The Unluckiest Generation…Yet
This is part 2 in a 3-part series on myths about Millennials in the workforce. You can read Part 1 here.
“Millennials will bear these economic scars the rest of their lives, in the form of lower earnings, lower wealth and delayed milestones, such as homeownership.”
— Andrew Van Dam, “The unluckiest generation in U.S. history,” Washington Post
Millennials like myself were dubbed the boomerang generation: graduating into the Not So Great Recession, many of us lived with relatives out of college, and only 30% of us lived in our own traditional nuclear families nationwide as of 2020, according to Pew.
This is your reminder that Jake Gyllenhaal is 40, Drake is rapping about fatherhood and doesn’t seem to grok TikTok, and that Timothée Chalamet, born in late 1995, was considered the most established of the Met Gala chairs.
The Discourse has hyper-focused on a certain rarefied worker: think about the dual-income, childless couple in NYC or San Francisco looking for more yard space for their golden retrievers. (Put a pin in the idea of providing financially for your pets, we’ll get back to that.)
Somewhat contradictory is the idea of the young person who won’t settle down and start adulting—a favored trope of early ‘10s pop culture, this aimless twenty-something lived with a bunch of roommates in a hipster enclave (Brooklyn > Portland > Austin > #vanlife), had no savings, and blew whatever freelance earnings he or she earned on fancy coffee.
Both narratives ignore stark realities in favor of glib critiques, none of which really address the housing crisis that has sped up during the pandemic. Most Millennials aren’t part of a power couple or highly educated urban denizens with cool jobs. This is where we should dig deeper into the data and see what’s on the horizon for young (and young-ish) people. Frankly, the stats are alarming, especially for housing.
According to research done at the Kem Gardner Institute at the University of Utah, the Mountain West region has seen the starkest increases in housing costs. My home state of Utah saw the fourth-highest spike in housing costs in the country between 1991 and 2018.
Let’s use the Utah boomlet as a case study.
Go Home: Utah’s Full
“Home is a notion that only nations of the homeless fully appreciate and only the uprooted comprehend.”
― Wallace Stegner, Angle of Repose
That’s the term that kept popping up in one of my online housing groups, this one for Cedar City (projected population: 38,304, but it probably grew while I typed that sentence). Cedar City, Utah, is a perfectly pleasant college town, with the clash in cultures that can only come from a bunch of union card-carrying thespians descending on a town with an unironic Livestock & Heritage Festival.
“Looking for a silo at least 14 feet in diameter” is a typical example of the classified ads that showed me I wasn’t in the city anymore, Toto.
This headline from The Salt Lake Tribune caught my eye while imposing myself as an extended-stay houseguest in Cedar City with my relations this August:
Southern Utah University asks students to live with relatives
SUU’s Jared Tippets isn’t telling Millennials to get off Cedar City’s lawn, but students my sister’s age. A 20-year-old junior, she worked two jobs all summer—one as a busser at Centro Pizza, another in her field of early childhood development as a daycare employee—and she heeded the university’s advice and lives with our grandmother.
She got the full Gen Z college experience by being ferried out of a plague-stricken Milan, Italy, the last week of February 2020, getting to “study abroad” in our dad’s basement. At that age, I saved $1,000 and could live in a Paris apartment in the seizième straight out of The Aristocats.
The worst thing that happened to my cohort in 2007 was being told to consider putting a Canadian flag decal on our backpacks. And when I returned to Provo, Utah, I rented a crappy room in Stadium Terrace for about $250, max—$99 in the summers. Had President Samuelson told students to consider living at home, I would have thought it was a stunt.
But just like Edgar the Butler’s understandable shock at his employer leaving her accumulated wealth to her cats, the gains in the U.S. economy in the past decade and a half have not trickled down to the median worker, much less the working class.
So much of the media fracas about cost-of-living increases has focused on the type of person who, well, works in the media. Just under 40% of Millennials have a college degree—even Jake G dropped out of Columbia—and 72% of Americans live in their hometowns.
This distortion in perception is what I’ll call the Avocado Toast Paradox: a certain older person, probably in the long tail of the income and wealth distribution, tsk-tsk-ing a certain younger hipster person, probably their own child or grandchild, for having different consumer and lifestyle preferences, all while ignoring the long-suffering butlers and other lower-wage, less-educated Americans who are hit hardest by inflation.
The above-referenced report makes the gap between the have-somes and have-nothings stark:
A household with an income below the median has a one in five chance of a severe housing cost burden, paying at least 50 percent of their income toward housing, while a household with income above the median has a one in 130 chance.
Go West, Young Person—and Pay Through the Nose
"Santa Fe, are you there? Do you swear you won't forget me? If I found you, would you let me come and stay? I ain't getting any younger and before my dying day, I want space not just air. Let 'em laugh in my face I don't care, say the place I'll be there."
- “Santa Fe,” Newsies (1992)
Newsies—a sleeper VHS hit among slumber party goers that put Christian Bale on the mental map of a generation of young women—stars a newspaper delivery boy at the turn of the 20th century who wants to escape the unhealthy slums of New York for the wide open spaces of New Mexico.
The national stories on the rises in housing costs—anecdotally, a huge topic of the virtual water cooler conversation—follow a predictable series of beats at this point. The idea of big city residents like Jack Kelly displacing the “natives” (conveniently enough in the West, usually relatively recent arrivals themselves), forces up housing costs.
But is the “Californians ruined our town blah blah blah” narrative… true?
In a broader sense: not really. It’s a more classic supply/demand problem being driven by people from the greater region.
Obviously, there are a lot of Californians, as it is the most populous state. But if you experiment with the tool on Bloomberg’s CityLab, you can see the actual migration patterns during the pandemic.
It’s clear from these maps that most Utahns are staying in the West—and most Californians stayed in California. A New Yorker is much more likely to move to New Jersey than to cause your rent to skyrocket in Bozeman, Boulder, or Belen, New Mexico.
Yes, San Francisco lost residents as some much-reviled techies took their high-paying software development jobs with them… but so did Salt Lake City.
Let’s use my own family, all middle-income Utah natives or long-time residents, and their migration patterns over the past couple years as a case study.
My father and his wife moved from Salt Lake County to the tract-home hyper-growing town of Lehi (formerly known mostly for being the setting of Footloose), but neither works in tech. My grandmother sold her Sandy house and downsized to Iron County—her ex-FBI brother had moved from California, but almost two decades before. My brother (yes, a techie) actually bought a house in Salt Lake county after renting downtown.
I was priced out of the yuppie suburb of Draper, and am subletting for now one state over, in Colorado (the state with the highest spike in living costs, so I may have played myself).
Housing Crunch: Next Generation
“The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. (It is not) … a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”
— James Truslow Adams, defining the American Dream in Epic of America, 1931.
Once Jack Kelly disembarked at the Santa Fe Depot, he might have been shocked that his slice of the American Dream would come at so dear a price. By 1910, the population of New Mexico had exploded to 195,000, driven by gold, silver, and coal mining. One man’s dream homestead is another man’s established ranchero—and bitter disputes arose between longtime Nuevo Mexicanos and the new arrivals. When it comes to housing squabbles, there is truly nothing new under the sun.
Today’s housing inflation is real, but caused less by hordes of outsiders moving to your state, and more by supply constraints caused by under-building after 2008.
The K-shaped recovery means that while high-income knowledge workers saw their stock portfolios and equity rise over the last 18 months in the U.S., low-income workers are even more precarious in their living situations than they were pre-COVID. According to MarketWatch, home builders have incentives to build more luxury homes, leaving the entry-level and affordable-housing projects even more underserved.
So, if the problem of the housing crunch comes down to under-supply and over-demand more than anything, what does that portend for the youngest future homebuyers?
Well, for one, there are a lot fewer of them.
Since the echo Baby Boom peaked in the very early 1990s, and with declining birth rates in the U.S. ever since, the competition for jobs and apartments may well let up among Gen Z-ers with adequate incomes.
However, they express different housing preferences when surveyed. If the image of the Millennial decamping to the urban cores of Los Angeles, Denver, or Atlanta was something of a stereotype, it was one rooted in a large degree of truth.
Somewhat surprisingly, Gen Z expresses a strong preference—as high as 60%—to live in the suburbs rather than an urban core. And this was before the pandemic took away much of the perks of downtown living.
Gen X and older workers have no love lost for long commutes, Gen Z wants to settle down eventually in a suburban house, and Millennials probably can’t afford the luxury condos being advertised to us on whatever wages you're offering.
So, if you’re a manager making decisions about where to build your office, maybe don’t rush to sign for an office tower in a hip neighborhood.
Next week, we’ll look at the changes in higher education in the past 15 years—and what it means for the newest members of the workforce.
Edited by Rachel Swan