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Gen Y faces bleak future

News, 09 March 2016

GLOBAL: Millennials are often seen as an important target demographic for marketers but a new analysis suggests they may not be as wealthy as expected, implying that brands may need to rethink how they engage with sections of this group.

The Guardian used data from LIS, the Cross-National Data Center in Luxembourg which holds an extensive database of international incomes around the world, and focused on what was happening to millennials in eight western democracies (Australia, Britain, Canada, France, Germany, Italy, Spain and the US).

And it described a "a perfect storm" of factors – including debt, unemployment, globalisation and rising house prices – that it said were "besetting an entire generation of young adults around the world" and leading to "unprecedented inequality between generations".

A generation ago, young adults typically earned more than the national average but in the US, France, Germany, Italy and Canada they are now earning 20% less.

Over the same period, pensioner incomes have continued to rise, so that, in the US for example, the under-30s are now poorer than retired people. And in the UK, pensioner disposable income has increased three times as fast as that of young people.

The ramifications for wider society are likely to include everything from social cohesion to family formation, as a long-term trend towards children being better off than their parents goes into reverse.

Particular factors weigh more heavily in different countries. Young people in the US face a $1.3tn student debt mountain, while young Europeans are concerned about a lack of jobs, and those in the UK and Australia are increasingly resigned to never owning their own home unless they are lucky enough to inherit something from their parents.

And it is single millennials who are hardest hit, as rising living costs reduce their disposable income and make it more difficult for them to set up home by themselves.

Faced with the choice, some are opting for independence over consumption, cutting back on spending in most areas of their lives in order to afford their own apartment. Others face a peripatetic existence in a flexible job market and feel unable to settle down.

Data sourced from The Guardian; additional content by Warc staff