We’re more likely to be part of Occupy Wall Street than the Tea Party. We’re more likely to read blogs than newspapers and play video games instead of bridge. Many of the things we do are unique to our generation.
With all the things that make Generation-Y different from previous generations, are financial struggles one of them?
Generation Y’s Differences
There are any number of economic differences that make Generation-Y unique from the baby boomers and the “greatest generation.”
Here are just a few of these differences:
- No guarantees – Generation Y’s biggest economic disadvantage might be living in a world without guarantees. Whereas most every boomer and certainly every one of the greatest generation were guaranteed a manufacturing job and a pension, there are no such promises today.
- More freedom – Generation Y has a few big freedoms, including the financial freedom to save and invest. As I addressed in a previous post, guaranteed pensions given to workers in the 1970s drastically increased the savings rate among middle class families leading all the way up to the 1980s. Where most employees were forced to save a portion of their salaries in defined benefit plans, Generation Y has only the choice to invest in defined contribution plans when made available.
- More responsibility – Given that Social Security displaced the pension In the United States, Generation Y certainly has far more responsibility to previous generations than generations previous. Social Security’s trust fund is merely an accounting gimmick, backed only by IOUs from the US Treasury. The year 2011 brought a Social Security cash flow deficit of roughly $60 billion.
- Economic Calamity – Few generations have experienced a longer recession during the periods most crucial to career development and wealth accumulation. The wealth distribution and income inequality has never been as tilted as it is today, and there’s no sign of a changing tide.
Do Baby Boomers “Get” Gen-Y?
Do the baby boomers who created the consumption economy of the late 80s and 1990s really understand Generation Y?
Is generation Y at a disadvantage that the boomers nor the “greatest generation” never experienced?
Are Generation Y’s struggles really difficulties, or just whining and complaining from another entitlement generation?