Tuesday, November 30, 2010

Young adults' recession response

After a dinner party with two couples, also parents of young-twenties children, I re-read an article from the NYT: "Home Economics: What the Great Recession has really done to family life" by Judith Warner, here.

My parents, married in 1931, had little nostalgia for the Depression.
Though they passed their Dirty Thirties lessons on (save for a rainy day, don't buy on credit, help those worse off), they were delighted when Dad was paid in cash again, rather than with chickens and potatoes.

Today, when families say they're closer now that they've replaced ringside seats with board games, I think, Good for them. But
I wonder whether their young adult children will desire their families' scaled-back lives, once they are in the workforce.

Many of my sons' contemporaries have chosen the professions–especially law and engineering–not for love of the field, but for future financial gain. These kids seem to be thinking, If job security is a thing of the past, better get into a highly-paid profession.

I don't see many twenty-somethings aspiring to a reduced lifestyle. They want what they enjoyed growing up in prosperity, whether they spent their summers at the cottage or worked for decent pay at a seasonal job.

To paraphrase Sophie Tucker, they may be thinking, I've been a rich kid and I've been a poor kid; believe me, honey, rich is better.

Many middle-class young adults, raised on easy credit and immediate fulfillment of consumer desires, were value-programmed way before the 2008 recession hit. 


A few are saving turtles in Costa Rica or studying Anglo-Saxon poetry; altruists, artists and intellectuals endure. But among friends' children, I see fewer choosing to follow bliss and more prepping for the LSAT.

This recession, with the pain and loss that Warner describes, will create a cohort determined to get back to where they once belonged, whether it's the local half-pipe or Aspen.


I hope that, as they plot their financial future, they examine their values closely, rather than endorsing those of my maxed-out generation.

Perhaps they can hit the sweet spot many of us missed: a life of prosperity
and responsibility.

23 comments:

frugalscholar said...

Well, of course I love this! I would just like to add: do the youthful LSAT-takers know that "prosperity" can mask indebtedness? In other words, was the prosperity they experienced real?

Susan said...

My husband is a lawyer and so is our older son. Having a professional degree is a guarantee of a certain kind of economic security. As my husband has told me from time to time, "I can always hang out my shingle."

I think for many of us in the boomer generation, our prosperity HAS been real. Of course I live in somewhat of a bubble surrounded by friends who have been responsible with their spending and have not gone overboard. In other words, none of my friends have purchased thousand dollar purses and Rolex watches. We've watched our pennies for the most part.

I see our sons doing the same thing. Our scrappy younger son has managed to meld his idealism with a very decent salary for a twenty something. He works in the solar power industry with an idealistic liberal arts degree. He uses his research skills in a world of technology and scarce resources--so he feels good about what he is doing and aspires to a certain level of prosperity.

Duchesse said...

frugal: That depends on how much debt they incurred and what they can earn. In the case of several of my sons' friends, there will be no debt.

Susan: Glad it's working out for your sons. However, many young people face difficulties. Incomes for young men are dropping; note these US stats:In 1969, only 10 percent of men in their early 30s were classified as low earners (less than the federal poverty rate). By 2004, it was 23 percent, and it has continued to grow.
(Source: http://www.wsws.org/articles/2010/feb2010/yout-f08.shtml).

In other parts of the world, youth unemployment is at record highs, and is expected to remain in the high double digits through next year. (Source: http://www.wsws.org/articles/2010/feb2010/yout-f08.shtml).

Susan said...

Duchesse, Our sons ARE fortunate, but they are also well educated and willing to work very hard. And, they were not afraid to step outside their comfort zones in seeking employment. It is never easy for anyone.

I do think education (and a broad education) is key. You never know what direction a career with take and what you may have to learn on the job.

Our younger son added a language (Mandarin) which helped him get his foot in the door of an industry largely controlled (right now) by the Chinese.

I think thinking creatively is key.

Susan said...

One other point, the first job our younger son took in the solar industry was VERY low pay (I'm sure it was beneath the federal poverty line,) He worked hard at that job, learning all he could and then parlayed his experience into a better job with a different company.

And you are right. It helps immensely to have no debt. We worked very hard ourselves to save and send our sons to college so that they would have no debt. This was our main financial goal in the years we were raising them.

Fuji said...

It's difficult to predict the spending habits and values of a different generation. Perhaps they will initially buy into the consumer dream and subsequently learn material goods don't buy happiness. I think there is great hope and potential with the younger generation - maybe there will be another Bill Gates. Corporate drones and professionals aren't always fiscally orientated.
This is a fantastic article:
http://tinyurl.com/2e2ur2c

LPC said...

I have simply tried to disclose to my kids the structure of financial life as an adult. Let them make their own choices. At this point, one is focused on gainful employment and a future passion, the other on a creative life with earning secondary. We shall see how they proceed. What does anyone really know in their early 20's about what they need to be happy? Research is required.

Duchesse said...

Susan: The point of my post is not that young people are not working hard or thinking creatively. It is that among my sons' cohort, more of them are choosing professions that are highly-paid, and for which there is demand (or they hope so!) rather than work they find interesting, because they have seen the effects of job loss or insecurity up close.

I've seen a very noticeable shift; YMMV.

LPC: Whether they know or not-any more than we did- they still are concerned with making the choice. Job loss and instability have affected the choices of a number of young adults we and our friends know.

Fuji: There will always be brilliant innovators, but when youth unemployment tops 20% in developed countries like France and Spain, the next generation are challenged to gain experience and skills.

Susan said...

Duchesse, In OUR generation, I think many did it the same way---sought careers that would support their families rather tha pursuing their dreams. So, I don't see a big change there. My husband's dream was to be a college professor, but he pursued law instead. I think this kind of attitude is only prudent for many.

Rubiatonta said...

Like a lot of people my age, when I started university in 1979, I chose to major in journalism over English literature, because I thought it would be more practical when it came time to finding a job. By the time I graduated in 1983, I had taken the bare minimum of journalism classes required in order to get a B.S.; the rest were language and literature classes, which were what really made my heart sing.

I've never worked as a journalist. I've been a teacher, a textbook writer and editor, a marketing executive, and now am beginning my career as a life coach. There was no real plan for this career path when I was in my 20s, and yet I look back and see that I was in the right place at the right time, over and over again. The common denominator was a sense of adventure and passion. Nothing practical about it all. And while you couldn't call really call me prosperous, I wouldn't have done it any other way.

I hope the generation coming up now is as lucky as I have been.

Susan said...

I think the issue for some is whether to seek a broad education (for example a Liberal Arts degree) or a more practical degree---an example might be business. For some, the answer to to pursue their interests as an undergraduate (history, literature, art, drama, etc) and then pursue a practical degree (law, MBA, medicine, etc) as a graduate student. Of course doing this is time consuming and expensive and not everyone has the money to do it or the drive and determination to make it happen without a lot of financial support from family.

From my observations, very few people really get to pursue their dream job or interests if they are facing supporting themselves or a family. There is always the option to get the law degree (or something else deemed to give options to earn money) and then pursue your interests.

The bottom line is that life is not easy for anyone and most people have to make their way in the world one way or another.

Not all lawyers are prosperous, but the degree is salable in a variety of ways and does give some security. I applaud today's young people who are trying to be prudent. Do I feel sorry for them? No.

We've had downturns before (think the Great Depression) and many of the young people of that day did what they had to in order to survive. The good news is that this generation is thinking about what might be best.

I didn't grow up in a world where people my age uniformly pursued their interests instead of marketable skills. Perhaps others had a different experience, and, if that is the case--I would enjoy hearing about it.

Toby Wollin said...

Right now, a lot of young graduates are competing with much older people who have been unemployed for quite a while and who basically have exhausted their benefits and have to take whatever is out there. And a lot of what is out there, frankly (for those of us who are, ahem, a certain age) are jobs that when we were young, were the territory of people who if they were lucky, had graduated from high school. Companies are just..not...hiring. And depending on your location, a professional degree and license might not help at all. My son worked temp for a while in a computer recycling operation for what was frankly minimum wage. On one side of him sat a lawyer who had lost his job with a local firm; on the other side, a specialty engineer who'd worked on a military contract that the federal government canceled and he lost his job. My son was able to get a perm job with health benefits as a cleaner -- and he's darned happy to have it.

Duchesse said...

Susan: I have always taken a utilitarian approach to university undergrad education, which upsets my DH no end!

Toby: That scenario is affecting young adults now- not sure how much, but it is similar to the Depression, when my aunt was called home to work in a candy shop because there was no longer money for college. I am glad your boy has that job right now.

Susan said...

Duchesse, I understand that people can be of two minds when it comes to university education. This is the subject of many conversations among our friends. Most of our friends DO take the utilitarian approach to education. When my husband studied history, obtained an MA in history, and only then went to law school (with me supporting him financially), his father was going nuts.

Quite frankly, I think it is his breadth of education which has brought him the most happiness. While he has supported us practicing law, it is his ongoing history research which has brought him joy. This next month he will be presenting a history lecture at Oxford University. So--he is with Le Duc on this point. And I am also.

Of course this sort of education can be seen as a luxury by some. I honestly think it leads to more success monetarily. My husband's brother has an engineering degree and a Stanford MBA, but has not approached my husband in earning ability. I think a broad education gives one a certain facile ability and adaptability. Does this make sense?

s. said...

Several of my friends considered careers in "helping professions" but chose more lucrative fields, stating that this would allow them to support a family and also give generously to those causes they believed in. So, in a way, the "practical" choice was also an idealistic one.

In practise, though, most of these high-earning friends have found it difficult to maintain their enthusiasm for helping others once out of grad school. Their work peers use their solid incomes to buy beautiful cars, rent cottages, go on exotic vacations; replacing their old Toyota or getting the garden landscaped becomes more pressing than supporting women's rights in 3rd world countries.

All very natural, no doubt. Definitely fascinating to watch.

Fuji said...

This is an issue many parents struggle with, however, I find it less of an issue to be practical when I'm paying $50,000/year tuition fees.
Neither of my children have a "passion", and I am dubious many do. If that is the case then it isn't a bad idea to simply study something you are good at.

Susan said...

I hear you loud and clear Fuji. Sometimes it takes a real leap of faith to pay that kind of tuition for an 18 year old---studying anything. As they say, some of the best things in life seem wasted on youth. What many of us would not give, at our ages, for access to that kind of education.

Duchesse said...

Susan: It does not sound like your husband graduated with massive debt from his undergraduate and two postgraduate degrees. Most students today are not so privileged. Some who thought their parents could pay for their education find that can't happen.

If someone decides to spend three or four years (depending on the degree) in a program that does not readily translate to earning a living, fine. But in these times, I would say get the practical skills, a trade or occupationally-oriented degree- not necessarily the professions.

One can read medieval history or semiotics on one's own, before, during and especially after academic life- as I suspect your husband has done. The academy is not the only route to learning and development.

As I said to my son, ready yourself silly in anthropolgy, minor in it, but do not get an anthro BA degree unless you plan to get a PhD.

s. For over 40 years, I have met a great number of people in all levels of corporate life, and many of them joke about their "weird" academic backgrounds: medieval history, philosophy of math, comparative religion. They picked up the business skills later.

The difference now is that the corporate world formerly viewed these degrees as entirely appropriate, and now prefer people with finance, business or law backgrounds, especially if they have co-op experience.


Fuji:
The "study what you;'re good at"- which I call "follow your talent- is a sound strategy.

I know a number of kids who deferred going to university and took temp or construction jobs because they did not want to waste money studying until they thought more carefully about what field they would pursue.

Susan said...

Reading this article in today's NY Times, made me think of this post:

http://www.nytimes.com/2010/12/12/business/12yec.html?hp

Duchesse said...

Susan: Read it over my morning coffee; thought it was slanted toward a rather privileged group: "All these kids going to Wall Street.

Another trend I see here is kids going to (community) college programs to train in skilled trades after they find their BAs are not getting them jobs.

Susan said...

A couple of comments. You are right. My husband did not graduate from law school with a massive debt. It was just a few thousand dollars because I supported both of us when he was in law school and we also saved enough to pay his tuition. Back then (over 30 years ago) tuition was no so high and he went to our state's law school with instate tuition.

Our lawyer son was fortunate that we had budgeted to send him to both undergraduate school and professional (law) school--so he has no debt.

Our younger son has only an undergraduate (history) degree, but is making his way in business--overreaching and overachieving, you might say.

The article I provided the link for may well be slanted, but I found it interesting and somewhat on this topic.

Susan said...

Interesting you should mention community college classes. Our history major son attended technical classes at a community college (several of them, in fact) to learn more about the industry in which he works. He also volunteered with a habitat group to learn about installation so he would be knowledgeable about that. He is neither a technician nor an installer, but wanted to be educated. These sorts of classes were not offered at his liberal arts university.

Duchesse said...

jewelry making: I do not allow posts that link to a commercial site.