By John Gallagher
Detroit Free Press
WWR Article Summary (tl;dr) Many companies are changing their policies to support the needs and demands of their millennial workforce. But are these policies enough? From crushing college debt to the burden of wage stagnation many in this generation are facing greater challenges in the workplace than their elders ever did.
Detroit Free Press
Like all millennials, Martha Potere, 32, a former Peace Corps volunteer now working as an urban planner for a neighborhood group in Detroit, remains a long way from retirement — but not long enough not to fret about it.
“I work for a nonprofit. I don’t even have a 401(k),” she says. “Retirement is really the last thing for a lot of us because we’re very much struggling from day to day, whether we’re paying off current debt or just not making enough to put away money in enough quantities for when we’re at retirement age. Personally I’m quite concerned about that.”
Concerns over retirement present just one issue that defines the generation known as the millennials — the population cohort roughly 20 to 35 years of age. Lampooned by their elders as feckless kids concerned with selfies and social media, millennials actually are proving the most consequential generation since the post-war Boomers.
But the tech-savvy millennials may also face greater challenges in the workplace than their elders ever did. Coming of age during the Great Recession, they lost out on several years of potential wealth building as companies slashed payrolls and demanded more from workers while paying less. College debt, the rising cost of health care, and other burdens also beset millennials.
Easing the path of millennials requires support for a host of civic and corporate policies that, up to now, remain accepted only in part. Some of those policies require action by the national government — like shoring up Social Security so that its benefits are there when Potere and other millennials need them — while some reforms will come in the workplace, the domain mostly of corporate decision makers.
Across the world of work, companies are already changing their policies to support the needs and demands of their millennial workforce.
Among those:
More parental leave for new parents. British entrepreneur Richard Branson’s Virgin network of companies recently said that both men and women who had worked for the company for at least four years would be entitled to a year’s leave on full pay as new parents. “As a father and now a granddad to three wonderful grandchildren, I know how magical the first year of a child’s life is but also how much work it takes,” Branson said in announcing the policy.
No more annual reviews. General Electric recently abandoned its formal annual performance reviews for its 300,000 employees in favor of a more informal system of more frequent feedback via an app. Other high-profile companies like Microsoft, Accenture, and Adobe have gone the same route. GE’s head of human resources, Susan Peters, told the media, “It’s the way millennials are used to working and getting feedback, which is more frequent, faster, mobile-enabled.”
More training and education. Surveys shows that millennials rate training and advancement opportunities very high on their wish list. Companies are listening. Not long ago Starbucks announced its college achievement plan, offering full-tuition coverage for eligible employees to earn a bachelor’s degree from Arizona State University online. Millennials also want a very clear pathway to advancement, both in their positions and in their salary and benefits. Many complain that clear pathways to advancement just aren’t there.
“Sometimes it seems the only way to advance is to leave a current position and that’s not always ideal,” said Meredith Reynolds, 27, a staffer with the Detroit Revitalization Fellows, a program of Wayne State University to seed talented young people with local organizations. “One way to alleviate that would be to have a really clear pathway for advancement, have the opportunity to talk with my boss about where my future can be with this company.”
Lindsey Pollak, a New York-based author and consultant on millennial issues, said employers need to heed millennials’ widely held desire for advancement. “A vast majority say they want to be leaders in the next five years and want the training, coaching, and mentoring to get there,” she said. “I think we have a very ambitious generation, a generation that wants to take the lead.”
Sky-high debt
But the education and training track comes with an explosive issue for millennials — college debt. Terryn Hall, 31, who works with inner-city youth at a nonprofit called Teen Hype in Detroit, said her college loans, including for a master’s degree in arts management, total about $90,000 — a burden that will limit her options for years to come.
“You don’t understand some of the trade-offs financially you make when you have your whole family riding on you to get your college degree,” Hall said. “You don’t realize until you’re 30 or whatever and you’re like, ‘Oh, man, these student loans really take a toll on my ability to buy a home.’ It’s out of reach because our debt burden is too high because of our education.”
Adding to worries over college debt is another factor: wage stagnation. Adjusted for inflation, median household income in the U.S. is lower today than it was in the late 1990s, and the burden of that stagnation often falls on millennials rather than on their somewhat-better-off elders.
“We aren’t getting raises,” Reynolds said. “We aren’t getting promotions. We don’t have pensions. We don’t have some of the benefits and some of the security nets that our parents had. We see that, and that’s kind of frustrating.”
More flexibility
Other policies that could help the millennials include flexible hours to fit the millennial lifestyle, and allowing them to work from home or from coffee shops instead of being tied to a cubicle.
Hall, who grew up on Washington, D.C., said flexibility options could be much greater.
“I think the government does a good job with flexible work arrangements but I think other sectors definitely haven’t been as responsive around building a culture around flexibility,” she said.
Potere said her generation also supports the “flatter” corporate organizations slowly coming into favor. “You’re one step away from your CEO as opposed to 25 people down the line so that interaction is more organic and people feel as though they have a tangible stake in the company,” she says.
Monique Morrissey, a labor expert with the Economic Policy Institute, a Washington, D.C., think tank, said extending workplace protections including overtime pay for longer hours also help the millennial generation — even if employers pay a short-term cost for them.
“All of these things that may in the short run reduce the flexibility of employers will in the long run lead to a more productive economy,” she said.
Haves vs. have nots
Many experts point to a disturbing fact: Options for advanced training, working from home, and other trends mostly benefit the better educated, middle-to-upper-income half of the millennial generation. For poor and working-class millennials, long hours, low pay, few options on child care, and lack of advancement remain all too common.
Indeed, flexiblity for lower-class millennials usually means being at the call of employers to work whenever the boss demands on short-term notice, regardless of the burden it places on child-care arrangements and other family obligations.
“There are huge differences between those who have a bachelor’s degree and those who don’t,” says Lou Glazer, founder of Michigan Future, a think tank. Indeed, the difference in outlook for millennials with and without college degrees is greater than between millennials and boomers. “College attainment is dividing everything at the moment,” he said.
And, Glazer notes, “This was the generation that came of age during the Great Recession so it was harder for them to find initial work.” That slow start has made it harder for millennials to start building wealth.
Potere agrees.
“It’s not only the debt, it’s the lack of wealth that really defines us,” she said.
What it takes
So helping the lower half of the millennials generation requires a different set of policies than helping the top half. Giving the top half a break on the rate of interest on college loans may help; but the bottom half needs help just to get to college at all.
Timothy Bartik and Brad Hershbein, economists at the W.E. Upjohn Institute for Employment Research in Kalamazoo, said programs like the Kalamazoo Promise, a philanthropic effort that guarantees college tuition to Kalamazoo kids who graduate from high school, is one answer.
Other changes would include making it easier to enroll in programs that reduce college loan debt based on one’s income. Such programs exist now but are hampered by red tape. “The government makes it a lot harder than it should be to sign up for it,” Hershbein says.
And, the economists say, lawmakers need to shore up Social Security to ensure that millennials will have it in 30 years or so.
“The long-term financial issues of Social Security are solvable if there’s the political will to do it,” Bartik says.
