Millennials – people born between 1980 and the late 1990s – are now the largest segment of our national workforce. Within a few short years, they will be more than three quarters of all workers. This makes it essential that our region be attractive to them.
Last week, American University’s Kogod School of Business released its newest Millennial Index. The index helps us move our discussion of millennials away from clichés to a conversation based upon objective data. Far from being a generation that is motivated by trendy restaurants and bike trails, the index gives us a picture of millennials as an age group looking for jobs that offer high salaries and career progression while living in communities that provide affordable housing and to some lesser extent other lifestyle amenities.
This picture of millennial aspirations should get our attention, particularly as our region competes to attract Amazon HQ2 and other technology employers. When asked to rank the most important factors they use to evaluate where to live, millennials rank jobs as most important (40 percent), affordability as next important (24 percent), followed by career and education options (18 percent), amenities (10 percent) and people (8 percent). This ranking shows clearly that millennials will be less likely to stay here because of people or amenities, if there are better economic opportunities or cheaper living elsewhere. This is a group that will vote with its feet and move away or never come at all.
Indeed, we are seeing some voting against our region right now. In the aftermath of the Great Recession, our region benefited as its economic stability attracted millennials. But in 2017, our region saw a 0.2 percent drop in millennial residents, despite a 1.5 percent increase nationwide.
What will attach millennials to our region for the long term? The Millennial Index suggests that financial security is a large driver. For millennials who are high earners, this region has become their permanent home. They own homes, have children, and are satisfied with their lives and with life in our region. Simply put, their career ambitions are satisfied, and they can benefit from the positive amenities of our region because they can afford them.
However, many millennials don’t have high paying jobs. For them, this region is becoming less and less desirable. The high expenses of life in our region cause many of them to live paycheck to paycheck. And for a good portion of them, getting a better education to find a better job may not solve the problem. Or, indeed, getting that education might be the problem.
This is because millennials as a group face a challenge that prior generations have not: the prohibitive cost of obtaining higher education. Gabrielle Bosché, a national expert on millennial behavior, points to student debt as the major challenge for her generation, describing it as creating financial instability that “cripples my generation’s investing power.”
Jennifer Ives, a seasoned executive and workforce development expert, echoes this view. She notes that particularly for millennials who haven’t gotten high-paying jobs, our region is “too expensive (with their loans) so they prefer second and third tier cities with interesting jobs.”
Stephen S. Fuller, founder of research institute at George Mason University’s Schar School of Policy and Government, has for years been urging us to recognize that our region’s job growth lags that of competing regions. Moreover, the jobs we are creating are not high-paying jobs. Combining his insights with the Millennial Index yields a disturbing picture: our largest workforce demographic is motivated more by financial security than by attachment to people and surroundings, at a time when other regions may have cheaper living costs and offer comparable (or better) economic opportunities.
We pride ourselves as a place that has many world-class universities and community colleges and point to our highly educated workforce as a distinguishing reason why employers should locate here, and new businesses will grow. But, if we don’t work to lower the costs of education, or otherwise help students with crushing debt burdens resulting from developing the skills our economy needs, I fear that our region will lose out to places where millennials can better manage their debt burdens as they pursue their careers.
As we talk in our region about offering economic incentives to attract new employers, shouldn’t we also be looking to apply some of those incentives to solve the problem of student debt