Monday, September 19, 2011

Shhhh ... Don't Tell the Kids

     It's no secret we are living through the worst economic time of our lives. This era is worse than the stagflation and oil shocks of the 1970s; some even argue it's as bad as the 1930s. The dirty little secret is that, as bad as it is for us Baby Boomers, it's worse for our children.

     According to a chart from Rortybomb, overall joblessness is more than twice as high for 20-somethings as it is for older workers. And the greatest percentage increase in unemployment between the end of 2007 and the end of 2010 was among 20 to 24 year olds with a college education!

     Yale economist Lisa Kahn says young adults will most likely see their career opportunities permanently diminished by this recession. She did a study of men who graduated during the early '80s recession, and found that all else being equal, for each one percent increase in the national unemployment rate, the starting income of recent graduates fell by 7 percent. And 17 years later, those who entered the workplace during the recession were earning 10 percent less than those who started their careers in better economic times.

     As Don Peck writes in a long article in The Atlantic, for Millennials (people born in the 1980s and '90s), the problem is not just the money they're not making today, it's all the money they won't make tomorrow. Not only do these young adults fall behind on the ladder of raises and promotions, but they are actually missing out on job skills. When you're in your 20s, in a first career-level job, you're learning skills, building a resume, developing contacts -- in short, learning the ropes. But if you squander four or five years at a low-skill stop-gap job, you miss out on that education. It doesn't take long to go from a promising 22-year-old college grad with an honors degree, to a 28-year-old drifter who can't keep a job.

     To add insult to injury, even as the job market for 20-somethings has dried up, these young adults are carrying more student debt than any generation before them. Last year, for the first time, total student loan debt surmounted total credit card debt, at some $850 billion. And, believe it or not, college and graduate school costs are going up even faster than health care costs.

     Those of us who had children early, with kids now in their 30s, may have escaped much of these economic headwinds. The kids got their careers established before the great recession, and they've managed to hold onto their positions. And maybe those later Baby Boomers, whose children are still in high school, can hold out hope that the economy will improve by the time their kids graduate from college.

     But those of us with kids in their 20s know first hand that the business world has turned its back on a whole generation. Between us, B and I have four kids ranging in age from age 20 to 28. One is still in college; another is in graduate school; and two are trying to launch their careers out of the current economic quicksand.

     My own son recently told me he got a promotion. "Now they're almost paying me a living wage," he said sardonically.

     I told him, "Hey, you're doing pretty well these days if you're pulling in a salary that almost pays you a living wage." He nodded, acknowledging that a lot of his friends are working retail, or working part time, or going to school because they couldn't get a job at all, or sitting at home because they couldn't get a job.

     So what can we tell these 20-something kids?

     Despite the dismal statistics for college graduates, I still believe people are better off with an education. We live in an information age. Most good jobs require people to research, develop, manipulate, analyze and present information. The better you are at these tasks, the better your job. The more sophisticated and specialized your skills, the more in demand your services will be. Many jobs that used to require a bachelor degree now require a master's. But ... a warning. Education is expensive. I would be careful not waste your money getting a degree you'll never use. And don't bet your future developing skills that are not in demand. In other words, study business, engineering, teaching or nursing. Don't major in art history or sociology or English literature. Not unless you're really passionate about the subject and have a plan for how you can turn your passion into a reasonable career

     I'd also advise people to learn a practical skill. "There are many slips between glass and lips," as the old saying goes. No matter how promising your field, how good you are in your chosen profession, the world changes and can make almost any job obsolete. So don't end up like my brother in law, who made a pretty good living in the construction industry -- until a few years ago. But he had no skills to fall back on, and is now driving a delivery van for minimum wage. So learn how to cook or tend bar; get some experience as  a coach or camp counselor; take some practical courses in software and computing; and don't be afraid to get some experience as a salesman. A practical skill to fall back on, if for some reason your career collapses.

     I've said this before to our kids, and I'll say it again. Learn another language. There will always be a job for someone who's first language is English, but who is fluent in Spanish. There will likely be opportunities for people who speak Russian, Japanese or one of the Chinese languages. Okay, I admit it. Learning Russian or Chinese is hard. But come on. Millions of Chinese and Russians have learned English. If they can do it, so can we. And by the way, for those college kids spending a semester overseas, don't waste it by going to an English-speaking country. That's a vacation. Go to a country where you will learn the language and the culture.

     Don't be afraid to move away from your home town. A lot of the 20-somethings I know are clinging close to home. Many are actually living at home. They're scared, and home provides security. But staying at home is not the American way. We wouldn't be here if our grandparents hadn't left Poland or Italy or Ireland to seek a better life here. And they didn't hesitate to move west to Colorado or California to seek better opportunities. So I'd encourage the kids to expand their job search. There's no reason to stay in the Northeast or the Midwest if there are no job opportunities. Go to South Carolina or Texas or Arizona. Or, maybe even Brazil or Russia or India. In a global economy, it's unlikely that the best opportunities will be in your backyard.

     If you can, join a union. I saw a bumper sticker the other day that said: Unions = Jobs. I actually do not believe that. I think unions can be exclusionary and might even kill jobs by driving up the cost of labor. But that's the point -- if you can get into that exclusive club, then a union will help you get better pay and benefits, as well as protect your rights as an employee.

     And finally, to the parents of all those 20 somethings, I'd say -- please be supportive. Don't blame them for the bad job market. Don't blame them for getting discouraged. Don't blame them for either taking a crappy job, or for turning down a crappy job. Just help them become "the best that they can be."

     And if you have any other helpful advice for how they can do that, please let me know. I'll pass it on to our four 20-somethings who are struggling mightily to make their way in a hostile world.


#1Nana said...

I have two children. What a difference the two years between them made in their ability to get a job after college. My 33 year old daughter is a highly paid professional. My son is working in a low paid paraprofessional position. He has medical insurance and a retirement plan, but lives at the poverty level with little chance for advancement. Not the American dream we envisioned for our children.

Douglas said...

Overall, I think you provided some excellent advice. But education is not the answer alone. You must be able to use it, to enhance it, to apply it creatively. I am reminded of the Scarecrow in the Wizard of Oz:

"Why, anybody can have a brain. That's a very mediocre commodity. Every pusillanimous creature that crawls on the Earth or slinks through slimy seas has a brain. Back where I come from, we have universities, seats of great learning, where men go to become great thinkers. And when they come out, they think deep thoughts and with no more brains than you have. But they have one thing you haven't got: a diploma."

A better brain PLUS an education equals success. Education alone just helps you get employed.

Lucie said...

I have 3 children in their 20's and what I see happening as well is they know they need to stay put in the jobs they are in now since they make half decent incomes, however they are unhappy with the jobs themselves. The opportunities for advancement are no longer there and they are rapidly losing their zest for optimizing their careers. Its crazy to leave a job and yet going back for more education is not an option because they cannot afford to not work and rack up more debt.

I find it sad on all fronts for them and hope things turn around soon.

Anonymous said...

Excellent advice. Not much I could add. I do feel a bit guilty as a retiree for while I haven't received a cost of living adjustment in years, I still have that regular paycheck.
Things have to turn around soon.
Arkansas Patti

Nance said...

I shall pass this on to my 19 year old step grandson, who is struggling now. I worry that the lingering financial crisis will eventually pit generations against each other. At some point, it will be either student loans OR Social Security, decent public education OR Medicare...and that breaks my heart, for those of us who truly recall being young and starting out know that we can be their very best supporters and mentors.

Dr. Kathy McCoy said...

Excellent advice, Tom! I would add just one thing: rethink expensive colleges that will put students in extreme student debt. A number of state schools are excellent and are establishing Honor Colleges to keep top students in-state. Check those out -- also community colleges for the first two years can be a real saver. And I so agree with you about getting a practical degree. My sister went to a community college nursing program. She has an A.A. degree, is an R.N. and makes more money than I did with a Ph.D.! She can get a job anyplace -- and she also loves her work. There is a lot of value in having in-demand skills. It's a bonus if these are your passion. If they're not, pursue your passion in your free time. These are scary times, indeed. I really feel for the twentysomethings.

Gabbygeezer said...

Excellent advice that deserves wide circulation. When Dr. McCoy's comments are added, I can't think of a thing to contribute to the discussion, except advice to be persistent. This economic situation, like all others, is not forever. Things will improve, and those suffering now need to maintain hope that better days lie ahead. said...

Those of us in my generation, who spent our lives as "housewives" which I was until I was age 35 and got my first real job, started our 'careers' with a disadvantage. Also, we weathered some tough economic times.

Somehow, many of us managed to turn that disadvantage to our benefit and retire on a decent income. I don't think it helps to be pessimistic. I have 3 granddaughters in the 20-24 age range and they are all working. They are doing menial jobs for sure, but working. I did menial jobs for 20 years before my education paid off. The unemployment rate for 20-24 year olds is now 15%. This means the majority of them are working, if they want to.

Read the feature articles in the Economist magazine the past two weeks on education, jobs and labor. Thirty percent of employers say they cannot find the help they need for the jobs they have. The answer is to upgrade your skills. Study math!! and/or look for work in the health care industries. Somebody has to take care of aging baby boomers. Companies are going over seas for skill hires.

Good post and provocative.


Anonymous said...

My 30 year old has a great job but wishes she could quit and follow her passion as an editor. She can't. So she suffers and complains and holds down the fort while her ex-executive husband quit and followed his passion to be a film producer. My 33 year old did manage to quit her great job after 11 years and follow her passion as a photographer but makes no money. Her husband supports them and they're sort of broke.

So, it takes two. One to hold down the fort. The other to follow their dream. Hopefully, in the future, the roles can reverse.

All are very well educated, paid their own college expenses and work long and hard. My youngest puts in many, many days till midnight. It's not easy for any of them.

One worked 1.5 years in Hong Kong. I worry that at any moment another one will call and say they are relocating to CA or something.

Global world indeed.

Midlife Jobhunter said...

I have a few of those 20's somethings, too. Like all of mine. Oldest working in his field. Middle one, always working, but only adding to his resume that he is working. Not in his profession. Youngest still in school. Guess I should have had my kids in my teens.

Knatolee said...

They are predicting a large workforce shortage in Canada in the coming decades, as boomers retire without enough people to fill vacant jobs. Maybe they should move up here! ;) Otoh, who knows what will happen to our economy in the coming years? I have a few friends with 20-something kids who seem to be drifting through life right now, trying to figure out what to do. It's hard for them.