Millennial Outlook Tempered Despite Strong U.S. Economy
Millennials are progressing more quickly than they were just a few years ago, but they are still risk averse – delaying home ownership, marriage and new business endeavors – and uncertain about their economic future as they manage high levels of student debt and costs of living.
The results were revealed in a new Ernst & Young survey.
In 2016, the EY and Economic Innovation Group (EIG) surveyfound a general lack of optimism among Millennials. The results painted a complex picture of this generation, marked by low economic confidence and uncertainty about the future.
Two years later, Millennials have made significant strides, graduating from college, finding full-time jobs, buying houses and settling down at higher rates than Millennials at the same age in 2016. But despite these milestones, they continue to fall behind previous generations.
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"Millennials are willing to put in the hard work to advance their careers, and they see themselves as their own best resource to get ahead," said Marna Ricker, EY Americas Vice Chair of Tax Services. "Our poll shows that nearly 60 percent of Millennials have lofty aspirations of starting their own businesses, but often don't have the financial capital to do so. It's time we look forward and focus on nurturing Millennials to become our nation's next generation of business leaders."
"As we near the end of the first full year under the Tax Cuts and Jobs Act (TCJA), EY's survey provides businesses and lawmakers with valuable insight into how Millennials view the U.S. economy and government policies. Across party lines, Millennials remain wary about a tax system that they perceive as unfair, and the TCJA did not change that view," said Cathy Koch, EY Americas Tax Policy Leader. "It will be interesting to see how this perception affects political debate and future policies as Millennials become policymakers in the coming decades."
While Millennials are having children and buying homes, it is at a markedly decreased rate than past generations.
- Today, 40 percent of Millennial women are mothers. When Generation X women were the same age, 57 percent already had children.
- Forty percent of Millennials own their own homes, compared to 26 percent in 2016.
- However, 45 percent of Gen Xers and Baby Boomers were homeowners when they were the same age.
The Great Recession has had a lasting impact on Millennials, significantly altering their outlook on financial security and the future.
- Seventy-five percent of Millennials worry that Social Security will be unavailable when they are ready to retire, and 70 percent worry about not having enough money to live off of when they eventually retire.
- Seventy-one percent of Millennials worry about America's debt and deficit levels.
Deflating the popular narrative, Millennials remain hardworking and career-focused, gravitating toward companies that offer good health insurance and other benefits.
- Eighty-six percent of Millennials believe working hard is extremely or very important to getting ahead in life.
- Nearly 40 percent of Millennials believe that staying with one company is the best way to advance their career.
As a generation racked by student loans, Millennials feel the weight of their debt when deciding whether or not to buy a home or start their own business.
- Eighty percent of Millennials say that student debt has forced them to delay home ownership.
- Thirty-eight percent of Millennials say they do not have the financial means to start their own business – though they would like to – and 16 percent are afraid that their business would not succeed.
Despite being hesitant to start their own companies, Millennials believe that their generation as a whole is more entrepreneurial than the other generations.
- Fifty-eight percent of Millennials have considered starting their own business.
- Seventy-two percent of Millennials believe that startups are essential to the economy.
- Fifty-eight percent of Millennials believe their generation is more entrepreneurial than other generations.
Although Millennials remain wary of the establishment and American institutions, they continue to show strong patriotism and support for America itself.
- Seventy-seven percent of Millennials report that they are proud to be American.
- But, only 30 percent of Millennials report high levels of confidence in American institutions.
- Since 2016, trust in higher education, corporate America, Silicon Valley, organized labor and the criminal justice system has decreased, while trust in media, organized religion, and local government has increased.
Across party lines, Millennials think the burden of the US tax system is not balanced, even after the Tax Cuts and Jobs Act.
- Sixty-four percent of Millennials believe high net-worth individuals and big corporations are not paying their fair share of taxes.
- Fifty percent of Millennials feel they are paying the right amount of taxes.
Research Now conducted a survey on behalf EY of 1,202 20- to 36-year-old US residents nationwide. Of those respondents, 842 were contacted online, and 360 were contacted via cellphone. Survey participants were contacted between June 27 through July 13, 2018.
This article appeared in Insurance News Net.