Marxkors 1

Will Marxkors
Research Paper 1
10/8/15
Probst
Millennials and the Challenges They Face
The Millennial generation is growing up in a different time with different challenges than
previous generations and their decisions will have a big socioeconomic impact. The issue of
how they are overcoming these challenges is not talked about as much as the challenges
themselves. This paper will take a look at the strategies the Millennial generation is using to
overcome these challenges. The Millennial generation is defined as people who were born
between 1980 through 1999. Some of the challenges the Millennials are facing is student debt
coming out of college and trying to pay it down. A popular thing is now moving back in with
your parents to save money with 25% of them being employed, but another 44% who moved
back in are unemployed. Millennials are forgoing buying cars instead looking to alternative
forms of transportation such as public transportation and Uber. These trends toward multi family
homes and fewer big purchases of cars and houses could have big implications on the future.
Millennials are struggling to find jobs, get out from the debt of their student loans, and
establishing their own families, but they are trying to overcome these challenges.
Some have called the Millennial generation stupid or dumb because they dont seem to
have the knowledge of older generations. Mark Bauerlein wrote a book called The Dumbest
Generation. In it he looks at how the Millennials dont have the knowledge of previous
generations, but what he failed to look at was IQ scores. Yes his research points out a lack of
factual knowledge with Millennials not knowing facts such as the most heavily defended border
or who Dick Cheney was. Yet this generation's average IQ is higher than past indicating a high

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intellectual capacity and this generation also has the Internet at its fingertips which allows them
to look up and digest facts whenever necessary (Begley). Bauerlein blames new technology and
social media for stupefying the Millennials but people also said the same thing about Baby
Boomers and television and Generation X and video games, but both of those generations have
gone on to be successful. Millennials will grow up and learn to pick up knowledge but can they
shake this stereotype in order to get a job.
One of the biggest challenges facing the Millennials is the struggle to find a job.
Unemployment rate for 20 to 24 was 11.5 in September 2014 but that is three times the rate of
people over 35. Gail Heriot of The Harvard Journal of Law and Public Policy wrote that the
current employment regulations are hurting the unemployed Millennials because if they dont
work out they are afraid of a lawsuit. Heriot cites how Title VII was originally only for
businesses of 100 employees but has steadily been amended down to 15. This has led employers
to avoid hiring young people because they much more likely to be wrongly accused for firing
than not hiring someone. Heriot suggests one solution could be to amend the law to allow
employers to recoup their legal fees. Employers could sign new Millennial employees to 6
months or 1 year contracts to see how they fair at the job. This process would also give the
Millennials a bigger incentive to work harder if they want to earn the job. Millennials will start
running into a problem with their student loans and credit ratings if they cant secure jobs.
Millennials that unable to secure a job will start seeing a credit rating problem. This
problem will come from two fronts. First will be their inability to repay students loans, and
second from not being able to get new lines of credit. Emily Goodman in her article Here come
the Millennials: Are They Ready to Rent? cites that the average credit score for people between
20-29 is 641 compared to the American average of 675. This might not seem like to much of a

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difference but when you see that 16 percent of Americans aged 18-29 didnt use a credit card in
2012 compared with eight percent in 2007 its more worrying (Goodman). Millennials not using
at the very least student credit cards, cards with lower limits, when they are younger will struggle
with their credit scores because of a lack of credit history. Lacking a credit history and credit
score will make it harder for Millennials to get mortgages and car loans. The other aspect
dragging down their credit history is student loan debt. Stephan Whitaker of the Federal Reserve
Bank of Cleveland wrote an Economic Commentary and in it calculated that the median balance
of outstanding student loans to be $16,808 and the percentage of people with over $25,000 has
more than doubled from 12 percent to 34 percent. Having this much outstanding loan debt is
hurting Millennials abilities get loans for homes and cars.
Millennials are not only struggling to buy homes but also choosing not to rent
apartments. Goodman cites the 2.4 million Millennials as having not entered the real estate and
that doesnt include those that left the market to go home and live with their parents. Goodman
uses one such example in Sarah. Sarah was a young tech professional that had secured a job
outside New York City and was renting an apartment in the city(Goodman). Sarah wanted to live
in the city to be close to friends and activities, but her commute to work and the burden of rent
left her with little free time and money so she moved back in with parents in the suburbs. Sarah
is not the only one doing this, Goodman points out that 25 percent of Millennials living at home
are employed. The reasons are obvious with 96 percent doing chores, 75 percent contribute
financially to bills and only 35 percent pay rent(Goodman). By paying smaller bills and most
not paying rent they are saving a lot which will help them pay down those student loans or save
enough money to try and by their own homes(Goodman). Whitakers research estimates that this

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is delaying the start of households by one year, Delaying starting their own families and moving
into their own places later will delay the economic cycle of home and car buying.
Housing is not the only major expense that Millennials are taking a different approach
compared to previous generations, they are also looking at transportation differently. Not only
are they not buying cars, they are driving less, getting their drivers license later, and looking at
cars differently(Badger). Looking at the Washington Post article The Many Reasons Millennials
are Shunning Cars by Emily Badger only 90 percent of Millennials used a car in the last 30 days
compared with 95 percent of Generation X, people born between 1965 and 1979. The big
difference is in public transportation where 20 percent of Millennials used in the last 30 days
compared to just 8 percent of Generation X(Badger). That says two things about Millennials,
first they prefer to live in cities that offer public transportation, and second they care for driving
as much. Its more than just that a national survey by the University of North Carolina showed
that those between 18 and 34 value mobile phones and computers more than cars(Thompson).
This shows that they dont see cars as the status they were for Generation X and Baby Boomers.
These trends could have big implications.
This trend is causing big problems for The Big Three in Detroit (Ford, GM, and Chrysler)
(Thompson). They are all trying to sell to this young generation and dont know how Ford tried
giving influential bloggers a Fiesta, a subcompact car, for six months and have them blog about
them(Thompson). The bloggers loved them and Ford initially had good sales but after 18 months
sales on fell 30 percent(Thompson). GM has tried to reach them by hiring youth brand
consultants MTV Scratch, the marketing cousin of the TV network, in attempt to get the attention
of Millennials(Thompson). Many other automakers are trying to allure the Millennials by
becoming more eco-friendly. All these tactics have so far not yet yielded much results with

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Edmunds.com reporting that new purchases of cars by people aged 18 to 34 has dropped 30
percent(Thompson). So then how are the Millennials getting around?
The answer is technology. Like most things this generation does they are using new
technology to get around, with ride sharing apps like Uber, Lyft and Zipcar, and good old public
transportation. Uber and Lyft are two of the most popular transportation methods for this
generation by allowing them to use their phones to pay and being cheaper than a traditional
cab(Stella). They work by the user setting where they want to be picked up and dropped off and
then drivers deciding if they want to take that job(Stella). If a driver accepts then they meet
the passengers pick them up and the passenger pays over them over the app securely with no
need for cash or a credit card on your person(Stella). Not only do Millennials find this easier and
cheaper, but they can also be on their phones while they are getting a ride and stay connected to
their social media. Millennials are using to Uber to make money as well by becoming
drivers(Chapman). In some cases Uber even helps Millennials finance cars if they have another
job as well(Chapman). These new technologies are changing the way that Millennials get
around and offering them the chance to make some money too.
Millennials have some major challenges to overcome. They need to fight through the
stereotype that they dont know anything and are glued to their phones. They will only get past
that when they mature and grow up. Getting a job will help this and their rising student loan
debt. After they tackle these first two problems, taking on the problem of housing and starting
their own families will come much simpler. Millennials are tackling the transportation head on
and with a new approach not seen before with their use of Uber and Lyft. Millennials have many
challenges in front of them but they are starting to tackle them with some new and old
approaches.

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Works Cited
Bauerlein, Mark. The Dumbest Generation: How the Digital Age Stupefies Young
Americans and Jeopardizes Our Future(Or, Don't Trust Anyone Under 30). N.p.:
Penguin, 2008. Print.
Begley, Sharon. Culture: The Dumbest Generation? Dont Be Dumb. Newsweek.com.
Newsweek, 24 May 2008. Web. 08 Oct. 2015.
Chapman, Cody. Personal Interview. 22 October 2015.
Goodman, Emily. "Here Come The Millennials: Are They Ready To Rent?." Journal Of
Property Management 80.1 (2015): 16-21. Business Source Complete. Web. 8 Oct. 2015.
Heriot, Gail. "Working Backwards: How Employment Regulation Hurts Unemployed
Millennials." Harvard Journal Of Law & Public Policy 38.3 (2015): 781-787. Academic
Search Complete. Web. 8 Oct. 2015.
Rappaport, Jordan. "Millennials, Baby Boomers, And Rebounding Multifamily Home
Construction." Economic Review (01612387) 100.2 (2015): 37-55. Academic Search
Complete. Web. 8 Oct. 2015.
Stella, John. Personal Interview. 24 October 2015.
Thompson, Derek, and Jordan Weissmann. "The Cheapest Generation." Atlantic 310.2
(2012): 48-51. Academic Search Complete. Web. 8 Oct. 2015.
Whitaker, Stephan. "Are Millennials With Student Loans Upwardly Mobile?." Economic
Commentary 2015.12 (2015): 1-5.Academic Search Complete. Web. 8 Oct. 2015.