Recession changed millennials’ outlook.
Heather Axtman was a senior in college in 2006 when she landed an internship at Thomson Reuters. By the time she graduated from the University of Minnesota, the company had offered her a full-time job. She’s since been promoted several times. Now 33, she manages a team in the marketing department.
“I’ve worked my butt off to prove myself, but my timing was pure luck,” she said.
Things were different for Kendall Bird, who graduated from the University of Northwestern-St. Paul in 2010.
“I was naive about how hard it was going to be coming out of the gate,” said Bird, now 29. “The landscape was so crowded and competitive.”
Despite sending out countless resumes, combing job boards and networking to build contacts, she ended up taking an internship instead of a job, being a nanny (for minimum wage) and moving home. It took her more than two years to get a job in her field.
While they’re only a few years apart, the experiences of these two millennials couldn’t be more different. What changed between Axtman’s graduation and Bird’s? The Great Recession.
Although the economy has largely recovered, the younger cohort of millennials may not have. New research indicates that the recession has acted as a great divide for this group of 72 million, born between 1980 and 1995.
Bridgeworks, a Wayzata, Minn., consulting company that advises businesses on generational dynamics, commissioned a study of millennials and found distinct differences between younger and older millennials.
“Millennials are a complex generation, and we’re seeing that their experiences are very different from oldest to youngest,” said Hannah Ubl, research director at Bridgeworks.
The early millennials, born from 1980 to 1987, remember dial-up internet, using AOL screen names for instant messaging, watching movies on VHS tapes and attending Y2K parties.
“They were raised to be optimistic and were told they could be whatever they wanted to be,” Ubl said. “They graduated into a strong economy and got a good foothold into adulthood.”
But almost overnight, that upbeat outlook turned gloomy for their younger brothers and sisters, whom some call the recessionists.
Born between 1988 and 1995, they used technology at an earlier age, with Wi-Fienabled devices and the iPhone arriving in their adolescence. They downloaded music, watched movies on DVDs that arrived in the mail from Netflix and rode to school on their Razor scooters.
Those younger millennials, however, were in the unenviable position of trying to launch careers after the housing market crash, when unemployment jumped and hiring stalled.
In the worst economic downturn in 80 years, the recessionists had to compete with laid-off adults for service jobs. They worried that the college loans they’d taken as a bet on a post-graduation middle-class life would prove to be poor investments.
“I say that finding a job during the recession was like working out with training weights,” said Jeff Lane, 29, who graduated from college in 2009 and worked in a coffee shop instead of starting a business career.
“When I couldn’t even get an interview, it docked my confidence,” he said.
Like the early millennials, the recessionists had been raised to follow their dreams, but the advice they had been given all their lives began to ring hollow.
“All of a sudden, the message changed. It was, ‘Expect rejection, expect to struggle, even the best among you,’” Ubl said. “They were back in their parents’ basements and back on their parents’ health insurance. They felt lied to.”
Today, an economic recovery is on track and, in Minnesota, a low employment rate has many businesses and nonprofits struggling to find enough qualified workers to fill their jobs.
But employers and hiring managers who want to recruit — and retain — a millennial workforce should appreciate the different attitudes and expectations of the two groups.
“Early millennials care more about autonomy. They’re more likely to want freedom in choosing where and how they work, who they work with and what their schedule is,” Ubl said.
Meanwhile, the recessionists tend to be motivated by money.
“Paychecks are always important, but for the later millennials, workplace satisfaction is much more tied to their ability to earn a salary and pay their bills, so they will have enough to live where they want to live,” Ubl said. “The early millennials believe everything will work out. The recessionists are less trusting about that.”
And those younger millennials may have good reason to be mindful about their paychecks.
History would suggest that the fallout of the economic downturn will continue to haunt the recessionists, who began working when entry-level salaries were suppressed.
“We’ve seen that those who happened to be unlucky enough to have entered the labor market in a recession may never really recover from it,” said Wendy Rahn, a political science professor at the University of Minnesota.
Economists at the Federal Reserve have found that lifetime earnings tend to hinge on an individual’s first decade in the workforce, with those who earn less as they begin their careers never catching up.
The Economic Policy Institute tracked lifetime pay for employees who started work in previous recessions and found that as a group, they experienced lower wages and fewer opportunities.
And real estate company Zillow’s research concludes that graduating into the recession has an “immediate and lasting effect on young adults’ homeownership rate.”
Stalled attempts to fire up their careers may also create ongoing financial worry in the younger cohort. Ubl suggested that their early difficulties could turn them into modern-day versions of their grandparents, the generation that survived the Great Depression and took thriftiness to extremes, always pinching pennies and saving plastic bags.
“Their brains were still developing during this time. I think this will color and shape their impressions for a lifetime,” Ubl said.
“It marked them in a profound way, and it will always be part of them.”