DALLAS — Megan Lyons gave up a corporate job to follow her passion. The 30-year-old, who launched her fitness and nutrition coaching business 16 months ago, now has a waiting list of clients and is on track to earn six figures this year.
Jane LeBlanc has two degrees but has not been able to find a permanent job in the last seven years. The 33-year-old works as a temporary proofreader and freelancer.
The two women stand at opposite ends of the employment spectrum, but they have one trait in common: They’re millennials — 18- to 34-year-olds who make up the largest, most diverse generation in America.
The roughly 74 million millennials will have a profound economic effect as more baby boomers retire. They’ll spend more money on new technology, they’ll start the next Google, and they’ll become the main breadwinners for their families.
But some of their distinct characteristics may delay their full impact. Millennials — also called Generation Y — tend to be highly educated but burdened by student loans. Many are unemployed or underemployed.
They also are waiting longer to marry, have kids and buy a home or a car. Many still live with their parents.
“You have this big generation — bigger than the baby boomers now — and they have the potential to buy cars, buy houses, and the numbers do matter,” said Sarah Watt House, an economist for Wells Fargo who studies millennials. “Look around the world: One of the reasons Japan is really struggling is that their population is not only aging, but declining.”
Unlike previous generations, millennials face a tough climb up the economic ladder. Younger millennials (ages 18 to 25) entered the workforce during the recession, complicating their efforts to find a job and postponing their peak buying power for years.
Estimates of millennials’ purchasing power vary widely, but a U.S. Chamber of Commerce report put their annual spending at $200 billion — a fraction the size of the $1.2 trillion U.S. Hispanic consumer market.
So far, millennials have been more of an economic drag than a driver, but that could change as the economy and employment opportunities continue to improve.
Last year, nearly 5 million millennials were out of work across the U.S. They made up half of the unemployed people in the nation, the most of any age group.
The unemployment rate for millennials is much higher than for other age groups, and it ticked up in March. More than 10 percent of people ages 20 to 24 were out of work vs. 5.6 percent for those 25 to 34 and 5.5 percent for all workers.
The reality may be worse because statistics often don’t reflect people “with a degree who are working full time at Starbucks,” House said.
Take LeBlanc. Though armed with a bachelor’s degree in technical writing and a master’s in journalism, she can’t find a permanent job. She works at least 40 hours a week as a temporary proofreader for a Big Four accounting firm in Dallas and writes for the Dallas Observer on the side.
“I make enough as a temp to live on, but I would like to be a permanent employee somewhere,” said LeBlanc, who owes about $47,000 on student loans. “It’s been a very long time since I was permanent.”
COLLEGE DEBT LEAVES GRADS LESS WEALTHY THAN PARENTS
For now, millennials’ employment, income and debt struggles have kept many of them from buying a home, a trend that echoes through the economy. If you’re not buying a home, you’re not paying for a home warranty, movers, roomfuls of new furniture or home repairs.
“Millennials are the first generation to see home prices fall, and because of that they’re afraid to buy houses, like in the Great Depression,” said Mark Dotzour, chief economist for Texas A&M University’s Real Estate Center.
Nationally, the number of first-time homebuyers is down to 27 percent of all homebuyers, from about 40 percent before 2007.
In addition, about 30 percent of millennials — 22 million nationally — lived with a parent in 2013.
LeBlanc rents a duplex with her 74-year-old godmother who helped raise her. Last year, for financial reasons they had to sell a house they jointly owned, she said.
Of course, some millennials have bucked the trend and bought homes.
Lyons, 30, and her husband — who both made six-figure salaries as consultants for a few years — saved to buy their first home in Dallas in 2012.
“That was a big deal,” she said. “That’s the one thing in my life that makes me feel like an adult. I never spent close to that amount of money, and it was really hard to wrap my head around.”
Overall, low homeownership rates mean millennials are not building home equity and not benefiting from home price appreciation.
Todd Allison, 33, earns a six-figure salary as a management consultant for Oliver Wyman, which enables him to sock away some money. The Army veteran, who spent time in Iraq, married in 2007, bought a house in 2013 and became a father nine months ago.
Like many millennials, however, he looks at saving in a different way.
“We’re not saving for retirement; we’re saving for flexibility,” said Allison. “I have some goals to potentially do something more fulfilling along the way. The idea of waiting until retirement to do things doesn’t make sense.”
Despite some struggles, many millennials are optimistic.
Nielsen found that 69 percent don’t think they earn enough to lead the lifestyle they want now, but 88 percent think they will in the future.
Other characteristics of millennials, such as their higher education, should benefit them as the economy improves and they land better jobs. As their financial situation improves, Wells Fargo’s House expects more of them to begin buying homes and investing.
Many millennials also feel strongly about volunteering and giving back to their community — a social impact that’s hard to quantify.
Farmer has started knitting hats for cancer patients. Lyons makes big annual charitable donations and even makes holiday gifts to causes dear to family members’ hearts.
Robertson created a blog and charity event called “It’s Her Strut” to raise awareness of self-esteem issues among women and young girls.
“I’m excited about my future,” Robertson said. “I’m not exactly sure which direction I want my career to take, but I’m learning so much.”
