finance

• Starting off with some health news... One study recently found that many young people with Type 2 diabetes have impaired cardiovascular function due to stiffened arteries.
• Kurt Metzger's "Talk to Young People about Sex" album will be released on Comedy Central on June 28th
• We need to see more of this: An Iowa City city council candidate is running to give young adults a voice.
• Call it the scone rush? For struggling young people, one cafe in the Chicago area intentionally creates opportunities for recently imprisoned youth to get back on their feet.
• Obama again reaching out to youth through youth roundtables.
• New York's state financial aid agency offers college students advice on how to strengthen their financial fitness following college.
• The San Francisco Chronicle offers its own advice.
• But before you graduate from college, you need to succeed there. Here are some tips for first year students in your first year.
• Entrepreneurship 101: A guide for new college grads looking to fly solo
• Grants that help youth be their own bosses? Interesting.
• The trials and tribulations of the intern and other tales of unpaid labor
• The for-profit price of student loans (and it's not stormtroopers on a collection mission. At least in this story).

The March issue of the Atlantic Monthly has an extensive piece on the impact of the country's joblessness on the Millennial Generation which has been one of the most effected in this country with an unemployment rate nearly twice the national average.

Not surprisingly it paints a pretty bleak picture and will "likely change the life course and character of a generation of young adults."

Nobel Prize winning economist Edmund Phelps argues that the last several years of "prosperity" were a faux financial security based solely on unsustainable industries like home construction and the financial institutions that provided loans for them etc. As a result we are not merely seeing the result of the collapse of those industries we're also seeing the impact of our economic recession on top of that.

Phelps says that even in the event we are able to develop new industry, innovate like crazy, and complete "recovery" we're still in a pickle because the Millennial Generation is so big we'll have so many new people entering the workforce every year it'll be hard to sustain. He rejiggers an unemployment rate near 6.5 to 7.5% as being the "new normal" as we move forward.

"It’s likely, then, that for the next several years or more, the jobs environment will more closely resemble today’s environment than that of 2006 or 2007—or for that matter, the environment to which we were accustomed for a generation."

The piece goes on to examine Millennial unemployment specifically - saying that it is so rampant that the once stigma of joblessness has now evolved into an accepted norm. It even suggests that it happened at the best time for Millennials because the great-recession hit before many of them had mortgages or started families.

There are perks but there is also a debilitating blow-back

"Lisa Kahn, an economist at Yale, has studied the impact of recessions on the lifetime earnings of young workers. In one recent study, she followed the career paths of white men who graduated from college between 1979 and 1989. She found that, all else equal, for every one-percentage-point increase in the national unemployment rate, the starting income of new graduates fell by as much as 7 percent; the unluckiest graduates of the decade, who emerged into the teeth of the 1981–82 recession, made roughly 25 percent less in their first year than graduates who stepped into boom times.

But what’s truly remarkable is the persistence of the earnings gap. Five, 10, 15 years after graduation, after untold promotions and career changes spanning booms and busts, the unlucky graduates never closed the gap. Seventeen years after graduation, those who had entered the workforce during inhospitable times were still earning 10 percent less on average than those who had emerged into a more bountiful climate. When you add up all the earnings losses over the years, Kahn says, it’s as if the lucky graduates had been given a gift of about $100,000, adjusted for inflation, immediately upon graduation—or, alternatively, as if the unlucky ones had been saddled with a debt of the same size."

Its enough to incite a panic attack. The article quotes recent data from the National Association of Colleges and Employers who shows a 21% decline in job offers to college grads last year. The worst part is that it's going down again this year another 7%.

They go on to talk about the new org JobNob who aimed to connect recent college graduates for unpaid internships with new start-up companies in the Bay Area. The first event they had over 300 people attend, many in their mid to late 20's and 30's with tons of experience and multiple degrees from Stanford, Berkeley, and Harvard all desperate for jobs. New college grads couldn't compete.

"When experienced workers holding prestigious degrees are taking unpaid internships, not much is left for newly minted B.A.s. Yet if those same B.A.s don’t find purchase in the job market, they’ll soon have to compete with a fresh class of graduates—ones without white space on their résumé to explain. This is a tough squeeze to escape, and it only gets tighter over time."

This might also be the right time to mention that the average student exiting college is saddled with debt of over $23,000.

If that isn't frightening enough, the mental effects of young people who suffer a prolonged state of unemployment are staggering. The piece quotes the stereotype of youth being so flexible and adaptable to fluctuation in job security. But the reality is far worse.

"Examining national longitudinal data, Mossakowski has found that people who were unemployed for long periods in their teens or early 20s are far more likely to develop a habit of heavy drinking (five or more drinks in one sitting) by the time they approach middle age. They are also more likely to develop depressive symptoms. Prior drinking behavior and psychological history do not explain these problems—they result from unemployment itself. And the problems are not limited to those who never find steady work; they show up quite strongly as well in people who are later working regularly."

Decades after the Great Depression a study was done on men who suffered joblessness in the 1930's. They found these men "came across . . .as "beaten and withdrawn—lacking ambition, direction, confidence in themselves." Further unhealthy habits can develop from youth left in prolonged unemployment. Increased stress and the results from fewer financial resources, they say, can endure for a lifetime. The same could be said for the lack of health care for those left unemployed for long periods of time, and in the event of a tragic condition or accident those youth can be financially enervated into bankruptcy.

"Journalists and academics have thrown various labels at today’s young adults, hoping one might stick—Generation Y, Generation Next, the Net Generation, the Millennials, the Echo Boomers. All of these efforts contain an element of folly; the diversity of character within a generation is always and infinitely larger than the gap between generations. Still, the cultural and economic environment in which each generation is incubated clearly matters. It is no coincidence that the members of Generation X—painted as cynical, apathetic slackers—first emerged into the workforce in the weak job market of the early-to-mid-1980s. Nor is it a coincidence that the early members of Generation Y—labeled as optimistic, rule-following achievers—came of age during the Internet boom of the late 1990s."

Then the good article goes awry when they pull out people like Ron Alsop and Jean Twenge who both claim to be Millennial experts but are so jaded with their own old school philosophy they can't seem to navigate into the future. Twenge refers to youth as "Generation ME" which she bases on social networks being all about YOU. As we've seen the progress of this technology, her uneducated assumptions have been pretty well refuted. Alsop is the one who thinks Millennials are too filled with a sense of entitlement because we were given trophies as children. Despite my debunking of his work, Alsop, has yet to send me my first trophy. These fake experts love to criticize young people for quite simply adapting to the world Boomers have created.

If you indeed read this article rather than me covering it, I urge you to skip over this selection. It consistently brings up points that aren't understood by older generations. Social networks aren't about me they're about "we," its not "entitlement" to expect to be paid a living wage or have flexibility if you're a good employee, and finally this idea that young people turn jobs down because they're not sexy is insane. I have turned jobs down because I couldn't afford to take them unless I worked at Starbucks after work. These people make me furious.

In the end

"...The fact that so many young adults weren’t firmly rooted in the workforce even before the crash is deeply worrying. It means that a very large number of young adults entered the recession already vulnerable to all the ills that joblessness produces over time. It means that for a sizeable proportion of 20- and 30-somethings, the next few years will likely be toxic."

UPDATE: I just got a great email from a friend who said that the most interesting tidbit about the young people it talks about in this article is that regardless of the problems facing them, youth refuse to accept their "lot in life." Rather than entitlement its a sense of hope and optimism that if you don't like what you have you can work within the system to change it. He's right, this is a characteristic that has been tested with focus groups time and time again. Rather than abandon their dreams as their predecessors would have them do, Millennials are poised to instead adapt and evolve in their efforts to shoot for the moon.

Where some of these more negative "generational consultants" see Millennials as inefficient or unable to be managers, decision-makers, or entrepreneurs, my friend points out that it might be because none of them have ever thought it was a tangible goal for them without seeing peers in those roles. This could be primarily because older generations dictate the ways those roles are to function, leaving little room for creativity, innovation, or change.

H/t's: NC & RC

Fun new piece from the SanFan Biz Journal about a survey Microsoft did where they found young people don't trust traditional financial institutions.

I would say... well after the last year who DOES trust them!?

"Two-thirds of the survey respondents said they won’t invest money in the stock market and more than half said they won’t invest in a 401(k) or other retirement plan. Slightly less than half said they’d invest in an insurance policy and 22 percent said they would not even deposit money in a bank."

Of course, its a survey of only 500 people, which is like surveying an intro Psych class, but still its a fun think to think about.

"More than 80 percent said they believe that more financial institutions will fail in the future and 80 percent said that U.S. financial institutions don’t deserve any more bailout money."

Secondly, Ara Trembly of the Insurance Networking Blog used this as footer for his column about why he thinks young people don't trust "us" he says.

He begins the piece by building legitimacy in himself from a story about growing up in the 1960's when young people didn't trust anyone over 30. He gives a good point that to some extent older people have experience and knowledge and should at least be listened to before dismissed, but he also points out that decisions that older people make or opinions they have may not actually be representative of our lives as a whole. Their thoughts or "expert opinions" cannot come close to reflecting the future or the potential future, and as such, despite all of the "experience" old people have we as young people may have more of an understanding about what is best for our future. Amazing! Who'd have thought...

"So what can we old hippie-types learn from our own experience that might help address this generational gap and, perhaps, reduce the size of the span? First, we need to remember that despite all our own youthful angst, the world continued on its course, and many of us found a place in it with which we were satisfied overall. Thus, when we begin to wonder what will become of this rebellious generation, we can point to evidence that it doesn’t necessarily mean we are all doomed. In short, we need to chill out and listen to the valid points being raised by younger workers.

And what can you millennials learn from we, the long-in-the-tooth? Perhaps you can see from our experience that while some things seem vitally important now, they may not mean all that much in the grand scheme of your life. Sure, it’s important that technology be brought to bear on our financial and other industries to increase efficiency and help ensure integrity, but it is equally important to realize that your generation’s needs are not the only ones that the market must meet.

Obviously, those of us who have helped create the world as it now exists haven’t solved many of its major problems. But that doesn’t mean we can’t be trusted. Instead, it means that we all need to find reasons to pull together in the same direction, instead of perpetuating a generational tug-of-war that I suspect has been around since Adam and Eve bore offspring."