The Abercrombie & Fitch flagship store on Manhattan’s 5th Avenue does a good job of attracting a crowd. A rotating crew of hunky, shirtless male models stand just inside the main doors, waiting to take pictures with eager tourists passing by. Inside the store, music thumps as shoppers peruse the merchandise across four dark floors covering 34,000 square feet. If not for all the T-shirts, jeans, sweaters and sweatpants, the place could be a nightclub.
For many millennials, this is what the working world looks like.
The national unemployment rate ticked up to 8.3 percent in July, but the rate for millennials is higher still; 13.5 percent of people between the ages of 20 and 24 are out of work, and 9.3 percent of those aged 25 to 29 are unemployed. But “underemployment” is a problem, too, according to a new report by research firm Millennial Branding and PayScale, Inc., which provides compensation data and software.
In many cases, the study found, Gen Y workers are toiling in low-paying jobs for which they are overqualified, at least on paper. While more than 63 percent of Gen Y workers have college degrees, they are more than four times as likely as workers overall to hold a retail industry job as a “Merchandise Displayer,” “Clothing Sales Representative,” or “Cell Phone Sales Representative.” More than 80 percent of millennials selling clothes have bachelor's degrees, while almost 70 percent of those hawking phones are college grads. The financial payoff after four years of higher education? The median pay for the merchandising job is just $23,400, while the other two pay around $28,000.
“Gen Y is finding themselves lost in this place of getting a college degree, paying a lot of money for that college degree and then not being able to put it to use and only finding jobs that typically don’t require a college degree, whether it be in retail or a barista or anything in the service industry,” says PayScale’s lead economist, Katie Bardaro. “And they’re just trying to chip away at their student debt any way they can.”
Where the Millennials Work
Ratio of Millennials to All Workers
|Sales Representative, Clothing||4.63x||$28,400||83%|
|Sales Representative, Cellular Phones||4.03x||$27,800||69%|
|Assistant Merchandise Manager||3.90x||$35,400||98%|
|Health Policy Research Assistant||3.60x||$37,500||64%|
|Associate Media Planner||3.50x||$32,900||95%|
|PC Maintenance Technician||3.46x||$33,600||45%|
|Product Support Specialist, Internet Services||3.42x||$37,200||67%|
|Civil Engineering Intern||3.38x||$39,500||75%|
|Source: PayScale, Inc.|
Those findings, based on information from as many as 500,000 Gen Y workers surveyed between July 2011 to July 2012, dovetail with the results of a national survey conducted by Republican firm the polling company, inc./WomanTrend on behalf of conservative youth group Generation Opportunity. That poll of 1,003 Americans between the ages of 18 and 29 found that 89 percent say that the economy is affecting their daily lives, with 51 percent having cut back their entertainment spending and 43 percent having reduced their food budget. Nearly four in ten say they have driven less and just over a quarter say they have moved in with family, taken on roommates or otherwise changed their living situation to lower their expenses.
The Generation Opportunity survey reinforced the idea that the effects of the weak economy on these youngest members of the workforce could have long-term consequences. Nearly 85 percent of those surveyed said they might put off or give up on making a major life change or purchase because of the economy. Nearly 40 percent said that they may at least delay buying their own home; 31 percent said they might hold off on starting a family; 26 percent said they would wait to pay their student loans or other debt; and 25 percent said that saving for retirement would have to wait.
PayScale’s Bardaro says that millennials who haven’t entered the workforce yet can still take steps to improve their job prospects – primarily choosing their college major wisely. Recent grads who majored in humanities, communications and the arts have more frequently found themselves forced to take low-end jobs. “Those [majors] are suffering more than the STEM majors – the science, technology, engineering and math majors,” Bardaro says. “So if there’s advice for Gen Y it’s to make sure you position yourself to be either a STEM major or at the very least take classes that prepare you for analytical thinking, because those are the areas that are growing.”