Millennials: Indebted, Independent, But Optimistic About the Future

Source: Thinkstock

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Source: Pew Research

A great demographic shift is taking place in the United States, a shift spurred by the Millennial generation, or Generation Y. These individuals, aged between 18 and 33 years old, are forging a distinctive path into adulthood compared with older Americans, noted Pew Research in a study released March 7. As a group, they are relatively unattached to organized political or religious institutions, tapped into social media, burdened by debt, distrustful of people, in no rush to marry — but highly optimistic about the future. As any survey of more than 85 million people would, the data paints a contradictory picture of a generation that has been highly villainized (Time Magazine called them the “Me,Me, Me Generation”), praised, misunderstood, and analyzed. And, there is good reason for that analysis; by 2025, Millennials will make up a majority of the workforce. The changing societal and political attitudes held by those born after 1980 will also present a challenge to both political parties in coming elections. Their changing societal and political attitudes are important not only to the politicians that seek their votes but to the companies that hire them and to the marketers trying to sell to them.

(1) Millennials are the most racially diverse generation in American history:

According to the Pew Survey, Generation Y is the most diverse generation in American history, a trend propelled by the large wave of Hispanic and Asian immigrants who have been coming to the United States for the past half century, and whose American-born children are now aging into adults. Forty-three percent of those Americans born after 1980 are non-white.

In actuality, the Millennial generation is a transitional one. For, now they are the most diverse adult generation in the country. But those Americans under 14 are significantly more diverse, and a slim majority of newborns in America are non-white. The U.S. Census Bureau projects that a majority of the entire United States population will be non-white sometime around 2043.

(2) Millennials have fewer attachments to traditional political and religious institutions:

Pew found that Millennials are less likely to identify themselves as Republicans or Democrats. Not only do half of all those in Generation Y choose not to identify with either political party, but only 31 percent say there is a significant difference between the Republican and Democratic parties. More people in older generations, including 58 percent of the Silent Generation, say there are big differences between the parties. The survey also revealed that half of Millennials describe themselves as politically independent.

Screen Shot 2014-03-07 at 1.26.08 PMMeanwhile, almost three-in-ten, or 29 percent, say they are not affiliated with any organized religion. The  level of political and religious disaffiliation expressed by the generation is at or near the highest ever recorded for any generation in the quarter-century that the Pew Research Center has been polling on these topics.

But even though so many Millennials describe themselves as political independents, the generation votes overwhelmingly Democrat and expresses liberal views on a wide variety of issues, ranging from supporting same-sex marriage to marijuana legalization to bigger government. Although on several other social issues — including abortion and gun control — the views of Millennials are not much different from those of older generations. They also are far more supportive than older generations of President Barack Obama and continue to view the Democratic Party more favorably than the Republican party. In fact, the Millennial generation is the only one in which liberals are not significantly out-numbered by Republicans

Obama was swept into the White House in 2009 on a tide of support from the nation’s young adult population, with national exit polls showing that the young to old partisan voting gaps in both 2008 and 2012 were among the largest in the modern era.

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Source: Pew Research

But even though Millennials are more supportive of Obama; and even though they support universal insurance by the widest margin of any generation, with 54 percent in favor, their view of the Affordable Care Act is just as negative as the rest of the country.

(3) Millennials are more burdened by financial hardships than previous generations:

The Millennial generation has higher levels of student loan debt, poverty, unemployment, and lower levels of wealth and personal income than the two preceding generations had at the same stage of their life cycle. A report released Friday morning from the Department of Labor’s Bureau of Labor Statistics showed the unemployment rate for young Americans is much more elevated than the broader population: 13.5 percent for people between 15 and 24 and 12 percent between ages 20 and 24.

As that still-stubbornly-high level of unemployment suggests, the difficult economic circumstances plaguing the Millennial generation partly reflects the impact of the Great Recession, which spanned 2007 and 2009, as well as the longer-term effects of globalization and rapid technological changes. Now, median income in the United States remains below the high reached in 1999, and wages are experiencing the longest stretch of stagnation in the modern era. Meanwhile, income and wealth gaps have widened.

For older Millennials, the timing of these macro-economic trends coincided with their entrance into the workforce. Those who began searching for jobs in 2007 and 2008 were met with a labor market hemorrhaging jobs and an economy in deep recession, from which it has yet to recover. Given this tough reality, seven in ten Americans say that today’s young adults face more economic challenges than did older generations.

It is true that a third of Millennials between the ages of 26 and 33 have a four-year college degree, making them the best-educated cohort of young adults in American history. Of course, as in past decades, education attainment strongly correlates with economic success. And, in what Pew termed “an increasingly knowledge-based economy,” young adults that did not advance beyond high-school level are at a disadvantage; they face lower wages and higher levels of unemployment than their counterparts. But those college-educated Millennials are not without their own economic burdens: debt. Two-thirds of recent bachelor’s degree recipients have outstanding student loans, with an average debt load of approximately $27,000. Comparatively, two decades ago, only half of recent graduates had college debt, and the average was $15,000.

Partly because of economic hardships, young adults have been slow to marry. The median age Millennials chose to get married is at a historical high for the modern era: 29 for men and 27 for women. Furthermore, contrasting to marriage patterns of earlier generations, when adults in all socio-economic groups married at roughly the same rate, marriage is now more prevalent among those with higher incomes and more education. Low marriage rates also likely contribute to another Millennial trend, out-of-wedlock births. In 2012, 47 percent of births to women in the Millennial generation were non-marital, compared with 21 percent among older women. For comparison, in 1996, when those of Generation X were approximately the same age as Millennials were in 2012, only 35 percent of births to that generation’s mothers were outside of marriage. Ironically, Millennials disapprove of this trend as much as elder generations, according to Pew.

(4) Millennials are low on social trust, but high on social sharing

Screen Shot 2014-03-08 at 9.26.01 AMMillennials have entered into adulthood with low levels of social trust, Pew found. In response to a the survey question, “Generally speaking, would you say that most people can be trusted or that you can’t be too careful in dealing with people,” just 19 percent of Millennials said most people can be trusted, compared with 31 percent of Generation X, 37 percent of Silent Generation and 40 percent of Boomers. Pew postulated that the racial diversity of Generation Y is the cause. A 2007 Pew Research Center analysis found that minorities and low-income adults had lower levels of social trust than other groups, likely because people who feel vulnerable or disadvantaged for whatever reason find it more difficult to trust when they are less able to deal with the consequences of misplaced trust.

Yet, despite low social trust, Millennials mirror the attitude of older generation in terms of big business and the role of government. In fact, they are as likely as older Americans to have a favorable view of business and more likely to favor an activist government.

While social trust among Millennials may be low, they have turned to the new platforms of the digital era– the Internet, mobile technology, and social media — to construct networks of friends and colleagues. Pew termed the generation “digital natives,” as they are the only generation who did not have to adapt to the new technologies. As a result, they are among the most avid users of social media. For example, 81 percent of Millennials are Facebook (NASDAQ:FB) users, with an average friend count of 250 — far higher levels than that of older age groups. The survey also confirmed that how Millennials place themselves on social media is also distinctive. Fifty-five have posted a “selfie,” a photo taken of oneself, on a social media network, and no other generation is as inclined to do the same. Only about six-in-ten Boomers and approximately a third of the Silent Generation say they know what a “selfie” is, although the term had acquired enough cachet to be named the Oxford Dictionary’s “word of the year” in 2013.

(5) But Millennials are the nation’s most stubborn economic optimists:

Despite their current financial burdens, more than eight in ten Millennials polled by Pew said they either currently have enough money to lead their lives as they want, 32 percent, or they expect to in the future, 53 percent. No other generation of adults is as confident; although, when those members of Generation X were the age Millennials are now, they were equally as confident about their economic futures. As Pew noted, this optimism may simply reflect the “timeless confidence of youth.”

This confidence comes even though Pew Research found that 51 percent of Millennials say they do not believe there will be enough money left for them in the Social Security system when they retire. Still, 61 percent of Millennials do not believe benefit cuts are the right way to address the problem, while seven in ten adults say benefit cuts should be implemented to address the long-term funding problems.

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