Gen Xers Get Hit with Double Whammy
March 12, 2009 | By Eve Tahmincioglu
Life was sweet for Gen Xer Marc Matsumoto when he graduated from University of California, Davis, in 2000 and was inundated with job offers from tech firms.
“It was ridiculous. I would get 30 calls a day from recruiters,” he recalls.
He chose a six-figure job with a software firm, but ended up unemployed after only six months as the dot-com boom went bust.
Despite the disappointment, he was able to borrow money from his parents to pay the bills and went on to see his career flourish, relocating to New York City from San Francisco for a big job with a Web startup.
“It was great,” he says.
At least it was until economic deja vu hit in December. “I lost my job again,” he says -- this time due to the deep recession sweeping across the economy.
Matsumoto, 31, and other members of Generation X — born roughly between 1961 and 1981 — have been hit by an economic double whammy. While much has been made of the plight of older Baby Boomers, in less than a decade many Gen Xers have taken a hard spill off the Internet wave and now have been knocked down again by an ugly recession, one of the worst on record.
“It was a rude awakening,” says Brendan Courtney, senior vice president of The Mergis Group, a division of recruiting and staffing firm Spherion Corp.
“They found themselves from one day feeling they were immortal and entitled to all these dollars in (the) late 1990s to 2001. Then went from that to the unemployment line.” And less than 10 years later, he adds, they’re here yet again.
It definitely was a rude awakening for Matsumoto.
In 2000, he felt on top of the world when he took a job as an information architect for a software company called Bridgestream in San Francisco. He was offered $130,000 a year and a $10,000 signing bonus, he says. “I bought a BMW, had a huge apartment and was going out for dinner every night in San Francisco, and I didn’t save a penny,” he says.
His world came crashing down when the firm he worked for was unable to secure funding, and he was suddenly out of work.
“I didn’t have enough money to pay my next month’s rent,” he says. “I had to ask my parents, who are very frugal people, for money. That was really bad.”
Despite getting caught up in the dot-com bust, Matsumoto was able to dust himself off and go on to hold a series of good jobs in the tech industry, including a stint at Netflix, the video rental company. He then relocated to New York City for a job as chief marketing manager for a startup called Thrive.com in 2007.
Unfortunately, the company ran out of money, couldn’t get funding, and he got laid off late last year.
For the youngest members of Generation X, those aged 25-34, the jobless rate has jumped to 8.7 percent from 4.9 percent a year ago, according to the Bureau of Labor Statistics. That puts them right in the middle, as younger workers have an even higher jobless rate, while older workers stand a slightly better chance of having a job.
You don’t have to tell Michael Durwin, 39, about the crummy job market, which he also experienced firsthand earlier this decade.
Durwin, who lives in Boston, was working as a Web designer for a telecommunication firm and lost his job in the dot-com boom bust. In November he was laid off again, this time from his job as creative director. He has yet to find a new job.
“Gen Xers are really taking the brunt,” he says, noting that many workers in his parents’ generation could count on a career capped with a pension.
“A pension? What’s that?” he asks. “We didn’t get the pensions or perks the Baby Boomers did.”
Making matters worse for Gen X is they are too old to move back in with their parents, and they’re decades away from retirement. Also, says Ilkay Can, director of acquisition at Charles Schwab, they may be “buying a home for the first time, getting married and combining finances, having your first child, paying down your school debt. Many of them don't know if Social Security will be around when they retire.”
Indeed, Durwin just bought a new condo, and he and his wife just had their first child. Before he lost his job he had begun gutting a room in his home, chewing through a lot of their savings.
“I was due for raise and review this past summer, but the boss kept putting it off,” he says.
While things may seem dismal for Gen Xers, this tech-savvy group may be in a good position to bounce back and reinvent themselves, compared with older and younger workers.
This generation never had any illusions that an employer would take care of them for life, says Neil Howe, economist, demographer and co-author of Generations: The History of America’s Future, 1584 to 2069.
“Generation X never expected any security,” he says, adding that the mentality of the company man or woman was dead by the time these individuals entered the workforce.
They are also a resilient lot, he adds. “From the time they were kids they were taught to raise themselves. They were the latchkey kids with the new realism of Judy Blume,” he said, referring to the author of children’s books that tackled issues such as divorce and teen sexuality.
In contrast to the younger Generation Y group with their overprotective parents and Baby Boomers still pining the loss of the gold watch days, Gen Xers never “trusted that the world or anyone was going to take care of them," he says.
Durwin is determined to take control of his career.
After he was laid off in the early 2000s, he took freelance jobs and was able to put himself through art school. “I was then able to market myself as an overall designer with experience in interactive and I got a job at a local ad agency and was promoted to art director,” he explains.
Durwin left that position in 2005 to go out on his own, but then decided to take a staff position yet again, this time as creative director for a marketing company.
On election night, he says, his boss asked him to go out for a drink. “He told me things are tough and he’d have to lay people off, including me,” he recalls.
Now Durwin says he “trying to reinvent myself again to do different positions. While I’m looking for agency jobs, I’m also looking at in house marketing or contract consulting.”
Matsumoto, who is also out of work, feels he was smarter this time around, having saved enough money to cushion him for two years if need be.
“I’m looking for a job, but I’m also contemplating a career switch,” he says.
He writes a food blog called norecipes.com and is thinking about becoming a food writer.
“I don’t think things have gone badly in my career because the experience was worth it, and financially I’m not doing horribly,” he says. But, he adds, “If I were living out of a cardboard box I might be whistling a different tune.”