Annabel Adams has seen a lot in her life: 9-11, the dot-com bust, the housing collapse, the financial crisis, the Great Recession.
That may sound like a lifetime of experience, but she is just 28 years old.
If your birth year is essentially a genetic lottery, which drops you into the economic circumstances of the day, then it's no exaggeration to say that the 70 million millennials - or Generation Y, those born in the 1980s and '90s - appear to have lost that lottery.
"We grew up believing that we would have all the things our parents had: With a college education we'd get a dream job, health insurance, a 401(k), a home," said Adams, a Long Beach, California, resident and public relations manager for a healthy-eating firm. "Now nothing is sure anymore."
As a result, Adams has shelved a lot of those expectations. She lives at home with her mom, does not have a 401(k), and is coping with $20,000 in student loans. While she enjoys carving out a niche as a health writer, the prospect of becoming a homeowner seems distant.
Much has been made of the millennials as an entitled generation, constantly whining about the obligations of adulthood while fiddling with their iPhones. But life has been tough for many of them.
Student debt has now surpassed $1 trillion, with the average college grad who took out loans saddled with more than $25,000 in debt. Americans aged 20 to 24 now face 13.2 percent unemployment, up from 7.7 percent five years ago, according to the Bureau of Labor Statistics.
Back in 1984, households headed by Americans 65 and older used to have ten times the wealth of those 35 and under; by 2009, according to Pew Research, that spread had multiplied to 47 times.
"We've now had five years of a very difficult economy, and young adults have been hit hardest of all," said Paul Taylor, executive VP of the Pew Research Center, which did a comprehensive study of the troubles Gen Y is facing. "It's having a major ripple effect in how they're living their lives. All the classic milestones of adulthood - getting married, having kids, settling down and buying a home - are happening much later."
Still, the millennials are not the first generation to come of age in hard times. For example, the recession of the early 1980s was deep and powerful as well. In 1980 inflation rose to 13.5 percent, and by 1982, the interest rate on 30-year mortgages was 15.5 and the housing market had stalled. Yet the baby boomers who were 20-somethings then seem to have found their financial footing.
While millennials surely have some tough sledding ahead of them, the difficulties are not insurmountable - and could even work to their advantage.
"I hold a contrarian view on Gen Y-ers and how the recession is affecting their career prospects," said Amy Hirsh Robinson, who advises Fortune 500 corporations on generational issues as a principal with Interchange Group in Los Angeles. "There are stronger social and generational forces at play than the recession, and the fact that large companies are trying to recruit top talent from this generation proves my point."
Indeed, the National Association of Colleges and Employers found that Gen Y job prospects might be finally starting to turn around, with companies looking to hire 10 percent more grads than last year.
"We're not lost," affirms Matt Grager, a 25-year-old communications associate with the San Francisco nonprofit Give2Asia. "It's just that the system we were raised in - study, go to college, get a job, work for 40 years - is no longer relevant. Instead, thanks to things like social media and crowd funding, it's up to us to find our own way to success. When you think of it that way, the opportunities are endless."
Of course, not everyone is entrepreneurial, and not every entrepreneur is going to found Facebook. And if the formative years of your career are hobbled by a dreadful economy, it could create a financial echo lasting for years to come.
For a glimpse of what could await today's grads, consider the research of Yale School of Management economist Lisa Kahn. She looked at the earnings of those who had the bad luck of entering the work force during the powerful recession of the early 1980s. Her findings: The long-term salary damage is very real, and can sometimes echo for 15 years or even more.
That is the reality of where we are. But it does not determine where millennials will go from here. Here are a few silver linings to the economic clouds that have gathered over Generation Y:
- Hard financial lessons have been learned early. Members of Gen Y have absorbed key financial precepts very early in life - the importance of living within one's budget, of not getting overextended on loans, of refusing to recklessly speculate with one's savings. Indeed, according to a survey by online bank PerkStreet, most financial experts believe Gen Y is better-prepared than the slightly older Gen X to face an uncertain financial future.
- Expectations have been revised. If the traditional American dream featured a suburban McMansion and a ski getaway, younger Americans are realizing that such lofty expectations are unrealistic. More young adults are choosing to live with their parents well past graduation, for instance - a move that used to be a major social stigma, but is now just seen as financially savvy. Millennials remain optimistic about their financial futures - almost nine in 10, says Pew Research - despite the significant hurdles they have already encountered.
- Historic collapses are also when fortunes are made. Would you rather start your investing career during a market boom or bust? A study by Baltimore-based fund shop T. Rowe Price found that the answer is a no-brainer: "Those who began systematically investing in equities in past severe bear markets were significantly better off 30 years later, than investors who began in bull markets."
- It's not over yet. Yes, millennials have had to launch their working lives in uniquely volatile times. But the past is no determinant of the future, and there are many chapters yet to be written. "We know the beginning of the story," said Pew Research's Taylor. "But we don't know the end of this story yet. The full life path of Generation Y has yet to unfold."
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