The Millennial Generation, "Keep Calm and Carry On" (Part 6 of 7)

September 4, 2014 | By Neil Howe

This editorial originally appeared in Forbes.

This is part six of a seven-part series examining the rising (or falling) living standards of successive U.S. generations. Read part one here.

The Millennial Generation (born 1982-2004) today comprises roughly 100 million people mostly in their teens and 20s. You may be tired of hearing about them. Their attitudes and behaviors have been scrutinized from every angle, with labels ranging from “The Me Me Me Generation” to “Generation Nice.” When it comes to the economy, however, this generation’s story is straightforward: The oldest Millennials began graduating from high school in 2000, from college in 2004, and with masters’ degrees in 2006. The Great Recession has thus totally dominated their view of the economy in general and their career aspirations in particular.

The first Millennials were born in the early 1980s. They have no memory of the Consciousness Revolution that was so defining for coming-of-age Boomers nor the hands-off parenting era in which Gen-X children were raised. By the time Millennials came onto the scene, social and family experimentation was ebbing. Young children began to receive more structure and protection. With “family values” ascendant, Boomer (and later Xer) parents began spending much more time with their kids than their own parents ever spent with them. Child abuse and child safety became hot topics as rates of divorce, abortion, and violence against children fell steadily. In the early 1980s, “Baby on Board” signs began to appear, attached to new child-friendly minivans loaded with safety gadgets.

Meanwhile, the media spotlight honed in on Millennials’ academic achievement. The “Goals 2000” movement—targeting first-wave Millennials born in 1982—demanded improved student achievement from the high school Class of 2000. Educators spoke of raising standards and No Child Left Behind. By the mid-1990s, politicians were defining adult issues (from tax cuts to internet access) in terms of their effects on kids and teens.

Given all this adult attention, it’s no wonder that this rising generation has developed a sense of specialness, to them­selves, to their parents, and to the wider community.  As we might expect, this location in histo­ry has had a major impact on Millennials’ collective personality and generational behavior.

Many media reports about Millennials’ economic prospects have focused exclusively on how the Great Recession is likely to reduce their average earnings for many years to come, no matter how much the economy improves. This is probably correct. It’s also true that the majority of Millennials looking for work have as yet been unable to find secure and salaried careers—leading to lives that are literally on hold. A rising share of young adults age 30 and under are putting off marriages, births, home purchases, car purchases, and relocation. Interestingly, this age group shows by far the biggest jump between 2008 to 2014—from 25 to 49 percent—in the share of Americans who consider themselves “lower” or “lower-middle” class.

Real Median Family Income by Cohort: Millennial Generation

Real Median Family Income by Cohort: Millennial Generation

Yet there’s more to the story. Along the way, the tough economy is also reinforcing generational traits that Millennials possessed even before the recession began.

Millennials were risk-averse before—and now even more so. Since Millennials began entering their teen years in the mid-1990s, rates of personal risk-taking among this age bracket have plummeted. Serious violent crime among teens, as well as rates of teen pregnancy and abortion, has fallen swiftly and dramatically. Teen drinking and smoking rates have also plunged to historic lows.

Contrary to stereotype, most Millennials try to avoid economic risks as well. Most aspire to a stable career within a big corporation—and, remarkably, a higher share of them think job security is “extremely important” than either Xers or Boomers. Once on the job, they want to max out on benefits from pensions to insurance. According to DC funds data, they have the most conservative portfolio selection of any age bracket under age 65. And economists Lisa Dettling and Joanne Hsu find that Millennials are actually less likely to have credit-card, auto, or housing debt than Gen Xers were at the same age.

Millennials were close to their families before—and now even more so. A full 24 percent of 25- to 34-year-olds now live with their parents, up from only 11 percent back in 1980. It’s not just joblessness. By all accounts (for instance, this AARP study), these first-wave Millennials get along very well with their Boomer parents and collaborate effectively on a wide range of daily tasks.

Millennials were achievement-oriented before—and that too continues. Unable to get jobs, record numbers are working to get degrees. Today, the share of 25- to 29-year-olds with 4-year college degrees (at 33 percent) and high-school diplomas (at 90 percent) are both at record highs. Also at record highs is college loan indebtedness, which passed $1 trillion in 2011. For a growing share of Millennials, the college mortgage is replacing the home mortgage.

Finally, Millennials were collectively optimistic before the recession—and, remark­ably, remain optimistic still. Surveys confirm that, as roughed up by the economy as they are, today’s Millennials lead other generations in expressing confidence in America’s future. In fact, a majority of Millennials think they will be better off than their parents—even if their par­ents disagree. And in an era when Americans of all ages generally don’t trust public leaders, Millennials are most likely to trust the federal government to “do what is right.”

Back in the 1970s, the reverse was true. Young Boomers were far more pessimistic about America’s future than their parents were. Perhaps the only adequate parallel for the optimism of today’s Millennials is the G.I. Generation during the Great Depression, who famously “accentuated the positive” even at the bleakest of times.

This attitude may grow even stronger among late-wave Millennials. In a recent study of late-wave Millennials, MTV summed up their mentality with the old World War II adage “keep calm and carry on.” This group has come of age during the downturn and is adapting somewhat of an Xer “survivalist” mentality to prepare for life in the brave new economy.