American dream fades for Generation Y professionals
After being dismissed from her job as a Midtown Manhattan securities attorney in October 2009, Christina Tretter-Herriger hitched a used horse trailer to her Dodge Ram pickup and drove 1,628 miles to Texas.
The 32-year-old lawyer sold skin-care products in Houston before finding work as the assistant general counsel of a futures-trading firm where an irate customer punctuated a recorded voice-mail message with gunfire. “No one was left with the impression that he just happened to be phoning from a sporting clays range," she says.
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Eighteen months and two busted jobs later, the daughter of a retired physician and a former editor at Vogue circled back to upstate New York and hunkered down at a small legal office that pays about one-quarter of her former $165,000 salary.
Generation Y professionals entering the workforce are finding careers that once were gateways to high pay and upwardly mobile lives turning into detours and dead ends. Average incomes for individuals ages 25 to 34 have fallen eight per cent, double the adult population’s total drop, since the recession began in December 2007. Their unemployment rate remains stuck one-half to one percentage point above the national figure.
Three and a half years after the worst recession since the Great Depression, the earnings and employment gap between those in the under-35 population and their parents and grandparents threatens to unravel the American dream of each generation doing better than the last. The nation’s younger workers have benefited least from an economic recovery that has been the most uneven in recent history.
“This generation will be permanently depressed and will be on a lower path of income for probably all of their life — and at least the next 10 years," says Rutgers professor Cliff Zukin, a senior research fellow at the university’s John J Heldrich Center for Workforce Development. Professionals who start out in jobs other than their first choice tend to stay on the alternative path, earning less than they would have otherwise while becoming less likely to start over again later in preferred fields, Zukin says.
Michael Greenstone, who was chief economist at the White House Council of Economic Advisers in 2009 and 2010, says the shift to a downwardly mobile society may be lasting. “Children are not earning as much as their parents, and I think we’re laying the seeds for that to continue into the future," he says.
Only one-fifth of those who graduated college since 2006 expect greater success than their parents, a Rutgers survey found earlier this year. Little more than half were working full time. Just one in five said their job put them on a career path.
Those who finish only high school or drop out fare worse. Almost four out of five jobs destroyed by the recession were held by workers with a high school diploma or less, according to Georgetown University’s Center on Education and the Workforce.
Middle-income jobs are disappearing for a wide range of young professionals. The number of financial counselors and loan officers ages 25 to 34 has dropped 40 per cent since 2007, outpacing the 30 percent drop in total jobs for the profession, according to the federal Bureau of Labor Statistics.
Similarly, the number of hours logged by first-year and mid-level legal associates — a productivity measure of young lawyers — fell 12 percent from 2007 at some of New York’s largest law firms, says Jeff Grossman, national managing director of Wells Fargo Private Bank’s Legal Specialty Group in Charlotte, North Carolina. Yet profits per partner climbed $50,697 to $1.5 million on revenue of $66 billion last year, according to a separate survey of 86 of the world’s top law firms by The American Lawyer magazine.
“I had a lot of faith in the system, the mythology that if you work really hard you can achieve anything, and the stock market always goes up," says 2009 law school graduate Elizabeth Hallock, 33. “It was pretty naïve on my part."
Hallock is the named plaintiff in one of 14 lawsuits against some of the nation’s best-known law schools, including her alma mater, the University of San Francisco School of Law. The civil complaints, filed in 2011 and 2012, accuse the institutions of overstating graduates’ job-placement results and incomes.
Young Americans are struggling to reconcile their lack of economic rewards with their relatively privileged upbringings by Baby Boomer parents and the material success of their older peers, Generation X, born in the late 1960s and 1970s, says Kathy Sheehan, general manager of GfK Consumer Trends and Roper Reports, a unit of German-based research firm GfK.
“It’s a generation that had really high expectations, in some part driven by the way they were raised by their boomer parents," she says. “Yet, in the past five years they have had reality slammed in their face by the employment situation."
About 61 million people, one-fifth of the US population, work at jobs where median earnings declined since 2007 even as the 1.2 million households whose incomes put them in the top 1 percent saw their pay rise 5.5 per cent last year.