Why this is the worst time to be young

Get a university degree by 21, buy a house by 27, get married by 28, start a family by 29. That was the modest middle-class dream set by our parents for us. It was the path to a good and happy life.

Instead, what we have is a mountain of student loan debt, houses that are “seriously unaffordable”, an unaffordable love life, and no children. What used to be milestones in our parents’ lives are now our impossible dreams.

Just when the tide of the last recession has started to fall, and just when young people are starting to find some stability in their lives, there will be another greatest financial crisis waiting at the corner. There is no doubt that the coronavirus will bring a global financial crisis on a catastrophic scale – the only question is how big and how long.

Whichever the case, the young people in Malaysia will suffer the most.

They will be the first generation that is worse off than their parents’ generation; they will be the first burnout, lonely, financial-crisis generation; they will be the first generation that understands that hard work and discipline is not enough to promise a decent life.

In short, young people are screwed.

Getting out of the millennial trap

To be clear, there are two groups of young people in the workplace now. One, the older millennials (between 30 to 35 years old); two, the younger millennials (between 24 to 29 years old).

The older millennials are the ones who have entered the workplace for approximately 10 to 15 years and they ought to be at the point of scaling upwards, in career and wealth. Whereas the younger millennials are their early career.

Both generations do not face a hopeful outcome.

Younger millennials are entering a job market that is shrinking in vacancies and opportunities. They are called the “recession graduates”.

People who enter the job market during a recession suffer more lasting disadvantages than those who joined during economic prosperity.

A Stanford study has found that recession graduates saw a dampening effect on their salaries regardless of education levels. 

They also work more but earn less; they are less likely to be married and more likely to be childless, and they have a higher death rate due to poorer health. These effects could be large and lasting, and in many occasions, they are permanent.

Recession graduates and the unlucky draw

This is unsurprising. Recession graduates cannot afford to choose a job that gives them the best opportunity to grow. They have to settle with employers who are much smaller and pay less, offer fewer growth opportunities and lesser job security.

Then the spiral happens – they will be permanently stuck in a “downward-shifted economic trajectory”. To climb up from the abyss of low wage and bad jobs would take many years. 

The severe economic disadvantage would cause their health to deteriorate. And when their health deteriorates, they are left without sufficient medical protection or savings to get them out of it. In other words, if you start off on the wrong footing, it is difficult to get back on your feet.

Many economists said that a phenomenon called “hysteresis” would occur for recession graduates. This means even if the economy recovers from the recession, recession graduates would still continue the suffer the scarring effects on their career, health, and relationships.

Worse, if recession graduates fail to find a job during this time, or if they are laid off or put on leave, everyone will suffer. 

Sustained unemployment among young people will create a labour market that is less competitive, less innovative, and less skilful. Even the best talents will turn rusty if we don’t use them for some time.

The generation that gets hit twice

Older millennials could relate because they were once recession graduates too – from the Class of 2008’s Financial Recession. They have seen how the recession has resulted in a decade-long of low wages and high cost of living. 

They had to settle with low-paying jobs at any company that is willing to hire them, and this had severely affected their social mobility.

And after ten years, just when they are ready to accumulate wealth by purchasing valuable assets like houses and company shares, they are now hit by another financial crisis that may be worse than the previous one.

So older millennials are now forced to delay the process of purchasing assets that could make their lives more stable – they have to trudge it out again. To be hit by two financial crises at the two most pivotal moments of their careers – entry and scaling – is hard to bear.

Money is a major source of stress for young people today. Only one-third of young people could afford a house, only 16 percent of young people find it easy to save, and only six percent of young people have sufficient savings for a rainy day.

Work hard and you still won’t succeed

The most depressing reality of all, however, is knowing that hard work and discipline itself won’t promise you a good life. 

Growing up, the lessons taught by teachers, parents, relatives, and friends have always been that if you work hard enough, and you are not lazy, you will succeed. And if you have not succeeded, that is because you have not worked hard enough.

That is no longer true. Because now you could do it textbook-perfect – select a degree that is high in market demand, study hard and get good grades, select a job that offers the most benefits, work till you burn out – you could still struggle to make ends meet.

We call millennials many things: lazy, irresponsible, selfish – but above all, we call them entitled. 

But it seems that what they are least entitled to is a decent life. 

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JAMES CHAI is a legal consultant and researcher working for Invoke, among others. You may reach him at jameschai.mpuk@gmail.com. - Mkini