Millennials Seek Government Jobs

My 15-year old son recently informed me he is considering becoming a diplomat. He is right on trend. When times are tough, the government may be the job of first, rather than last, resort.

Last year, every single branch of the U.S. armed forces from Marines to National Guard hit or exceeded its recruiting goals. Now Yahoo reports that the hottest recruiting sessions at MBA schools are those sponsored by the government (MBA's: Uncle Sam Wants You , 2.18.09).

Career services directors predict that government and nonprofit hiring will increase this year, though it's too early to say by how much. According to recently released data from the Career Services Council, 35% of schools reported an increase in recruiting activity for government and 12% reported an increase in the nonprofit sector, even as overall recruiting activity was level or down at 75% of schools.

The Federal job site, USAjobs.gov lists 39,500 jobs. A search for 'marketing chicago' yielded nearly 468 results, many of which pay $67K or more. While government and non-profit jobs may lack glamour or high salaries, they offer two things of value to Millennials: steady employment and the opportunity to make a difference. The yearning to make a difference in their job, not just volunteer work is a theme we hear repeatedly in our focus groups with young working Millennials. In an ideal world they would forgo the money for the chance to make an impact. Here's a sample exchange from a group last summer:

Moderator: What is your IDEAL career?

Mike G: I want to be a Fireman, but I can't benchpress enough.

Mary A: I would want a career where i made a real difference in someones life. Working for non profit maybe The barrier for me is experience in that area and a degree in non profit.

Mike G: Kidding.

Katie H: haha mike.. eventually i want to go non-profit but I want to get good business experience now to make the most of that job.

Mike G: The truth is almost just as silly. I work professionally as an actor, but it's very difficult to devote myself full-time to it because I've got to eat and pay rent. In an ideal world, I'd perform and not have to worry about money.

Moderator: Do you all think a nonprofit is the best way to make a difference? or can you see yourself making a difference in the world through a corporation?

Katie H: i don't think its the only way but its the way I want to do it

John C: The barrier to obtaining it is the need for a large income to provide for a family.

Katie H: there are many corporations that do a lot to make a difference.

Mike G: The last company I worked for went down to New Orleans to help with the Katrina clean-up effort.I know people really enjoyed that.

Katie H: the company i work for now does a lot with Habitat Moderator Carolyn: do you see a trade off between making a difference in the world and making a lot of money?

John C: Yes. Plenty of non-for-profits that would be fun to work for that make a difference but you can't earn the same there.

Mary A: I lead the company in a fund raiser for a battered women's shelter, something small but makes a difference.

Mike G: In fairness, taking time out to do some good -- while great -- is a lot different than being in a career where each and every day you're supporting a cause or a purpose you believe in.

Justin D: Making a ton of money should not go hand in hand with making a difference, most of the time.

With the choice increasingly between a job that makes a difference and no job, it's not a surprise that Millennials may be turning their attention to what they perceive as 'worthy' pursuits.

Gen Y: The End of the Home Ownership Dream?

What a great time for first-time home buyers, right? They have the good fortune to buy at what may be close to the market low (we hope) without having to sell at that same low point. Well, as usual with Gen Y, it's not that simple. While the average age of first time home buyers is 26, realtors shouldn't expect waves of Millennials to be knocking on their doors. While the under 30 set may enjoy high incomes and high hopes for future earnings, both their attitudes about homeownership and the reality of high debt are certain to impact their likelihood rushing in to snap up real estate deals.

First is attitudes. Millennials do not aspire to the homes many grew up in. They see a big backyard and lots of square footage as a maintenance nightmare. Smaller living spaces and open space floor plans are likely to be their preferred way of life, for environmental as well as lifestyle reasons. The NewsObserver recently interviewed several Gen Y members on their dreams of homeownership. Here's what they said about the desirability of living in a big house:

Stephen: No. I want a smaller space so it's easier to take off and go. A house that's low-maintenance is good. Generation Y traveled a lot in college and will continue to do so through life. So a big yard isn't a plus, either.

Ryan: No. I think that seeing so many of our generation's parents divorce makes us understand that family togetherness is important. So as we start having kids you will see us avoid homes with a living room, family room and finished basement rec room in favor of open-plan homes where the family can share space.

Carrie: Definitely not. The huge space thing as a status symbol is gone. Well-used efficient space is best. I want a house that reflects who I am and where I've been. In big houses, people buy meaningless stuff just to fill them up. Living in a cookie-cutter subdivision with vinyl siding and no trees is not palatable to me.

Second is finances. Even if they aspire to home ownership, it's harder now to amass the necessary down payment of $30,000 or more. It's been widely reported that the average college debt is $20,000. Many struggle to pay it back, while making ends meet. Many still accept support from parents. Higher income Millennials in our focus groups, those with MBA's and good paying jobs, tell us of staggering college debt loads -- $60,000 or even $80,000. While these civic- and community-minded young adults are motivated to dontate to their college and other causes they believe in, they sheepishly admit it just isn't possible right now.

Add inexperience in budgeting and planning, credit card debt and the uncertainty of the job market, and the picture becomes even more grim. Consider these statistics from MSN (Why Gen Y is Broke):

The median credit-card debt of low- and middle-income people aged 18 to 34 is $8,200

People between the ages of 25 and 34 make up 22.7% of all U.S. bankruptcies (but just 14% of the population at large).

While the facts are sobering, Millennials are cautiously optimistic rather than dismayed. They have the long view, and are confident in their skills and abilities. As one young potential home buyer shared with me, 'With so much for sale, we can afford to be picky right now and get a really great deal.'

Millennials' Biggest Issue and What It Means

What is the most important national issue for Millennials? Harvard Institute of Politics posed this open-ended question in its 15th annual poll among 2,400 18-24 year olds in September/October 2007 and again in 2008. (Thank you! John Della Volpe at Social Sphere for sending this!) The answer (see chart) is the state of the economy (53%). The economy trumps the war (9%) and healthcare (5%) by a wide margin. This is not a surprise, given that the poll was conducting during the financial crisis and two economy-focused presidential debates. The surprise is how different things looked a year ago, when the war was the top issue and the economy was mentioned by only 5%. Admittedly, my priorities have shifted a bit as well, so this is not solely a Millennial phenomenon. But it's interesting to explore how this new awareness is affecting Gen Y, beyond the presidential election. In this regard, nothing has really changed: according to the poll, 18-24 year olds choices are pretty pretty much the same as they were before crisis.

I have firsthand evidence they are thinking about the crisis. I asked a young man I met in the Dallas airport last week who attends Farragut HS in St. Petersburg whether they were discussing the crisis in his economics class. He replied with a grin, "It's ALL we talk about."

My daughter who is a college freshman reports her friends are concerned about their parents ability to pay tuition and that scholarships and loan availability will be affected by the new economic reality.

On the job front, business schools are reporting an uptick in enrollment. According to a report, Grads Fear Gloomy Job Prospects, by Medill at Northwestern, there is additional pressure on students college career centers . (Check out the great video of students across the country talking about their job prospects). We are about to conduct a series of focus groups among recent alumni on behalf of Notre Dame's Alumni Services; I expect to hear there is extra pressure on young employees to perform, making the already stressful transition from college to work even more taxing.

Here are some other predictions:

High school students will begin to defer going to college in favor of jobs or to wait until older siblings have graduated. Applications may be down this year for the first time in many years, despite the demographic bulge for the class of 2013. Others who normally would go for a 4-year school will opt for community college.

We will see parents become even more important to young graduates. Already 50% of men and 33% of women 18-29 live with their parents. Look for this to increase, with no increase in raised eyebrows.

We may even be relieved from hearing more whining about Millennials' unrealistic workplace expectations over the next few years.

Finally, Millennials' civic mindedness may also combine with necessity to drive more to public service. Many may prefer underemployment that helps 'make a difference' to unemployment. The Harvard Institute poll I referenced earlier confirms other studies in this regard, and goes on to specifically outline what they might do to serve:

"Three-in-five (59%) of America’s youngest citizens (18-24 year olds) say that they are personally interested in engaging in some form of public service to help the country -- 19 percent very interested....In addition, the subgroups that seem most intense in their interest to engage in national service are African Americans (25% very interested) and Hispanics (24% very interested). Among the 59 percent who say that they are interested, following are the ways in which they would consider engaging: • 75 percent, part time in their community • 47 percent, work for the federal, state or local government • 32 percent, use the Internet to collaborate with government • 32 percent, get involved in a political campaign • 25 percent, join the foreign service • 23 percent, join national service program full-time like Teach for America or City Year • 17 percent join the military, and • 17 percent run for political office.

Those are some impressive figures. If Millennials follow through, there could be a silver lining to the crisis after all.

Millennials: The Wealthiest Americans?

I am losing patience with the pronouncements that this is the first generation that expects to be downwardly mobile. The reality is that 18-24 year olds are among the wealthiest people in America. Just don't tell them that, they won't believe it.

According to the Bureau of Labor Statistics, 87.4.3% of 18-24 year old males had wages and salary in 2005. In 2006, households headed by persons 18-24 had earnings before taxes of nearly $29,057, up from just $20,120 in 2003 and up 7.5% 2005-2006 alone. For comparison, U.S. income grew just 1.1% in the same period. What makes these figures even more astonishing is that 18-24 year olds by and large do not have families to support. 43% of 18-24 year olds are college students (National Center for Education Statistics). Less than 10% of 18-24 year old males are married. 50% of 18-24 year men live with their parents, 33% of women live with the parents.

If you think starting salaries are down, you'd be wrong. According to Businessweek (5.19.08), the expected starting salaries of new MBA's exceeds $85K, up steadily every year but one since 2002. Starting salaries offered to undergrad business administration majors increased 7.5% 2006 to 2007. So why the angst? Why do most 18-24 year olds consider themselves poor now and their prospects even poorer?

My personal theory is that Millennials have a different idea of what constitutes a 'necessity' and what constitutes a 'luxury'. My college students consider themselves 'poor', yet nearly all sport ipods with thousands of songs, the latest laptops, expensive footwear, cell phones with $100+ plans. The data bears this out. According to the BLS, 18-24 year olds spend a disproportionate amount of money on virtually every category of spending other than food and housing (see table). Within these categories,they have luxury tastes. For example, Millennials are almost twice as likely as older consumers to purchase imported beers and almost three times as likely to pick up a craft beer.

Marketers are on to this insight, even if the Millennials themselves are not. 18-24 year olds represent a vast market for 'luxury' goods --- we just don't call them luxuries.