LOT of NO’s. Nothing sets us up for failure more than feeling discouraged. This feeling sets up a troublesome condition – a consciousness of scarcity. In hard times it is vital to take command of the mind and relate to life in an enthusiastic way. Know, that there is a unique richness that comes with feeling enthusiastic about life in the face of adversity.
rob white recently posted..FEAR
Excellent points Rob, and it goes along with your recent post on Fear.
We can’t let the NO’s or FEAR discourage us. There still are success stories and amazing feats happening every day. Like you said, be realistic and prepared. This will set you up with the best chances to succeed.
Bryce
Hey Bryce,
All I can say is that is has affected us all, speaking as an Army Veteran. You would’nt believe how this have impacted the soldiers who were just recently released from active duty. I got out of the military in 07 during the peak of the economic downturn.
I did a few contract jobs for a few prominent companies, but nothing was really solid. I never did make it back to my parents house, I guess since I’m married, that would be awkward.
I do believe history repeats itself, because this is quite similar to the way things were after the Vietnam War era.
Vic recently posted..Are you holding a grudge? Here is how to stop it.
Thanks Vic,
You bring up a good point and one I completely missed. The Vietnam War era was quite similar. We were fighting a war based on a preemptive strike. Our government spent billions of dollars to uphold it, and the troops suffered as a result.
I have a buddy who came back from the Navy during the recession and he’s having it hard as well.
Thanks for the fresh perspective and new look on the topic.
Bryce
Just as ‘depressing’ or ‘recessing’ on this side of the world, Bryce. The great thing is that Life rolls on regardless. Keep an eye open for the “opportunities”.
be good to yourself
David
David Stevens recently posted..The Imagination series (part 2)
Indeed! It’s important to keep a positive attitude going. The world moves on and recessions never last forever.
Thanks for the positive look on life David.
Bryce
Hi Bryce,
Very interesting article. I would be in the category of Gen X’s (32-46). I completely with the findings. Several of my friends are struggling to find better and more fulfilling positions. Fortunately my job is going well. Other than the company doing away with the cafeteria, no raises one year and limited travel, the recession hasn’t affected me much. Thanks for this insightful comparison. All I know is that my future, as far as how much money I have when I retire, is pretty much in my own hands.
Lisa H. recently posted..Raise Your Head, Stand Up and Be Counted
That’s great Lisa!
We are definitely some of the lucky few. The people I know who lost their jobs and had to find new employment were all very hard workers. Just goes to show how tough this recession really is.
Thanks for the comment,
Bryce
Wow Bryce you hit a big topic here. Things are a bit different now.
To start with we do need some good leaders and not all this fighting going on in DC. People have gotten soft, because everything is at there finger tips.
As Americans our proprieties have gotten all turned around. it is not about the people anymore, but the money. We have lost what this country was build on.
As our currency states “In God We Trust.” That trust has been replace by just money. We are out of alignment because we have forgot what is really important.
Actually i believe that the boomers have it the easiest, because they know how to get through rough times. We know how to cut back and get back to basics. Yes, i am one of those. LOL
There is always a lesson to learn in every situation. Used right this can make the younger generations stronger. We have to remember we as Americans are survivors. And by the PEOPLE working together whether it is family, communities we can become stronger.
I do believe however that the middle class is going to have to stand up and be counted in a very strong way, if not there won’t be a middle class.
The country and the world is changing and maybe it is time we strongly think about keeping God in the middle of this world. I could say more, but instead I’ll just keep praying. Sometimes that is all we can do and the right answers come to us.
You take care and like I said very interesting topic.
Blessing to you,
Debbie
Debbie @ Happy Maker recently posted..How to Know that you are in a Healthy Relationship!
Indeed, the motto of today has become “In Money We Trust”. Money seems to be on top of everyone’s minds.
I have high hopes that this will be an excellent learning experience for the young. I know many of my age group are able to buy affordable homes and keep their debts lower because of the over spending of previous generations. Maybe this will carry through to wiser business spending and decision making and pulling together communities like you said.
I try to keep positive about this situation. It’s something we really should all strive for.
Thanks,
Bryce
The biggest impact of college students not being able to find jobs is that they are settling in jobs they dislike instead. They are setting for jobs at coffee shops or nannying – the jobs that they don’t need a college degree to do. They are staying in jobs they hate because they think there are no other jobs out there for them. Many of my friends hate their jobs right now which is so sad!
classycareergirl recently posted..The Easiest Hair Style Ever for Women at Work
Thanks Anna,
I agree 100%. I was one of those. My first job out of college was cold calling. Awwwww!
I loved the jobs I held throughout college. I was a rep for Dell, I was a consultant for Microsoft doing tech training for their distributors like Verizon and Fry’s Electronics. When the best job I could get quickly out of college was a cold calling IT sales job I had a major wake-up call. Granted it was better than waiting tables or serving coffee, but like them, I felt the job didn’t really take advantage of my degree, education, or skills.
I feel for the recent grads that are in that position.
Thanks Anna
I’m not certain American life will ever be the same after this most recent recession. I think it’s going to be a challenge for Millennials to rebound and adapt the “American dream”-type life.
It’s hard to say who got hit the worst – it’s pretty bad across the board. But I think everyone has to embrace change and realize that those the are amenable to it stand the best chance of thriving in the future.
Jeffrey Trull recently posted..Earning More: Short- versus Long-term Projects and Income
Yep, the playing field has been leveled and Millenials will have to work intelligently in order to obtain the “American Dream” in the future. The game has changed and we will have to play harder than ever before.
Awesome post on your site btw.
Have a good weekend,
Bryce