Why young people are miserable at work
It is not because they think they are special or entitled
I have heard too many people talk about how 20 and 30 year old people are lazy, self-centered, and feel special and entitled for better jobs and for more pay than they deserve. For the vast majority this is not true. These stereotypes are mischaracterizations of the frustrations younger people feel, made by people from different generations that are from much different economic circumstances.
The ideal job for most people provides sufficient money, job security, and gives them some time when they can enjoy their life and the money they earn from their job (balance). How does that much up with the reality of today’s job market?
No Security
An easy topic is job security or lack there of. Security is gone in the eyes of 20 and 30 year old adults. There really does not even seem to be anything sacred anymore. With rapid changes in technology, entire industries and stable companies can suddenly find themselves in a free fall in the blink of an eye. Look at what happened to traditional and stable companies of RIM (makers of Blackberry, in a free fall), Blockbuster (just closed its last store), or even Borders book stores (gone). Microsoft even finds itself in a pinch these days as Android and Apple are hurting the desktop computer operating system market which was once so profitable for them. Apple and Google even seem to be targeting Microsoft’s Office brand of products.
Even the Government shutdown highlights how unstable things are. People lost what should be a stable job with a stable income for a few weeks. The automatic sequester cuts are also permanently getting rid of some previously “stable jobs” in both the government and areas like defense. Companies with solid revenue and profitability are laying people off. Even union work like teachers find themselves out of work as state and local governments are hurting for money.
Through all this — the people that are most affected, that are the first to be shown the door, especially in areas where seniority matter — are the young people. So throw stability out of the door for young people. All 20- and 30-somethings have to look for in a job is money and balance.
The Balance and Money Tradeoff
For the past 15 years we seem to hear how businesses keep demanding more with less. It seems like if trends continue, far off into the future,we are just going to have only one person running multibillion dollar companies! While I believe that a lot of what we read about this in the news is more hyperbole than fact, there is some truth to it.
I think you can really break this trend up into two different implications — for salaried and non-salaried. When you read about “doing more with less” for hourly employees, it means that they are doing more work in the same 40 hours per week. This is probably due to some great new software or production tool that automated many of their old responsibilities. Therefore, while they are doing “more” work, they are doing that extra work in the same amount of time per week. The implication here is more about how productivity is making fewer jobs available than about how many hours they are working.
For salaried employees the implications are very different. Salaried employees tend to not get overtime and can work as much as they want (or have to). Hence, when you make a salaried employee do the work of 2 people, it may require twice the time! Therefore, the trend of “doing more with less” for salaried employees means that they may end up doing “more” work in more hours per week for no extra pay.
Hence, for those of us in traditional salaried professions like engineering, consulting, law, accounting, etc, the “more with less” trend means that more work is expected out of us, and this work requires more time out of our lives. It means that we all have smart phones where people can contact us at any point of our lives. It means that we have less of a work life balance. A great article discussing this can be found here.
Hence, there is a clear tradeoff between higher paying salaried positions versus our work life balance. Now comes the critical question that is asked — why do some young people keep their “soul sucking”, “dream killing”, “80 hour a week” jobs instead of going out and finding a different job that demands less of them? Why do we force ourselves to be miserable? Do people actually like all the fun perks a higher paying job conveys (fancy restaurants, expensive electronics, etc), but just like to complain? Why don’t these people just find more fulfilling jobs that require less hours with less pay and just give up some of the perks? Why don’t people take a chance and go work at a startup or new position that may be a temporary pay cut, but has the chance to be everything they ever would want in a job?
They can’t.
Debt
This is the area most older generations do not understand about today’s 20- and 30-somethings. The amount of debt many 20- and 30-somethings have through both their education, house, and car loans is simply staggering. Many people joke that they have two mortgages — their home mortgage and their student loan payments.
Many people credit the diamond company of De Beers as having created two of the most effective marketing slogans in history. “A diamond is forever” and “How else could two-months’ salary last forever?” changed the way people viewed buying engagement rings. Before De Beers launched these campaigns, people may have purchased other jewels or not spent as much on their ring. Now as you know, everyone gets an engagement ring with a diamond that cost a significant amount of money.
I think this analogy is very close to what has happened with debt. While these are not necessarily slogans, everyone knows them:
- College is a good investment that everyone should make.
- Education debt is good debt.
- Buy the biggest home you can afford.
College as an Investment
The notion that college is a good investment comes with a big “it depends”. If you want to go into a highly skilled position like engineering, law, consulting, finance,or accounting, you absolutely need a degree. In those scenarios college actually teaches you the fundamentals and theories behind the work, and positions at corporations demand degrees for job applicants. However, there are many jobs and positions that do not need or require college educations.
When looking at it from an investment standpoint, there is a simple equation you need to understand:
Yearly Take Home Pay = Yearly Income — 401K Contributions — Health/Dental Insurance — Taxes
Free Monthly Cash Flow = (Yearly Take Home Pay)/12 — Monthly College Loan Payment
Free Monthly Cash Flow refers to how much money you will have to spend on housing, car payments, going out, etc. Before starting college, figure out what you expect to make when graduating (Yearly Take Home Pay), and then approximate how much money you will have each month after your college loan payments. Compare it to what your Free Monthly Cash Flow would have been if you did not go to college. This number is key to making sure you are comfortable with your decision on taking out a college loan. Why?
Education Debt is the Worst Kind of Debt You Can Have
Period.
Why do some people say “education debt is good debt?” I believe it is because education debt is good debt for banks.” Education debt is easy to get. Why? Because education debt is usually guaranteed by the government. If you miss a payment, the government pays the bank the remainder of your loan. After that occurs, the bank can sell your loan to a debt collection agency. They can double dip.
The problem with education debt is that it is not dischargeable through bankruptcy. If you cannot pay it, it will just keep accruing interest. It will follow you around for the rest of your life. There is no way to escape it. You just need to make sure that you can live with the monthly payment associated with the amount of debt you are taking on. These factors alone are contributing to the rise of young college graduates going back home to live with mom and dad.
Taking a Mortgage
The term mortgage actually comes from a French Law term meaning “death pledge,” meaning that it is only over once you have paid off the loan or the property is taken away. If you look throughout the world, there are many societies that do not value home ownership like the United States. Why is that?
It is because a big house with a big mortgage is only a really good investment if:
- Property prices are rising.
- The housing market is liquid.
Housing has been considered a good investment throughout the childhoods of most 20- and 30-somethings as both 1 and 2 held true for most of it. Hence, most people have been brought up viewing home ownership as a great way to make money and get ahead.
With the property bubble recently bursting, neither 1 or 2 holds true at this time. It means that people are holding homes that may be worth less than they purchased them for, and they cannot even get rid of the house for price they can afford to sell at. The only advantage to a mortgage over an education loan is you can discharge it through bankruptcy.
Tying it all Together
So now you see the problem?
20- and 30-somethings have taken out large college loans and possibly have bought homes. They also have well paying jobs that may require horrible hours by doing work that may not be rewarding. Yet they cannot take a chance to leave or move to a job that pays less because they have all this debt that will follow them around essentially forever.
That new job they dream about may not pay enough to cover their student loan payments and mortgage causing their “Free Monthly Cash Flow” go to so low they cannot afford anything else. They are afraid to take that chance moving to a new employer as if it does not work out, they cannot afford their loans. For some the tradeoff is a “bad” job and being independent, or a “good” job living at home with their parents — a choice without a happy outcome.
It gets worse when you have kids. Your expenses will go up with children (diapers, childcare, food, etc). Now you are working even harder to afford everything, and yet spending less and less time with your family. You probably send your kids to daycare or hire a nanny so your “Free Monthly Cash Flow” takes another hit. It is a horrible cycle — you are spending more time at the job you hate away from the people you love, further locking yourself into that high paying job by increasing your monthly expenses with items like childcare, and doing all this because you love your family and do not want them to suffer financial hardship.
Younger generations desire balance, and yet decisions they made when they were 17 and 18 continue to haunt them until they finally can get their debt paid off to a more manageable level. 20- and 30-somethings are not miserable because they hate their jobs. They are miserable because they are trapped in their jobs.
