Article: American Dream Fades for Generation Y Professionals

[rescueme]

Yeah, it was much easier for the 1950s IBM employees when they could wear any color shirt they wanted (as long as it was white and came with a tie) and could sing the company song each morning as loudly as they wanted...

You mean like the military?

Yeah, I was there - a long time ago...

 

[target2019]

Perhaps Gen X and Y need to eperience chainsaw AL's nurturing management style. Real name Albert J Dunlap.

He pretty well wrecked Sunbeam as a "savior" CEO. Then the board of directors fired him. A bit late and 200 mil or so in the hole.

Chainsaw Al had his way with Scott Paper too. His payout was extremely large.

 

[Hamlet]

Even worse, these median wages are for a workforce that has a much higher level of higher education. For non-college-educated men, wages have actually dropped fairly dramatically.

From the studies I've seen there is no surplus and real wage growth for the majority of americans has been flat. E.g. see the article by Mishel:

The wedges between productivity and median compensation growth | Economic Policy Institute

Most of the productivity gains have been going to the owners of capital not workers. Median compensation only went up 10% in the past 40 years. If you're a male, the median changed by a infinitesimal 0.1%.

 

[Huston55]

What you describe spans every generation since Adam.

Yeah! +1

So, stop whinin' and straighten up your tie while you're at it...youngin!

 

[Bestwifeever]

I'm GenY....

After several years working, I no longer see the point in wearing a suit & tie if all I am going to do is sit in my cube and do email/powerpoint/excel. Sure, if someone is meeting with customers or a VP, put a suit on. But the rest of the time, I don't get it.

It is especially important to look professional when you are preparing your TPS reports.

 

[Nords]

You mean like the military?
Yeah, I was there - a long time ago...

As a submariner, I really enjoyed filling in the three-part harmony of [-]Anchors Aweigh[/-] "We will... we will... nuke you..." It was always a big hit back in the engineering spaces.

 

[FUEGO]

From the studies I've seen there is no surplus and real wage growth for the majority of americans has been flat. E.g. see the article by Mishel:

The wedges between productivity and median compensation growth | Economic Policy Institute

Most of the productivity gains have been going to the owners of capital not workers. Median compensation only went up 10% in the past 40 years. If you're a male, the median changed by a infinitesimal 0.1%.

I went straight to the Census historical real household income data (caution: it's an excel spreadsheet) and it does appear the bottom 3 quintiles didn't have a lot of gains in HH income the last 45 years or so (as far as that data went back). Each of those quintiles only saw between 12 and 20% gains in real HH income over the last 45 years. Looking at the top 2 quintiles, they both experienced much better real HH income gains (37% and 70% for 4th and 5th quintiles, respectively). I would surmise many on this board fall in the 4th and 5th quintiles and would have seen significant increases in real HH income over the last 45 years (or in households like theirs if their household hasn't existed that long).

For reference, the 4th quintile had a mean HH income of $80,080 in 2011. Around here, a household consisting of a public school teacher and a police officer or firefighter would just about break into the 4th quintile with zero years experience, and it wouldn't take long before they were solidly in the 4th quintile. Just trying to point out the 4th quintile isn't full of Phd's and MDs or those with amazing technical skills, but "average" people (and I don't mean that in a derogatory way).

So for the welfare class, the working poor or unskilled worker, they may not have seen a lot of household income growth over the last few decades. For the upper quintiles, there certainly has been decent real increases in HH income historically.

And we are currently in a slump in real HH income growth, and haven't seen much the last 10 years (in fact all quintiles but the top one saw declines in real HH income the last 10 years, and the top quintile was under 1% total growth). So yes, it isn't pretty lately, but as with many things economic, there are cycles of growth and stagnation or busts.

I would definitely choose part time work but unfortunately in many fields it is simply not an option.

I hear you on that. It's a shame, as I wish it were an option for me. Probably won't be unless I become a self employed consultant and take the headaches that come with that.

 

[Hamlet]

Something to keep in mind about HH income is that it doesn't adjust for the number of workers in a HH. Women entered the workforce in huge numbers during the time period you're citing.

So many of the HH's have income gains because they have two workers instead of one.

It's pretty much only the top quintile that is doing significantly better in wages/hour than they were 30 years ago.

We're doing fine productivity-wise, it has just become a winner-takes-all economy.

I went straight to the Census historical real household income data (caution: it's an excel spreadsheet) and it does appear the bottom 3 quintiles didn't have a lot of gains in HH income the last 45 years or so (as far as that data went back). Each of those quintiles only saw between 12 and 20% gains in real HH income over the last 45 years. Looking at the top 2 quintiles, they both experienced much better real HH income gains (37% and 70% for 4th and 5th quintiles, respectively). I would surmise many on this board fall in the 4th and 5th quintiles and would have seen significant increases in real HH income over the last 45 years (or in households like theirs if their household hasn't existed that long).

For reference, the 4th quintile had a mean HH income of $80,080 in 2011. Around here, a household consisting of a public school teacher and a police officer or firefighter would just about break into the 4th quintile with zero years experience, and it wouldn't take long before they were solidly in the 4th quintile. Just trying to point out the 4th quintile isn't full of Phd's and MDs or those with amazing technical skills, but "average" people (and I don't mean that in a derogatory way).

So for the welfare class, the working poor or unskilled worker, they may not have seen a lot of household income growth over the last few decades. For the upper quintiles, there certainly has been decent real increases in HH income historically.

And we are currently in a slump in real HH income growth, and haven't seen much the last 10 years (in fact all quintiles but the top one saw declines in real HH income the last 10 years, and the top quintile was under 1% total growth). So yes, it isn't pretty lately, but as with many things economic, there are cycles of growth and stagnation or busts.




I hear you on that. It's a shame, as I wish it were an option for me. Probably won't be unless I become a self employed consultant and take the headaches that come with that.

 

[Nords]

It's pretty much only the top quintile that is doing significantly better in wages/hour than they were 30 years ago.
We're doing fine productivity-wise, it has just become a winner-takes-all economy.

It's almost as if the people who have figured out a way to get rich have somehow also figured out how to keep getting richer...

 

[arebelspy]

From the studies I've seen there is no surplus and real wage growth for the majority of americans has been flat.

That may be somewhat true, but the real cost of goods has dropped, meaning more disposable income and more leisure time, and a great opportunity to ER.

I wrote a guest post for MMM on this topic, with some citations in the footnotes at the bottom:
www.mrmoneymustache.com/2012/07/08/early-retirement-cant-work-or-id-have-heard-of-it-before/

Speaking back to the main topic as a GenY individual, there are certainly some tough obstacles for my generation, but there are also some advantages (house prices and interest rates are super low, for example). As with any generation.

Overall I think that many of the struggles come from attitude, being coddled, and a sense of entitlement. I think there are opportunities for those willing to work hard and make something happen.

Of my friends and graduating class, the ones I see succeeding and the ones not are exactly as I could have predicted when graduating. Sure, there may be a higher percent in the not successful (20% instead of 10%?) were other circumstances different, but overall my hard-working, intelligent peers are getting along, and the complainers aren't. I'd wager, for example, of we examined attendance records that there would be a strong correlation between those who didn't bother to show up many days in high school and those who can't find work now.

It's tough, so be tougher. Many though have been rescued so many times by their parents that they don't know how to persevere or deal with failure and pick themselves up.

I know it sounds callous, and certainly there are exceptions who just have had a run of bad luck. IMO though, hard work is still rewarded.

YMMV.

 

[azphx1972]

Nice guest post on MMM, arebelspy. I certainly don't think it's all doom and gloom for the GenY, but as you said some things are tougher. I wonder if I had been born later and started my career during the past decade, would I have been afforded the same opportunities as a GenX worker? I'm not so sure. I'm a pretty average person, but I was able to obtain an education inexpensively, find my niche in a relatively healthy economy, and achieve the American dream (so far) in terms of material/career success. Every generation has its own struggles, but my perception is that there are fewer opportunities for the average GenY worker. The American dream may not necessarily be out of reach for them, but I feel it probably is more difficult for them to achieve than it has been for me. However, as others have alluded, life isn't fair so there's little choice but to deal with it.

 

[photoguy]

That may be somewhat true, but the real cost of goods has dropped, meaning more disposable income and more leisure time, and a great opportunity to ER.

I wrote a guest post for MMM on this topic, with some citations in the footnotes at the bottom:
Early Retirement Can’t Work, Or I’d Have Heard Of It Before! | Mr. Money Mustache

Very interesting blog post and I certainly don't think saving 40-90% of you income is crazy. My wife and I have actively made choices to make this level of savings possible.

I do agree that perhaps many folks have lifestyle creep making it harder to save money but I don't follow your argument that real wage increases have made it easier to ER. The numbers in your MMM post from the Bureau of Labor statistics ("real compensation per hour rose from 42 to 108 over the second half of the 20th century ") are more or less consistent with Mishel's numbers which is not surprising since they are from the same source.

However, the increase in wage growth is based on an average of all workers and includes the 1%. When you break the numbers down to percentiles (Mishel presents the median, Fuego's census results break it out into quintiles) you can see that the increase in average is driven mainly by the people at the very top (noted by Mishel and ER poster Hamlet). So most households haven't seen any significant wage growth and wages are rising faster than the cost of goods only for those at the top.

The fact that “an average worker needs to work a mere 11 hours per week to produce as much as one working 40 hours per week in 1950” doesn't help the worker if the extra productivity is going to capital owners.

Speaking back to the main topic as a GenY individual, there are certainly some tough obstacles for my generation, but there are also some advantages (house prices and interest rates are super low, for example). As with any generation.

I think some other advantages for GenY individuals are less career discrimination for minorities/women, guaranteed issue healthcare, and an increased variety of career paths / business models (e.g., a writer can self publish their work and bypass traditional publishing houses).

 

[growing_older]

Maybe, but you have to remember that your 1950 worker lived in a smaller place, had no dishwasher, possibly no clothes washer, no color TV, maybe no TV at all, and certainly no vast array of electronic entertainment smart phone game systems and so on. Many families sewed clothes for their kids, had limited wardrobes themselves, cooked almost all meals at home, and traveled a great deal less than we do now. You could live that lifestyle on your 11 hours, but almost no one chooses to do that.

 

[Hamlet]

According to the Bureau of Labor Statistics, the median hourly wage in this country is $16.57.

Someone working 11 hours a week would make about $790/month.

Unless your 1950's worker was living in an efficiency with no children, no car, and ate only rice and beans, I suspect that you're wrong.

Maybe, but you have to remember that your 1950 worker lived in a smaller place, had no dishwasher, possibly no clothes washer, no color TV, maybe no TV at all, and certainly no vast array of electronic entertainment smart phone game systems and so on. Many families sewed clothes for their kids, had limited wardrobes themselves, cooked almost all meals at home, and traveled a great deal less than we do now. You could live that lifestyle on your 11 hours, but almost no one chooses to do that.

 

[growing_older]

My Google search finds U.S. Dept. of Commerce, Bureau of the Census average hourly wage in the 1950's is $1.50 which is a whole lot of inflation calculation to figure out how that compares to $16.57 today. The 11 hour figure was something someone else threw out as the comparable figure, but assuming it's quite a bit higher, the same tendency for people to keep working full time and spend the excess still seems to be the way most people operate. ER and extreme ER people willing to live within limited means are still unusual.

 

[Lazarus]

Something is different. My Dad was a clerk in a drugstore when I was a child. (1960's) He had a house, car and a wife and child he supported on that paycheck. I don't think a Wal Mart or retail worker can do it now on that type of job. It's not just inflation thats at work. I think real income must be down in comparison.

 

[growing_older]

I do think that's another factor. My starting salary as a software engineer was not much more than the techs or admin assistants, but starting software engineer salaries are now several times those other positions and can climb rapidly. Meanwhile the one breadwinner, two parent, 2.5 kid families of my youth are increasingly rare. Those I do know almost always include both parents working.

 

[braumeister]

Just another data point.

My father, a NYC bus driver, made about $5,000 in 1965.
Inflation would make that about $36,500 today, which is well below the current median household income.

We had a reasonably nice one-family house in Brooklyn, and I was attending a Catholic high school with a moderate tuition charge.

So I would attribute the difference to the classic "rising expectations" paradigm.

 

[Lazarus]

Some of it is changing expectations. We had only one car. I walked to neighborhood markets to get the milk and bread. Also milk was delivered to the house for a while. College was not an option or spoke of.

I had a paper route with which I bought my first car at 14. Yes 14 years old. Almost 15. Worked on it till 16 then took my test in it. It didn't last through my teen age driving long. Bought another car from my dad and drove it a few years.

Went in the Air Force at 17 turned 18 in basic.

I left home with a bag and about $250 in the bank.

I now am retired at 55. No college degree.

 

[haha]

My Google search finds U.S. Dept. of Commerce, Bureau of the Census average hourly wage in the 1950's is $1.50 which is a whole lot of inflation calculation to figure out how that compares to $16.57 today.

I strongly doubt that wage.

I made $1.25 /hr cutting grass as a 12 year old in the 50s. As a 17 yo I averaged about $100-$120/week, selling women's shoes at Bakers.

I kind of imagine that some machinist making jet engines in my city made a fair amount more.

Back then young single guys with ordinary jobs could drive Jaguars or Austin Healys or Porsches, easily affford to go to night clubs, live in close-in nice city apartments. Sporting events were affordable for the average Joe. My machinist buddy who drove a Triumph Tr-2 and I went to the Indy 500 2 years running. And they could get married and have children with or without their wives working.

When I first moved to Venice Beach, (late 60s) my neighbor on one side was a milkman with a non-working wife and a big house and 4 children getting ready to leave the nest. This was 3 blocks from the prime central part of Venice Beach. Find me a milk man living in Venice Beach today?

I am not saying that very clever and fully devoted Gen-Yers cannot do fine- they can. My genY son and his wife do quite well, especially him. But I am a fair minded person, and for us it was like falling off a log to get a good job, which is rarely true today.

Ha

 

[jayc]

I work part time in medical IT. They hired four h1-b people in the last 6 months. Just interviewed 3 people. One US guy fifty years old, other two non US. No US young kids with the skill set answers the ad.

We need 3 more people. It is sad all of these so called techie exposed kids do not want to work. We are looking for college grads to train. I mentioned it to 3 kids that just graduated at various Xmas gatherings. Polite head bobbing and their parents showed more interest than they did.

I do not feel sorry at all for their plight or situation.

 

[Lazarus]

They are waiting for a management position.

 

[rescueme]

They are waiting for a management position.

+1

I suspect that your comment has a good chance of being reality, in today's world.

 

[beowulf]

"Overall I think that many of the struggles come from attitude, being coddled, and a sense of entitlement. I think there are opportunities for those willing to work hard and make something happen."

And this is new?? I grew up in the '50s and '60s. The WWII crowd that were our parents said the same thing about us. We said the same thing about our kids who grew up in the '70s and '80s. And now our kids say the same thing about their kids. I'm pretty sure that Henry the VIII said that about his kids and Thomas Jefferson said it about his. It's pretty hard to find a generation that thinks the people of the next generation have it harder than they did. I remember slogging through the snow to the subway and it was so cold the e-coli in my petri dishes froze solid . Them whippersnappers today have it really plush with thosed heated petri dishes.

As to military slogans, I worked in the Pentagon for many years and we had a huge sign on our office wall that said "Think War." That was our business - what else would we think

 

[Hamlet]

Or they prefer their current employment at McDonald's. I've found that a lot of employers who complain about not being able to fill jobs are trying to offer McDonald's level wages for high skill jobs.

They are waiting for a management position.