I recently read a very thought-provoking piece by Hanna Brooks Olsen at Medium, entitled “Let’s Talk About Millennial Poverty”. If you haven’t already, I recommend you check it out here. It’s an interesting commentary on the overreaching current economic situation of Generation Y, supplemented by various statistics and citations of data supporting Hanna’s claim.
The claim that as a generation, Millennials are headed towards irrevocable poverty. I think that might be a bit extreme, but I absolutely agree with the idea that we’re not as financially stable as our preceding generations, and this situation has the potential to affect a lot of things.
She writes, “In the United States, approximately 15% of residents live below the poverty line and another 10.4 million are considered ‘the working poor.’ And yet, we have very, very concrete — and very incorrect — perceptions about how poverty actually looks. And it does not look like Millennial college grads. So we kind of keep ignoring it.
The disconnect is simple: Poverty doesn’t look the way we think it looks, so we don’t think people who are, in fact, poor ‘look poor,’ so we assume that poverty isn’t really that bad. We also assume that by taking steps that have traditionally been associated with improved economy status, it will get better.
We are now seeing that it might not.”
Now, I can’t speak for her situation as it was when she wrote this piece in early 2015, but she makes a really valid point. I’m not one to say who deserves to live in poverty and who doesn’t based on their life situations and decisions. I’m only intrigued by the notion that many Millennials at the moment are living below a certain standard while the cost to do so is high above their means. From my own experience, I can recall many of my friends, myself included, who were told to pursue their dreams through a college education, only to find those dreams hindered by one or more obstacles – lingering debt, mediocre employment prospects, and the rising cost of living in tandem with rising salaries.
If you think about it, there is very little justice for people like us. We’re told that we can do anything we want, only to find that it might not be so and we’ll spend the rest of our lives paying it off. This detriment to personal finance impacts other things, too. As Hanna wrote, “I don’t own a vehicle, and I likely won’t be anywhere near able to afford homeownership until I’m well into my 30s (no matter how many people tell me it’s ‘actually not that hard’ to get together a downpayment) in no small part because I started my path to adulthood, as I was told to do, at a five-figure deficeit.” In fact, I was at a business breakfast a while back, and when speaking to a mortgage officer at a local bank, I asked how Millennial debt would affect the continuing issuance of mortgages. His reply, grimly – “Not good.”
So in spite of these issues, how does the business world react? How will the business world react, when we fully assume parenthood and higher, C-suite roles within companies and organizations? As financial situations reflect purshasing behaviors and decisions, I think it would behoove companies to respond through their product and service lines to changes in the economic ecosystem. Certainly the housing market will be impacted, but what about automobiles, as many millennials in recent years have flocked to urban areas with viable transportation systems, thus eliminating the need for a car? What about banks, facing a dillemma with millennials who have reduced faith in their kind of institution, as well as increased ability to bank online and on phones instead of in a branch?
Finally, there’s the issue of professional advisors – accountants, attorneys, financial advisors. From a client standpoint, the goals with millennials are to have them look towards the future – save money and plan accordingly. But from the other side of the desk there are interesting dialogues to be had. As millennials reshape the economy with the meager amount of money they might have, what does that mean for accountants and advisors? They’ll have to constantly keep abreast of changes and trends, but from a workplace standpoint, how will having less money than their precendents and coveting increased independence in thought and lifestyle change advisory? And as it changes the scope of advisors, thought leaders for every conceivable industry, how will the paradigm shift spread across the entire economic spectrum?
Hard to say. I’m not really sure what the future holds for us as a generation. We’re certainly not holding ourselves to the same standards as the Boomers or Silents, but maybe that’s not a bad thing. Maybe this change in ideology will bring about a better working world, one that reflects the consciousness of Millennials to create a world compatible with their beings. Or, inversely and morbidly, it could cause the working world’s demise, as fashioned by the generation’s self-interest and lack of a substantial financial safety net.
All I know is, I’ve got my popcorn, so I’ll just sit idly by and continue the conversation with you all while we watch it unfold.