Article: American Dream Fades for Generation Y Professionals

[ElecEngineer]

I have to say I finally found a thread that I wanted to respond bad enough to create an account. I've been a lurker around here for a couple of years now.

GenY person here. I think that it is somewhat more difficult for my generation to get ahead but I think it is the doing of most of my peers parents. They don't have a clear understanding that the labor market has changed and the days of "just go get a job" are over. Well at least in the sense of traditional good jobs. However, the majority of it comes from my generation living a life of being coddled and thinking that certain jobs are menial and below them.

I'm 25 and DW and I now have an income that would put us in the top 5% of filers. Very blessed and thankful for what we have but my road of hard work started MUCH earlier than nearly all my peers. I specifically remember being driven around the last week that I was 15, walking in every fast food/retail place in town trying to find a job. I eventually ended up in a fast food position and worked it through high school. My dad "bought" me a car and taught me about credit as I had to make payments to purchase it from him, pay the insurance, gas, and my portion of the cell phone bill. At $5.50/hr this left very little blow money for me. This was a very different lifestyle than all of my friends in high school experienced as most parents purchased them cars and only about 10% of my class had PT jobs. I never got to go to "the party" because I always had to work weekends. I remember a classmate telling me to "just quit, he's not going to take your car away." I explained to him that he would take it apart piece by piece and sell it for scrap before he would let me drive one mile without paying him for it. Just a different way of being raised I suppose.

It was also made very clear to me from a young age that college was not something that would be paid for by my parents and I was expected to pay my own way. (Neither of my parents graduated HS but dad joined the military and eventually opened up a successful small business). I worked my tail off taking every free ACT/SAT test prep class my school offered and applying for every 3rd party scholarship I could find. I eventually received a full tuition scholarship to a state school but I still had to work 24-32 hrs a week to pay room/board. I didn't have an oppurtunity to "find myself" as the scholarship was only for 8 semesters so I chose a reasonable major.

I ended up getting married in college at 21 and I had another person that I was responsible for. DW helped by working and I sold plasma for extra cash. Two people living together can always live cheaper than separately. I graduated college very near the bottom of the recession and I was thankful to earn a job upon graduation. It wasn't the job of my dreams but I had a family to support. It actually taught me very important skills that allowed me to springboard into my much more lucrative career now. We always seem to end up where we NEED to be rather than where we WANT to be.

Most of my highschool and college classmates that graduated in the recession and had never had a boss in their lives. They did/do not know how to conduct themselves in an interview or in an environment with professionals. They are still looked at as a child instead of a grown adult, because nothing in their lives has made them into adults yet. I type all this out to say that the American dream is NOT dead, but I think it takes a little more work to make it. I would say that of my classmates on 20% are in careers. The others may be working but mom/dad are still supporting them in some way.
Sorry for the long post.

 

[ziggy29]

My view is biased from my experience. I believe you don't prepare for a specific profession - you need to prepare skills that can transfer to any profession.

In principle I agree, and historically this has been good enough. But these days employers expect increasingly unrealistic combinations of education and experience.

Once upon a time, if you had a college degree -- any degree -- it opened a lot of doors even in somewhat unrelated fields, the theory being that you were reasonably bright, determined and trainable. These days half the college degrees are considered "worthless" by employers. And having a degree in a particular field isn't good enough even if it's the right field. You also have to have either an advanced degree or very *specific* experience in a few areas.

Just demonstrating the aptitude to be a good employee when properly trained isn't good enough. Employers are increasingly getting out of the OJT business -- partially because they are so understaffed and employees overworked already that there is no slack for training -- and thus merely having a demonstrated ability to learn new things or having skills that can "transfer" to others with a little training isn't good enough for most employers.

 

[JoeWras]

I have to say I finally found a thread that I wanted to respond bad enough to create an account. I've been a lurker around here for a couple of years now.

I'm 25 and DW and I now have an income that would put us in the top 5% of filers. Very blessed and thankful for what we have but my road of hard work started MUCH earlier than nearly all my peers. I specifically remember being driven around the last week that I was 15, walking in every fast food/retail place in town trying to find a job. I eventually ended up in a fast food position and worked it through high school. My dad "bought" me a car and taught me about credit as I had to make payments to purchase it from him, pay the insurance, gas, and my portion of the cell phone bill. At $5.50/hr this left very little blow money for me. This was a very different lifestyle than all of my friends in high school experienced as most parents purchased them cars and only about 10% of my class had PT jobs. I never got to go to "the party" because I always had to work weekends.

ElecEngineer. Welcome, welcome! Hope you participate more.

Your parents did well. I'm 25 yrs ahead of you, but was fortunate enough to be in high school during some terrible economic times (late 70s/early 80s -- a lot of broken firecalc scenarios happen there). Yes, fortunate. It built some character. Fast food? Nope. Moms were going back to work and she took those. It was hard to get a job. I was extremely, extremely fortunate to meet a small businessman near where I lived and he gave me a 4 hours a week job emptying office trash. (Cigarette inside days, I hated the ash in the trash!) Car? Nope. But at least my 4 hours at $2.25 got me some bus fares. Friends? For whatever reason, we were all in the same boat. Had a rich friend (father was lawyer), but his dad didn't give him no stinkin' car.

From this we learned a bit about the value of working. Your parents gave you the same gift. I'm glad you are appreciating it.

Now, about that school thing. What I'm seeing is for engineers, employers now want Masters degrees. This is kind of becoming ridiculous. ElecEngineer, did you run into that? Do you feel held back by not having the MS? Or did you get the MS?

 

[Sarah in SC]

Most of my highschool and college classmates that graduated in the recession and had never had a boss in their lives. They did/do not know how to conduct themselves in an interview or in an environment with professionals. They are still looked at as a child instead of a grown adult, because nothing in their lives has made them into adults yet. I type all this out to say that the American dream is NOT dead, but I think it takes a little more work to make it. I would say that of my classmates on 20% are in careers. The others may be working but mom/dad are still supporting them in some way.
Sorry for the long post.

You are to be congratulated for escaping the fate you described above.
Sadly, as a Gen Xer with lots of friends your age, your assessment of the Gen Y cohort is spot-on.

I was just explaining to one today that the reason his parents still try to dictate his actions and still treat him like a child at 24 is because he still lives at home and works for his dad!

 

[BLS53]

There's more adult children living at home, than I ever recall in my lifetime. I don't think it's as much the result of the present economy, as it is changes in philosophies of parenting, and the modern education system.

I wonder if some of these "kids" are going to be able to pull this off for decades, and then get a big inheritance to live on when the parents pass on. That's the only way I see this lifestyle perpetuating itself. For most of them, that scenario will not pan out. They'll end up 60 years old, and still be complaining how unfair life is.

 

[foxfirev5]

I'm not sure whether it's a harder road these days. Granted, the get an education/job/career days are over. For many they never existed in the first place. I won't bore you with my childhood, but it suffice to say I was not coddled in any way.
A little panic of graduating from college with my pregnant wife in attendance turned me into a full fledged hustler and go getter. For the first thirty years of my career I was the guy who would go where no one else would and do what they wouldn't. Meanwhile I saved and invested like mad and now I'm in a good place. FI and ready to RE at some point.
Rather than look at the demographics we should concentrate on our own opportunities

 

[mak palen]

When I was young, rarely did you have to wait 30-40 minutes for a dining table on a Wednesday night. But now, all these very expensive restaurants are full almost every night. And not just downtown, also in the close-in popular neighborhoods. 2/3 or more of the free-spending customers are in their 30s.

i saw this in atlanta suburbs last weekend. the late 30s folks are not only affluent but many had their children at the restaurants too. one wonders if it is possible that they are saving any money cause it seems they spend whatever they have coming in .. just like i did when i was their age.

 

[JoeWras]

i saw this in atlanta suburbs last weekend. the late 30s folks are not only affluent but many had their children at the restaurants too. one wonders if it is possible that they are saving any money cause it seems they spend whatever they have coming in .. just like i did when i was their age.

I don't know. My BIL (boomer) won't step in a restaurant if there are any entrees under $20. His daughter (gen-y) won't step into a restaurant if there are any entrees over $20. She didn't keep daddy's habit.

What I *do* notice as a habit of Y's and millennials, is the $5 a cup coffee habit (or $4 energy drink).

My dad (greatest generation) is beyond perplexed and asks "where's their thermoses?" I've never seen him buy a cup of coffee to go, EVER.

 

[WestLake]

Ha. My Daddy would say "do you know why your sister and her husband will always be broke? Because if they want a Coke, they stop and buy one!"

 

[GatherYeAcorns]

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.

You didn't need a college degree in those days to have a decent life. A high school diploma/GED was all you needed. Try retiring 30 years from now (if you're in your 20s today) without a college degree if you work @ a regular 9-5er job. It ain't going to happen unless you win the power ball lottery or invent the next can't live without product.

 

[JoshTrent]

You didn't need a college degree in those days to have a decent life. A high school diploma/GED was all you needed. Try retiring 30 years from now (if you're in your 20s today) without a college degree if you work @ a regular 9-5er job. It ain't going to happen unless you win the power ball lottery or invent the next can't live without product.

I beg to differ.. I didn't invent a must have product, I don't play the lottery, I didn't graduate from college - the past few years my pay has been in the six figures. We save 25%+ a year

Not only will ER happen for us, but it will be a fairly nice ER.

 

[Sarah in SC]

I agree, I didn't go to college until very late, just finished my 4 year degree at 40, and DH has an AA he got at 35. We didn't invent anything but work hard and save and live modestly. The middle class is still alive and well, thanks.

 

[studbucket]

With an income of 30 to 40K, a 100+K student loan could be a rocky start for early retirement.

Being 27 and part of the generation in this conversation, I've never understood how going to a private school and racking up $100k in debt is worth it, especially if you're getting a history or teaching degree.

Let's ignore the Community College -> State School route (which is cheapest) and just look at a state university. Let's say a student needs loans their first year to get off the ground and never gets scholarships during the whole 4 years. That means they are in the whole $10-$20k after 1 year of room, board, and courses. However, after year 1, there's no reason to stay in the dorms, which is what racks up all that debt.

If they paid $15k/year their freshman year, cutting back to living in an apartment now means they are paying 50% of that and then paying for an apartment.

If the average college kid can get an apartment for $650/mo and live on $900/month, then they can pay all those bills by working 20 hours/week for $15/hr ($1200/mo before taxes). Now, they're only racking up $7500 in debt for the next 3 years. Add that to their $15k and that's a much lower $37.5k for 4 years.

However, as a guy who graduated 4 years ago, there's 2 problems with this:
1) Many of my peers were unwilling to work during college (blew my mind)
2) Many of my peers took >4 years to graduate because they a) Had no clue what they wanted to do, or b) screwed around and lost a few semesters

Many folks in the world seem to think #1 and 2 are OK, which blows my mind. Why should you not work? And why would one spend thousands of dollars while you took gen-eds and figured out what you wanted to do?

This doesn't even get into the fact that a large number of my peers seemingly thought that the piece of paper they got at the end was their ticket to the workplace, and didn't put in the effort during their university years to work on relevant jobs, internships, or projects.

My 3 brothers and 1 brother-in-law are all examples of what I've written about above. Ages 20, 22, 24, and 24, they're all playing the victim in various ways instead of owning up to the fact they are in control of their future and planning appropriately for it.

 

[ziggy29]

Being 27 and part of the generation in this conversation, I've never understood how going to a private school and racking up $100k in debt is worth it, especially if you're getting a history or teaching degree.

I think it depends on what you want to do with it. If you are getting a "terminal" bachelor's degree (i.e. no intention for graduate studies or professional school), I think a "cheap" degree from a state school can be as good as a more expensive one. Yeah, a few snobbish employers go for the prestige of the name, but in reality, at the "top" schools the undergrads are often taught by adjunct faculty and grad students. The "top" faculty is either teaching graduate students or busy with research.

Now if you have aspirations to the top of the academic ladder, or you are looking to enter certain professional schools (law, medicine, et cetera), then again the "snob appeal" of the more prestigious schools can help in the admissions process. But it's not really because it's a better education at the undergraduate level, IMO.

 

[JoeWras]

There are some pretty good and reasonable state schools that employers seek graduates from.

College isn't for everyone. I church friend of mine manages crews that install and repair telecommunications lines. Most of these guys just have a simple tech degree, 2 years or less. My friend was explaining that they are all making 6 figures, some near 150k from overtime. Incredible. These are young people too, most under 35 years old.

I still think telecommunications tech is a good profession to pursue. There are tons of old lines needing maintenance. People are always swapping out cable and dsl and whatever.

The only danger here is wireless. Spectrum is an issue right now, limiting really widespread adoption. But I can see a day where it might be everything wireless and all lines and cables go away. If you want TV, or internet, or whatever, the most you might do is get a box at the office and come home and turn it on. Eventually, every device (including the one implanted in your head) will just "work" wirelessly. But that's still a long way off.

Heck, AT&T is still keeping wax and paper insulated phone cables patched together in most cities. This won't go away overnight.

 

[ronocnikral]

I think it depends on what you want to do with it. If you are getting a "terminal" bachelor's degree (i.e. no intention for graduate studies or professional school), I think a "cheap" degree from a state school can be as good as a more expensive one. Yeah, a few snobbish employers go for the prestige of the name, but in reality, at the "top" schools the undergrads are often taught by adjunct faculty and grad students. The "top" faculty is either teaching graduate students or busy with research.

Now if you have aspirations to the top of the academic ladder, or you are looking to enter certain professional schools (law, medicine, et cetera), then again the "snob appeal" of the more prestigious schools can help in the admissions process. But it's not really because it's a better education at the undergraduate level, IMO.

If you're on the tech side, a "cheap" degree can do you wonders. While I was out of state for my VERY specific engineering degree, my buddy was instate and paid close to $2500-$3000/semester for tuition/fees. While I don't fully understand what the hell he is doing, he is working on a PhD with MIT and Harvard's medical school, of course his tuition and what not is taken care of.

I've been working for 8 years now, and I make close to $200k/yr. It's not because I am super smart. I attribute it mainly to luck. But, I also stuck with something I knew I would enjoy when everyone else thought my industry was tanking. So, for 4 years I listened to people tell me I wouldn't have a job 10 years after graduation - perhaps they are correct and in 2 years we will know. But, the oil industry has grown more than I, and probably anyone else, could have ever imagined.

And I'm always looking for my contingency plan for when my gravy train goes away. Working for cash as a handy man scrounging up work at home depot is on the radar screen, and so is the patent bar.

At the end of the day, people in gen y need to realize that they won't get paid "six figs" for an english degree. It's more of the entitlements that drives my generation to be spoiled brats. They need to realize it takes time to acquire nice things. And everyone makes tradeoffs for the things they have today. In essence, you can't have it all.

And I am unicorn.

 

[GatherYeAcorns]

I beg to differ.. I didn't invent a must have product, I don't play the lottery, I didn't graduate from college - the past few years my pay has been in the six figures. We save 25%+ a year

Not only will ER happen for us, but it will be a fairly nice ER.

How old are you, if you don't mind me asking? If you were raised in the 1950s and 60s, yeah, you could have saved for retirement and still take advantage of the ubiquitous pensions that were still out there with a high school diploma for example. Anyone born in the 1980s and 1990s and are in their 20s and 30s now won't ever get to retire early or as easy as those born before 1960 without a college degree. Try getting a job (I.e. non-plumbing) today that pays $50k plus without a degree. The cost of living, stagnant wages, pending inflation, and lack of jobs will doom these Millennials and Internet gen without a degree. Not everyone wants to be a plumber making 200k. Besides, that would be a bubble if everyone wanted to be a plumber. Look at nursing, the minimum is pretty much a 4 year degree and those graduates are having a hard time getting a job.

 

[Texas Proud]

I beg to differ.. I didn't invent a must have product, I don't play the lottery, I didn't graduate from college - the past few years my pay has been in the six figures. We save 25%+ a year

Not only will ER happen for us, but it will be a fairly nice ER.

I agree, I didn't go to college until very late, just finished my 4 year degree at 40, and DH has an AA he got at 35. We didn't invent anything but work hard and save and live modestly. The middle class is still alive and well, thanks.

I think the problem is that you are already established.... not someone just starting out today...

Last night they had a clip on the news where a McDonalds was looking for regular workers... and it said they wanted people with a college degree!!! Not for mgmt. positions, but regular workers...

I know kids in high school who cannot find a job in a store or fast food place because the jobs are taken by older folks... at the Fuddruckers that is across the street from where I work, they have a good number of seniors working.... we are talking late 60s...

So I think that how you got to where you are might not be available to the kids today...

BTW, I do have a BIL who makes a LOT more than I do (in the 170s) and does not have a college degree... he is in the oil field with some specialty... he is in his mid 30s now... but he got help along the way from a relative.... but once he got his skill, he was on his way...

 

[aaronc879]

If the average college kid can get an apartment for $650/mo and live on $900/month, then they can pay all those bills by working 20 hours/week for $15/hr ($1200/mo before taxes). Now, they're only racking up $7500 in debt for the next 3 years. Add that to their $15k and that's a much lower $37.5k for 4 years.

However, as a guy who graduated 4 years ago, there's 2 problems with this:
1) Many of my peers were unwilling to work during college (blew my mind)
2) Many of my peers took >4 years to graduate because they a) Had no clue what they wanted to do, or b) screwed around and lost a few semesters

Many folks in the world seem to think #1 and 2 are OK, which blows my mind. Why should you not work? And why would one spend thousands of dollars while you took gen-eds and figured out what you wanted to do?

This doesn't even get into the fact that a large number of my peers seemingly thought that the piece of paper they got at the end was their ticket to the workplace, and didn't put in the effort during their university years to work on relevant jobs, internships, or projects.

My 3 brothers and 1 brother-in-law are all examples of what I've written about above. Ages 20, 22, 24, and 24, they're all playing the victim in various ways instead of owning up to the fact they are in control of their future and planning appropriately for it.

I have a couple of problems with what you said. First, a college kid isn't likely to get a part time job paying $15/hr. More like $8-10/hr- if they can find a job. I've been looking for a job for 18 months in the $10-12/hr range or higher with no luck and I have over a decade of work experience. So the college kid would have to work pretty much fulltime to make the money your saying is needed. Some of the really smart people might be able to pull off fulltime work and a full college course schedule at the same time but many can't. I worked very hard to get a C+ average in highschool and barely made it into college. I didn't work in college and I still had to drop out due to poor grades. If I tried working 30+ hours/wk I would've actually failed many/most classes. Not everyone is able to do what you're suggesting.

 

[GatherYeAcorns]

I agree, I didn't go to college until very late, just finished my 4 year degree at 40, and DH has an AA he got at 35. We didn't invent anything but work hard and save and live modestly. The middle class is still alive and well, thanks.

I'm in the same boat as you guys as a fellow Xer, but your saying somebody today doesn't need a college degree to makes a decent wage and still save for retirement? Wow...Maybe I should work @ Starbucks instead in California(Bay Area) and still retire in my mid 60s?

As an Xer, I'm going to pull my skeptical card from my sleeve. I have a degree , technical diplomas and make okay money (Bay Area standards) , but I'm only thinking about retiring early because of my mega corp pension(s). Otherwise, I'm thinking retirement in my late 70s.

 

[JoeWras]

Not everyone wants to be a plumber making 200k. Besides, that would be a bubble if everyone wanted to be a plumber.

Most plumbers make nowhere near 200k.

It's good money, but you only reach that stratosphere if you own your own business and are very successful, or work max OT in a union position with frequent double-time hours. Hard to do either.

Also depends on the area of the country. In the south, non-unionized, it will be less. You will probably also want to get a 2 yr degree from community college. In union areas, you'll have an apprenticeship which takes a good degree of time.

Look for yourself from a Chicago area union. If you do the math, the journeyman (after apprenticeship) is somewhere in the $80ks, IF they get full hours. No vacation. At least the contractors pay pension and medical. But you have to work to at least 60 to get a decent pension.
Chicago Journeymen Plumbers Union: 2012 Chicago Wage Pkg.

 

[samclem]

I know kids in high school who cannot find a job in a store or fast food place because the jobs are taken by older folks... at the Fuddruckers that is across the street from where I work, they have a good number of seniors working.... we are talking late 60s...

My guess is that MDs and Fuddruckers aren't hiring older people because they want old people. They are hiring these particular workers because they come to work on time, they do their jobs, they are polite to the customers, they don't get on the cell phone and talk with their friends out back, they don't call in sick when they aren't really sick, when their "regular" tasks are done they grab a broom or stock the shelves. In short, they are good workers. Many employers have found that older folks are, in general, more likely to be "good workers" than younger folks. That means a young person who is a "good worker" has to go the extra mile to get hired. On the flip side, when he does get a job he's well positioned to do well and get ahead: he's able to do tougher work than a 65 YO, and he/she stands out so far from his peers that he'll probably get a shot at greater responsibility.

 

[REWahoo]

They also hire 'older workers' because they are available during school hours and date nights...

 

[Sarah in SC]

I'm in the same boat as you guys as a fellow Xer, but your saying somebody today doesn't need a college degree to makes a decent wage and still save for retirement? Wow...Maybe I should work @ Starbucks instead in California(Bay Area) and still retire in my mid 60s?

As an Xer, I'm going to pull my skeptical card from my sleeve. I have a degree , technical diplomas and make okay money (Bay Area standards) , but I'm only thinking about retiring early because of my mega corp pension(s). Otherwise, I'm thinking retirement in my late 70s.

Um, pssst...low cost of living around these parts might just play a role?

And those mysterious things you mentioned earlier? Pensions? Never heard of them and I don't personally know anyone, my parents included, who qualified for one large enough to get to choose the crunchy kind of cat food. You must be pretty special to be getting that pension, for sure. I'm going to retire by my wits and luck, thanks, and not from a pension or diploma.

You live in a different world, man.

 

[JoeWras]

Um, pssst...low cost of living around these parts might just play a role?

And those mysterious things you mentioned earlier? Pensions? Never heard of them and I don't personally know anyone, my parents included, who qualified for one large enough to get to choose the crunchy kind of cat food. You must be pretty special to be getting that pension, for sure. I'm going to retire by my wits and luck, thanks, and not from a pension or diploma.

You live in a different world, man.

There are Xers that have good pensions. But it is getting rare.

There are a lot of Xers who started with pension promises, but saw the plans reduced, converted or eliminated.

My original megacorp converted, so I fall into the "do my own pension" camp. I only had a few years, so it didn't matter. I'm actually kind of glad about that too.

And speaking of Xers... At age 50, I suffer a generation-identification crisis. Half of the world wants to call me an Xer. Half a boomer. I feel generation-less.