Welcome to the New Normal, Generation Y: Get Used to It

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Welcome to the New Normal, Generation Y: Get Used to ItHello, Generation Y! I've got good news and bad news for you. The good news is ...

Warren Buffett was right. We dodged the bullet (for now), and avoided a repeat of the Great Recession. The American economy is growing again, albeit at a speed far slower than we'd like -- somewhere between 1% and 3% a year.

Now the bad news: Unemployment in America today stands at around 9%. Unfortunately, that number can still go up because our population is growing at roughly 1% per year. This means we need to add about 125,000 new jobs every month just to hold unemployment steady. To actually reduce unemployment, we need to add at least 200,000 jobs monthly.

We're not doing that. In fact, last month we added less than half that. But even if we were, it would take eight years of 200,000-a-month jobs growth to return the U.S. to historically "normal" levels of unemployment. Simply put, that's not going to happen. Not anytime soon.

It Could Be Worse

The numbers look bad. You're right to feel discouraged. But things aren't always as bad as they seem, and it might help to add a little perspective here.

Unemployment today is nowhere near as bad as it was back at the peak of the Great Depression, to which our current crisis is often compared. Believe it or not, there was a time in America when one out of four Americans couldn't find a job.
We're not there yet. We're not even where we were at as recently as during the bad old days of the first Reagan administration:



That's not to say things can't get worse. And it's not to say things aren't tough already.

According to the Bureau of Labor and Statistics, some 15% of Americans aged 18 to 24 are out of work today. A lot of you are struggling, and wondering how you're going to make a living here in the New Normal. Fortunately, I've survived a couple of recessions already, and I've learned a thing or two from them. So pull up a chair and let Grandpappy Gen-X give you a few words of advice on how to make it through this.

A Job Is a Job -- Even If It's Not Your Dream Job

According to a recent report in The Wall Street Journal, the most popular places to work in America today are Google (GOOG), Apple (AAPL), Facebook, the State Department and Walt Disney (DIS). Rounding out the top 10, we find young workers also sending resumes to Amazon.com (AMZN), Microsoft (MSFT), and Sony (SNE), as well as the FBI and CIA.

Great organizations all. But it's time for a reality check. Some of you will land these dream jobs right out of college. I didn't, and many more of you won't. Not every high school graduate can go to Harvard; not everyone can work for Google.

At some point, you're going to need to adjust your expectations in the interests of putting food on the table. To give just one recent example, down in Georgia and Alabama there are jobs for the asking, replacing immigrants in the tomato fields. The work's hard. The pay's lousy. It's not something you want to do forever -- but it's a job.

Farm work -- and similar low-wage, low-prestige jobs in groundskeeping, janitorial, food service and retail -- are just steps on an economic ladder. They pay enough to keep a body alive, and they can't be outsourced to China. There's something to be said for that in an economy like today's.

Living on a low-wage salary, however, does require sacrifices.

Needs vs. Wants vs. Luxuries

Difficult as it may be to imagine, there was a time in America when not everybody had a smartphone, or cable TV, a McMansion, or even their own car. These may all seem "normal" to you, but your parents didn't grow up with these things. In fact, they had to work 20 or 30 years to acquire them, and to outfit the homes into which you were born.

When I was growing up, we had a saying around the Smith household: "Use it up, wear it out. Make it do or do without." Times are tough, but tough times pass. The trick is to survive until the economy turns around -- and this means sacrifice.

  • It means buying a patch for your jeans when you wear a hole in the knee, rather than shopping for a whole new outfit.
  • It means buying a $10 Mr. Coffee coffeemaker for the kitchen today, to avoid spending $10 at Starbucks every day of the week.
  • It means clipping coupons, shopping on sale, and buying generic.
  • Until things get better out there, you're going to want to live with what you've got, or do without it until you can afford something better.

To me, growing up in the recessionary 1970s, this all comes almost instinctively. But if you were born in the go-go 1990s, it may require some adjustment.

Lastly, a word about saving for the future. Let me just remind you that recessions eventually end. Once they do, the stock market tends to go up. Sure, the Dow Jones Industrial Average has been stuck in neutral for most of this year. But when we eventually get through this -- and we will -- any money you've been able to tuck away after providing for the bare needs of surviving the economy, if invested in the stock market, is going to pay off handsomely.

Have you lived through a recession (or three)? What advice would you give Generation Y, and its successors, if you could get their headphones out of theirs ear long enough to catch their attention? Tell us below.

Motley Fool contributor Rich Smith owns shares of Google, but he's never worked there. The Motley Fool owns shares of Google, Apple, and Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft, Apple, Google, Amazon.com, and Walt Disney, as well as creating bull call spread positions in Microsoft and Apple.




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19 Comments

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John

I hate to break it to the genius who wrote this article, but the BLS unemployment figure is far from accurate. The unemployment rate is way higher than 9%. The "official" unemployment rate doesn't count discouraged workers who have given up looking for work. Is someone with a college degree who needs a real job but works barely 8 hours a week at WalMart fully employed? Hell no. The publicized unemployment rate also doesn't count people who work part-time jobs but want full-time jobs. Lastly, the BLS only counts people who are collecting unemployment benefits from Uncle Sam. All the other millions of unemployed people who don't qualify for benefits aren't counted. Prior to 1994, the unemployment rate used to include discouraged workers. The soft unemployment rate is published to mask the severity of unemployment in America. If the real unemployment rate were plastered all over the mainstream media, people would freak the f*ck out and start rioting and ugly privileged heads would roll from Wall Street to K Street. It would be revolution time and the elite doesn't want that. In some places, unemployment is much more epidemic. Much of California has been ravaged by severe unemployment and foreclosure. In Detroit, it has been estimated that only 50% of working age men and women have jobs. The real unemployment rate in America is closer to 24-30%. When will Americans stop lying to themselves? When will we admit this is a long term economic downturn and not a cyclical "recession"?

http://www.wnd.com/2012/01/real-unemployment-rate-22-4/

Young college grads today have it worse than ever before. Every new graduating class breaks a new student debt record. Student loan debt is the most toxic type of debt that can't be expunged even through bankruptcy. Student loan debt is destroying the future of the youth before they even begin their adult lives. There are no jobs, yet 90%+ of regular Americans are dependent on our screwed system. Back during the Great Depression, much more people lived on farms and knew how to grow their own food, make their own clothes and take care of themselves. Not anymore. We NEED Walmart, Nike and Macys to clothe us and McDonald's to feed us in 2012. That is exactly what these behemoth global corporations having been working towards for 30+ years. But with no jobs and government assistance among the general population at an all-time high, we are setting America up for a horrible economic collapse of the magnitude never seen in the entirety of the history of mankind. It's not going to pretty, folks. So stop sugar-coating real information dammit!

January 23 2012 at 2:03 AM Report abuse rate up rate down Reply
sandyaw

Yep! Loved the article! I was one of those who grew up in a family whose motto was, "If you do not have it, do without it". We were not allowed to borrow ANYTHING! One day, my sister borrowed a friend's shoes for a class play, and did not tell my parents. When my mother saw the shoes on her feet during the play, she kindly went back stage during intermission and made her take them off, thereby forcing her to finish the play with NO SHOES! To this date, my sister still steams at what my mom did. We, on the other hand, laugh, but remember that good lesson. To this day, I will not borrow ANYTHING, but just do without!

That lesson proved useful because in '06, I was downsized from a very large corporation, along with thousands of other people. While I was devastated, I managed to do OK because I remember what my dear-departed parents taught us.

December 02 2011 at 1:45 PM Report abuse +1 rate up rate down Reply
kernershort

It's all well and good to be frugal and avoid frivolous and unnecessary spending, but it looks like Generation Y will have a very hard time no matter what they do. I don't hink it's their fault.
The corporate "elite" in this country figured out some time ago that the best way for them to make their billions is to move the means of production to China and Mexico and then bring millions of illegal aliens into the country for cheap labor. Both policies, aided and abetted by our wonderful government, have the effect of breaking the back of American labor. Average working people have been trying to make up for the economic squeeze by husband and wife working and borrowing against their home equity. But that can only go so far. We are now seeing the results of 40 years of wrongheaded policies. But I'm happy for the corporate barons who have been making hundreds of millions in salary, bonus and stock option profits.

December 02 2011 at 11:51 AM Report abuse -1 rate up rate down Reply
1 reply to kernershort's comment
rini1946

I hate it when we blame the coporations yes they moved thier business to china. Why because we go to the store and say hey this thing is cheaper than the one made here I will buy that. Now if you were a coporation would you make things here so they can sit in the warehouse and you go bankrupt or would you move you manufactuing out of the country? Two the people moving into the country Did you go and vote this year or any year In a presdential year a little over 50 % of the people vote off years it down to less than 40%. the reason this is important is the people that vote example(not bashing)the gays have a strong turnout and a strong politcal team. In New York they got 6 republicans to vote for the gay marriage. Also the latino have a strong group and look at the talk about making the one that are here leagal. (not bashing again) but just pointing out we need to get off are butts and Buy items made in the USA and go vote. Quit trying to put the blame on any one else Like the saying goes when you point your finger at anyone you have 3 pointing at yourself

December 02 2011 at 1:36 PM Report abuse rate up rate down Reply
Mary

I've lived through several recessions. You hit the nail on the head. Learn the difference between necessities and luxuries and learn to appreciate the simple things. Make due with what you have for as long as you can, and then make due with the bare bones model when you have to break down and get a new one. Plan on eating home more often than you're used to and learn to get by with commercial TV instead of cable. And get a job-- any job-- until your dream job comes along. A bad credit report can negatively impact your ability to get a job (everyone does background checks these days), so you want to be sure to keep paying your bills on time. Being out of work for more than six months can also hurt your chances of getting hired. Good luck!

December 02 2011 at 10:57 AM Report abuse +1 rate up rate down Reply
Morris Cantonitis

Wells Fargo:
Please add $200,000 into our savings account for practicing extortion and we’ll accept your forgiveness.
Our attorneys know that no one told u 2 investigate whatever it is u did. U took that action upon yourself.
The charges for those come out of your pocket and do not get added as debt in any margin trading account.
Your deadline is by Christmas.
If it goes to court, you will end up paying millions for practicing extortion on customers and maybe hundreds of millions.
Thank U
FMC

December 02 2011 at 9:41 AM Report abuse rate up rate down Reply
Kevin Mzansi

Nice article! A job is a job at the moment, but things will not always remain bad. We now have a cohort of people who know how to live frugally and get responsible with their finances, while they are still young.

December 02 2011 at 1:33 AM Report abuse -1 rate up rate down Reply
AXTAXDAVIS

Good Article ! Frugal is akin to wise ! If you cut off your dish or cable and instead use the FREE over the air digital converter box, you will save up to $800 a year ! Likewise for internet.. we still use dial up .. and just go to a cafe when we want to do a heavy download.. saving another $500 a year that way. It all adds up.. THINK>. how did your great grandparents survive ?

December 01 2011 at 8:37 PM Report abuse +1 rate up rate down Reply
fthoma

You can't blame Bush forever. If you read anything other than HuffPo you would realize that the blame is on both sides. As well as your own. Did you major in a "Studies" course or did you learn something that an employer would want to hire you to practice for them? Technical jobs are everywhere, all it takes is education and competence. Crapping on police cars at some "Occupy" camp might have been fun for a while, but it's a big yawn to most people, who consider them all losers. No one owes you anything.

December 01 2011 at 7:23 PM Report abuse rate up rate down Reply
martinsportraits

This country is a backwater cesspool of greed and political corruption , as a matter of fact , its the corporate giants that really run the country , not the politicians they have bought and paid for ,Its one corrupt chess move after another , Take the Iraq debacle that has stretched on forever in the untold Trillions of dollars , I bet if you were heavily invested going in with those companies that got those massive no bid pentagon contracts , like so many Republicans were , you just did great , Your kids Yale educations were just paid for....on the other hand if you were a middle class idiot US taxpayer or some dumb kid from a poor midwest rustbelt town who is now six feet under from serving ....well things could have gone better .....The painfully stupid people in America need a wake-up call......pronto!!!!!!!...

December 01 2011 at 4:05 PM Report abuse +1 rate up rate down Reply
1 reply to martinsportraits's comment
fthoma

This attitude helps you in what way? The opportunities were there and you spent your time screwing off.

December 01 2011 at 7:24 PM Report abuse +1 rate up rate down Reply
indisposed99999

What Gen Y really needs to accept is that they are not "entitled" to anything in life. Its incredibly unfair that their parents' generation refused to address the obvious fact that our system of entitlements (federal) and public sector compensation (states) is unsustainable. It doesn't make sense to any rational individual that we have not raised the eligibility age for SS or Medicare in the 50 years the programs have been around, despite the fact that average life expectancy has risen from 64 to 80 in that same period. Its equally unfair that they are going to have to suffer a lower standard of living to support the entitlements paid to their parents, AT THE SAME TIME they will not enjoy those same benefits. However, that is life.

There is no easy way out of our current mess. In fact, the chief problem is that the american people consistently choose the promise of a pain-free solution, no matter how unrealistic, over making the tough decisions that are needed. IN other words, as a nation, we have the collective consciousness of a child.

Fortunately, the bond market is not subject to the whims of political desire.

December 01 2011 at 3:41 PM Report abuse -1 rate up rate down Reply
1 reply to indisposed99999's comment
kernershort

The retirement age for Social Security HAS BEEN RAISED. And Social Security has been running a SURPLUS since it was adjusted in 1986, however, the wonderful government in Washington has been systematically stealing money out of the trust fund for years. The scoundrels in Washington know that they cannot pay back the billions they stole, so they are telling Americans (who only read the sports pages) that Social Security is going bankrupt.

December 02 2011 at 11:30 AM Report abuse rate up rate down Reply