Millennials have split into two generations with different economic outlooks

A recent Business Insider article cited CGK research that suggests a growing economic divide among Millennials. Some entered the job market during the recession and still struggle with student debt. Others were able to successfully started careers and benefited substantially.

At The Center for Generational Kinetics, we’re passionate about uncovering generational trends, truths, changes, and insights. These discoveries help leaders understand and bridge generations as well as unlock their generational strength.

An important trend our research team uncovered led to a feature article on Business Insider! In fact, the article trended on their home page!

Millennials economically split by the Great Recession

Entering the workforce during the Great Recession put older Millennials in a tricky economic position. Workers suffered from wage stagnation, the cost of housing was still expensive in many areas, and student loan debt was frequently hanging over their heads.

Not so for their younger siblings, the second phase of the Millennial generation. They benefited by learning from the financial challenges that older Millennials faced. They also entered the workforce when salaries finally began to trend upward (albeit slowly) and the economy began its recovery.

A key part of the generation that is now behind in wealth accumulation

Statistically, many older Millennials delayed traditional markers of adulthood: marriage, kids, and buying homes. While these markers may have changed for the generation—a topic for a different post—these same markers have been tracked for a long time. In addition, economic instability also prevented many Millennials from confidently saving and planning for their financial futures. A 2018 report by the Federal Reserve Bank of St. Louis called these older Millennials the “lost generation” for wealth accumulation.

Older Millennials have now been in the workforce for 15 to 20 years. The economic stranglehold is finally loosening, but making up for lost time will be difficult.

Another way to look at it: Older Millennials have to play catch-up with their finances if they ever want to retire. Some have already decided they may not ever be able to afford to retire.

Younger Millennials have more options and play it safer

On the other end of the spectrum are younger Millennials. They entered a workforce with more opportunities and better salaries than older Millennials. They also are now entering their wealth-accumulation years with more options to avoid the economic potholes of their older Millennial peers.

Younger Millennials are more aware of the dangers of economic instability. They often appear have better money management skills and spending habits because many of them have learned from the part of the generation ahead of them. They’re also more likely to save for emergencies and retirement—a trend that has really accelerated with Gen Z. At the same time, younger Millennials have more years ahead to accumulate wealth than their older generational peers.

How your organization can adapt to the Millennial split

At CGK, we’re watching Millennials closely to see how this generational divide impacts businesses, employment, sales, and growth.  Would you like to learn more about preparing your organization for Millennials and Gen Z as both employees and consumers? Contact us here. We’ll set up a phone call to see how we can be a resource to you. We offer customized keynote presentations, generational research, and more. We are passionate about unlocking the potential of every generation!