Thursday, January 13, 2011

Millennials Hit Hardest By Salary Freezes, Layoffs

Those who took on employment for the first time in 2007 expected that their futures would proceed as those before them.  Reasonable starting salary in the $30-60,000 range, annual pay increases of 6-10%, Christmas Bonus, performance bonuses, pay off those student loans, move out of Mom and Dad's house, buy a home, start a family....

These aspirations have been summarily quashed.  Instead, the Stock Market crash in October 2007 led to a series of quite unfortunate events, culminating in a new reality:  if they are lucky enough to have a job, the 20-30 year old American has probably received only minimal (at best) raises, few bonuses and, worst yet, may still be camped out at Mom and Dad's.

As the attached Article discusses, a recent study found that 20% of employees between 20 and 30 have suffered at least one pay cut since 2008, and nearly 15% have been laid off.  That did not happen for Baby Boomers starting out their careers between 1970 and 1992.

It is incredible to learn, in a Country with so much prosperity, that in 2010, the average raise was only 1.9%.  And we thought 2009 was a bad year - at least the average raise in that "golden" year was 3.9%. 

The problem particularly for the Millennials, is that future salary is often based upon starting salary (and to a lesser extent on current salary, which is in turn based upon your starting salary) - not just in one's present job, but in one's future jobs as well.  In addition, the current trend is to "promote" younger workers - via title only, without a concomitant salary increase.  many hired to be Clerks at clerk salaries are now "Managers" at Clerks' salaries.

Projected salary increases for 2011 are 2.8% but, really, consider:  2.8% of $40,000 is $1,120, barely enough to find a efficiency in Philadelphia, much less Manhattan, Chicago, Boston or L.A.

And, to make all of these matters even worse, where are the unemployed Millennials going to find work?  Where are the new college graduates going to find work? 

The answer?  Well, the author does not have one.  But, spending less and networking more are what the Millennials are doing.  Mom and Dad?  Chances are, one of them has become unemployed during the last 2 years, so the chances of borrowing a down payment on that first house are sketchy, at best.....

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