Millennials (1980-1997, or born as late as 2004, depending on who you ask) now surpass the baby boom generation (1946-1964) in size, 75.4M to 74M. Millennials aren’t that different than Boomers in the actions they take in life, they just tend to take them later, by around a decade. What does this mean for the fastest growing city (Yes, that is Seattle, according to David Roberts of Vox) in the country?
Well, many things. Millennials are the generation facing arguably the worst economic factors seen since the Great Depression. Rising home prices, high student debt and lack of entry-level jobs for graduates, all equate to a grim future. As the tech industry rises, it continues to draw the millennials from around the country to its hubs, which seems to exacerbate such issues. Tech giant Amazon seeks to mitigate these factors when it finally decides where it will land its HQ2. Nick Wingfield of the New York Times reported on Amazon’s April wrap-up of the 20 finalist cities for the company’s new second headquarters. Among his cited concerns regarding Amazon’s selection of its H2Q were the affect it would have on the local labor market, housing affordability, gentrification, public transportation, and displacement. While Amazon alone is not to blame for the factors contributing to economic concerns, it is often the scapegoat.
Studies in the UK and the US have had similar results about Gen Y, namely that the millennial generation will be the first in decades to be financially worse off than their parents. To curb this problem, Britain has proposed a citizen’s inheritance, a one-time payment of up to 10,000 pounds to its citizens over the age of 25, per a report produced by the Resolution Foundation. “Too many young people are left feeling that our nation’s priorities lie elsewhere and not with them. Older generations have more wealth but, despite decades of promises, no social care system adequate to provide the support they deserve, need and expect,” says Torsten Bell, who directed the report for the group.
The UK isn’t the only international destination feeling the tide of the millennial presence. Asia has the largest millennial population globally, with over 1 billion millennials, per a recent study by the Brookings Institution. The study, written by three authors from the World Data Lab, reports that the annual aggregate income of millennials is expected to pass 4 trillion by 2030. So, while we may face a grim future from the US headlines perspective, on a global scale, the millennial generation will have more spending power than any other existing generation in little over a decade. As of 2018, which marks the ‘peak millennial’—the moment when the last of the generation reaches their 18th birthday (per Brookings, millennials are those born 1980-2000—which happens to be an average of other reported sources), the global economic impacts of this generation are speculative at best. While the Urban Institute describes Gen Y millennials as the most “optimistic” generation, they also can’t offer a clear picture of the group’s ability to retire successfully or meet the other challenges accumulating in the US and UK. Brookings points to higher rates of college education and higher earnings for women as encouraging signs for millennials’ financial futures, but acknowledges the aforementioned struggles faced and millennials’ general delay in making major life changing decisions such as homeownership, marriage, and childbearing, that have been traditionally associated with economic stability, are still concerns.
As Michael Hobbes, former Seattlite and author of FML in Highline, an online magazine of The Huffington Post, puts it, “The most striking thing about the problems of millennials is how intertwined and self-reinforcing and everywhere they are.” So, what can be gleaned from understanding that a situation has been, and is being created still, that effects a peaking population around the world? Well, the bottom line is, as Hobbes puts it: “We can let our economic infrastructure keep disintegrating and wait to see if the rising seas get us before our social contract dies. Or we can build an equitable future that reflects our values and our demographics and all the chances we wish we’d had.” And therein lies the key question for real estate brokers, builders, developers and investors alike—what is the future we are creating, and how are we getting there? Seattle saw an over 5% rise in millennial population between 2005-2010, an over 10% rise between 2010-2015, and is currently ranked 4th in the national for top cities moved to by the generation. We better decide soon.