Commentary
The Unemployed May Be One Of Your Best Targets
- by Lindsay Schutte , October 2, 2009
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.*
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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.
Lindsey made me think and feel some things that are shifting and shaping, day to day it seems. With the average unemployment for 16-34 year olds at about 16%...and at 50% total out of work, the Gen Y story is stunning, numbing, but man, we'd better splash some wake up on our faces about the story they're telling. Hell, with the unemployment rate of 20-24 year olds up by 50% since August 2008, the Gen Y story, person by person, needs to be told, to be felt, right now, vividly in words and pictures.
I would love to see Lindsay's Magid or someone get the Gen Y stories on video and on a posting wall....a continuous roll on an anchored spot on their site and on YouTube. It's important stuff, on a human level...and if the real-wake-up-world of marketing isn't re-focused, rethinking authentically about this, it will be more than a lost revenue opportunity, it will be a human shame. PS: Gen X and Boomers may be in "better shape" but we know damn well that they, too...that we all, are living, sucking wind with such a new and unknown, in-your-face day-to-day fear, that the sheer anxiety of it all will have a lasting huge ripple effect. If we ignore the Gen Y or any bracket of consumer now, I think it would be a good bet for serious blowback, from an emotional place we don't fully appreciate yet, and how that emotion will play into buying power, brand loyalty. Yes, high unemployment rates inevitably translate into low buying power, but Lindsay is right emotionally and intellectually when she says: "... this is an ideal time to figure out a way to connect....." and "....(Gen Y) has consistently been the most optimistic...most likely to believe... least likely to cut back on products or services that support their media-centric lifestyle." Lindsay's and Magid's insight about " digging into their social circle to share services" should be enough for marketers to amp up, not put on hold, meetings and action now with their agencies about branding and digital alliances. Gen Y seems to have a new, evolved brain, and heart, for something we may have thought left behind in their fragmented, frantic tech-connected lives: they deeply feel, store away, and remember things. How do our clients, the people and the brands, want to this and any market to think, to remember them? -- Jan Zlotnick, strategic-director, The Zlotnick Group, http://www.janzlotnick.com
RE: "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, totaling 50.4%."
Does no one find it odd that percentages from three separate groups are added together and presented as if the sum is meaningful?
What is the number of 16-19 year-olds? the number of 20-24 year olds? the number of 25-34 year olds?
The percentages must be applied to each group's member number, totaled, then divided by the sum of the three group member totals. At most, the total percentage could never be higher than a little less than the highest of the three percentages.
Even if each group had the same number of members (not likely), the separate percentages given above would result in a TOTAL unemployment percentage of 16.8%, NOT a preposterous 50% (I'm picturing young adults carting around wheelbarrows of worthless young adult debit cards to purchase an overvalued job-finding app).
For the following group (using the same scenario) this % would be 7.7%, NOT 23%.
In addition to just being Wrong, these reckless "facts" misrepresent the current state of the economy.
The following subjective opinions may be valid, but since they are preceded by these egregious examples of lazy math, I am skeptical, as they have thrown the author's analytical skills into doubt.
Perhaps it is this lack of analytic rigor that has led to a "50.4%" unemployment rate in Gen Yers.
Apparently, Ms. Schutte needs to brush up on her math skills: you don't add up percentages of three groups and arrive at a total, you add up the number underlying the percentages and divide by the total to get the percentage for the three groups combined. What's even more appalling is the fact that a reader writes a comment quoting the absurd percentages, indicating that your "Gen Y" readers don't even see the mistake or absurdity of it. Furthermore, optimism isn't something unique to Gen Yers - young people typically tend to be more optimistic than their older peers. And, Ms. Schutte completely misses one of the most compelling reasons to target young adults to build brand loyalty; they will be around longer as consumers and typically will command more spending power as they age (not to mention that they often are able to resituate faster when things first start to pick up because they are less expensive hires).
If this type of analytic prowess is characteristic of Gen Y, then it becomes a lot easier to see why they are disproportionately unemployed.
I don't think it has to do with how the percentage were totaled or lowered buying power, I think that everyone need to think about alternatives to how they want to live their life.
Is it time to go back to school? Is it time to switch careers? Is it time to switch industries? Isit time to start your own thing? We all need to focus away from the markets or brands and look at what we can do to help ourselves. Unemployment is not going away so you need a Plan B while the marketplace is being reshaped.
It is a tough job market out there as the latest unemployment numbers reveal. And specially the young are the hardest hit. However, the number could be better weighted as people have already stated in the previous comments to reflect a more accurate reality.
Despite the blurred reality, there is always a market out there up for grabs, like the younger generation and other certain demographics(Latino/as). So you just have to be creative and find the niches: they are there.