The news coverage went something like this: The housing crisis could be exacerbated, because people with prime mortgages have lost their jobs. Consumer spending may plummet after a recent stabilization. It is taking significantly longer for the unemployed to find a new job than in previous recessions. It's ugly out there.
Unfortunately, those who are most likely to be unemployed are members of Gen Y, and there hasn't been a lot of discussion about the facts and implications regarding this trend.
Let's start with the facts. For the month of August 2009, roughly 25% of 16-19 year-olds, 15% of 20-24 year-olds, and 10.4% of 25-34 year-olds are unemployed. As Frank N. Magid Associates, Inc. defines Gen Y, all of the aforementioned are members of the generation, aside from the 33 and 34 year-olds. What's more, the unemployment rate of 20-24 year-olds has increased by 50% since August of 2008.*
The rest of the age breaks available from the BLS show that Gen Xers and Baby Boomers are significantly more employed. Eight percent of 35-44 year-olds, roughly 8% of 45-54 year-olds, and 7% of 55-plus workers are unemployed, which is significantly lower than the younger cohorts. If you want to explore just how ugly it is out there, then locate your nearest unemployed 23 year-old and ask them about their job search. Better yet, talk to their parents.*
It's reasonable to believe that ignoring the Gen Y consumer would be a good bet right now. High unemployment rates inevitably translate into low buying power. However, I would posit that this is an ideal time to figure out a way to connect with this age group. Members of Gen Y, while suffering the highest unemployment rates, have consistently been the most optimistic according to Magid research. They are the most likely to believe the economy will improve in a year. They are the least likely to cut back on products or services that support their media-centric lifestyle -- in-home entertainment such as cable, communication services such as their mobile phone, etc. The research also shows that they are making ends meet by digging into their social circle to share services, by hunting for online bargains, and signing up for loyalty and coupon clubs. Gen Yers are out there looking for help and your company may be in the perfect position to provide it.
Returning to themes I have written about before -- Gen Yers, while picky consumers, are loyal once you snag them. They are diehard communicators who will readily spread goodwill about their favorite brands. They wield outsized influence on their parent's pocketbooks. Most importantly, they are in need of answers. If you are looking for a way to leverage the current crisis to build future growth, then turn to Generation Y.
Editor's note: The article has been amended since being posted.