Younger adults preparing to enter today’s workforce face a confluence of economic challenges unknown to many of their predecessors. These include rising student loan debt, barriers and higher thresholds to entry-level jobs, reduced wages and benefits, and heavier responsibilities for funding their own retirements and those of preceding generations.
Consider these trends and developments:
Student Loan Debt
- During the past 25 years, tuition has outpaced inflation and loans have supplanted grants as the main form of financial aid.
- More students are borrowing larger amounts of money to pay for college, and they are facing repayment periods up to 30 years.
Entering the Workforce
- Older workers who are financially unprepared for retirement are staying in, or returning to, the labor market, which in turn makes it difficult for younger workers to obtain entry-level jobs.
- Younger workers face flattening paychecks and self-funding of retirement
- Once secure paths to upward mobility appear less so, and decent paying jobs secured by union contracts have diminished.
- Student internship practices favor the privileged, especially those who can afford to work without pay for an entire summer.
The Spectre of Generational Conflict
- A smaller number of younger workers will be paying taxes into a system supporting ever-growing numbers of retirees.
- A generation burdened by a less-favorable job market and student loan repayments may be pressured to pay for the Social Security, retirement, and medical needs of the Boomer generation.
Many of these concerns were in play before the recession, but the economic meltdown has intensified all of them. Although the exact mix of these factors remains speculative, potentially we face a long period of generational strife that will play out in our workplaces, boardrooms, and legislatures.
To avoid what appears to be an inevitable clash, we need to embrace both opportunity and support for younger generations and a path to a dignified retirement for older individuals. Doing so will require our best minds and most inclusive instincts.
This post is drawn from a short (3 pp.), newly published essay, David Yamada, “The Looming 21st Century Generation Gap: Economic Challenges Facing Younger Workers,” in the Winter 2010 issue of Perspectives on Work.