Gen Y, in addition to being the best educated generation in the history of the U.S., is the most indebted. The total education debt of U.S. residents exceeds that of credit cards, and the lion’s share is held by Millennials. Gen X’ers and Baby Boomers before them did not acquire more than $80,000 in debt until they acquired a house. The implications of this debt are profound:
- Their debt overhang makes getting a mortgage much harder
- First time home buyer purchases, a historic marker of adulthood, remains tepid at best
- More than 30% of them are living with their parents
- While young women may still desire marriage, young men are increasingly cooler to the idea
- Females are getting married later and having children into their 30’s
- A corollary to the above is fewer children and smaller families
The last of Gen Y are sophomores in college now. Most all of this generation is in in the labor force but a significant percentage remain unemployed. Gen Z has solid numbers, but the leading edge of it are college freshmen this year and the jobs the 15 to 18 kids would normally be working in are being taken by late generation baby boomers. At the rate things are going we’ll be darn lucky if Gen Y produces children at a volume a few ticks below replacement rate (anything as scary as Russia’s or Japan’s population death spiral is not in the cards).
Add into this the staggering growth of beneficiaries in the Social Security Disability plan, the wretched labor participation rate, and poor creation of initial work opportunities and it equals a major headache for HR in both the near and long term. We can expect continued disruptions in supply of human capital with the SKA’s employers need. We can also expect a greater push toward technology to alleviate demand and take labor supply variations out the equation to the greatest degree possible.