Get Out of Debt, Fast!

Transcript: Radio National interviews Ben Paris from Debt Mediators

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Madeleine Genner: Through the economic boom of the past decade, a young, self confident, technically savvy workforce has emerged, and until now, they’ve been writing their own script.

Woman: They’re out there, thousands of them, millions of them. They have their own language, they have strong economic power, yes, this group I am talking about, is the dreaded Generation Y.

Madeleine Genner: Generation Y, also known as the ‘millennials’ and the ‘echo boomers’ have enjoyed an unlimited demand for their services. A separate industry has sprung up to advise their bosses, the boomers and the Xers, on how to manage them.

Man: Generation Y don’t live to work, they work to live, and you as an employer have two choices; either your work becomes fuel for their life, or you trade an experience so outstanding in a young star, that work literally becomes part of their life.

Man: Kids are now excelling in second life, but they are flunking in first life. And if you didn’t think you had enough of a whack across the side of the head already, there’s Gen Y, demanding to be self-actualised in the workplace today, thank you very much.

Woman: But I call Generation Y like well why? Why do I have to come in that time every morning? Well nobody does anything till ten o’clock. Why?

Madeleine Genner: Workplaces all over the world, and certainly in Australia, have experienced what demographer Bernard Salt has called a power shift.

Bernard Salt: There has been a power shift from the employer to the employee, and Gen Y are running with it. They’re the lucky generation in the lucky country at the lucky time in history.

Madeleine Genner: But the economic party is over, and Generation Y may be far less prepared for the hangover.

Rebecca Huntley: One of the things that we’ve forgotten when we talk about young Australians about how lucky they are, and how spoilt they are, is actually how exposed they are economically in terms of what they actually own, and how much they actually owe.

Madeleine Genner: Hello, I’m Madeleine Genner. This week, Background Briefing explores the rise of Generation Y and asks: Are they ready for the downturn?

Mark: The job that I was just made redundant I was hoping to stay a lot longer and I probably would have stayed a lot longer but there’s simply not enough jobs to go around, whereas six months ago, it was you had job offers, you’d have recruitment companies calling you and saying, ‘There’s this new job’, and it wasn’t looked unfavourably. But I think that’s going to change now. And we’re moving back to 20 years ago where you stayed with a job, it looks good on your resume, you learn, and then maybe you move on.

Madeleine Genner: Twenty-six year old Mark is sitting in a pub waiting for other colleagues from his now former finance company to turn up for redundancy drinks, a scenario which is becoming increasingly frequent.

Mark: I think this will show people that the world is the same. We can’t grow continuously, and things do change. Companies build up excesses and they want you to cut, and it’s the people who I guess remain energetic and remain in industry that will move forward, but obviously there’s going to be a big shock in the 20s and 30s, for those group of people.

Madeleine Genner: Throughout their teenage years and for the duration of their early working lives, the bulk of this generation, born in the 1980s, the children of the Baby Boomers, have been raised on a diet of heightened expectations, and it’s this optimism you hear about constantly from social researchers like Neer Korn.

Neer Korn: They’ve been raised to have a sense of what can you unleash on society. What makes you unique? So their feeling is ‘I’m going to succeed, no matter what’, and you hear that from them constantly across the board, white-collar or blue-collar, educated, uneducated, that they’re going to make their mark on society.

Madeleine Genner: They’re the products of their Boomer parents’ aspirations, and from the time they entered the workforce there’s been an abundance of choice: sustained jobs growth and a constant demand for labour that’s allowed them to move freely between jobs.

And this experience is not limited to western economies. While there are something like 4 million people who make up the Generation Y population in Australia, and 80-million in the USA, there’s a quarter of a billion in China, where economic hyper-growth has opened up opportunities for young Chinese that their parents wouldn’t have imagined/

They’re confident, some say over-confident, in their abilities, and there’s been a generational backlash, led by the boomers. For example, this portrayal on the American ’60 Minutes’ program.

Reporter: They were raised by doting parents who told them they were special. They were laden with trophies just for participating, and they think your business as usual ethic is for the birds, and if you persist in the belief, you can take your job and shove it. The workplace has become a psychological battlefield and the Millennials have the upper hand.

Madeleine Genner: The 60 Minutes treatment of Generation Y, the Millennials — is typical of the backlash that’s become more pointed in the shadow of a recession. Web pages and traditional news pages are hosting an often fierce argument. This is a reading from one correspondent to The Wall Street Journal.

Whitney Watson: We understand better than any generation since the Great Depression that security isn’t guaranteed. We watched 9/11. We are watching the economy collapse. When we seek higher pay or promotions, it’s because we know that, as the youngest employees, we are the easiest to let go. When we appear ‘disloyal’ to a company, it’s because companies are no longer loyal to employees, which is a development that happened on the Boomers watch. Note to Boomers: Not everything we learn from you is something you tell us.

Madeleine Genner: A major difference between this generation and their parents is in their attitude to savings and debt. As much as anything, that’s due to big changes in economic and social circumstances. A long term asset, like a house, was much more affordable for their parents and that affordability encouraged a culture of savings. For the children, house prices are more out of reach and a culture of credit has replaced that culture of saving. Financial deregulation played a role too, unleashing an aggressive competition for customers among credit providers.

Whereas the wages of their parents at the same age were more likely to have gone into the gradual acquisition of assets, the wages of the children are going into fast consumption. Skills trainer Dominic Thurbon offers a simple illustration of that culture shift.

Dominic Thurbon: If they’ve got 25 bucks a week to put away, they don’t have to put it in a bank account and then get the television in two years, they can get the television now and use the money to pay back instead of save. So I think there’s emerged lots of financial tools that have really enabled them to take that kind of instantaneous expectation into the way they conduct purchasing, which has led to the phenomenal levels of debt finance spending amongst Gen Y, particularly consumer debt, obviously.

Madeleine Genner: The consuming habits of Millennials have underpinned economic growth, but as it slows, they may have little to show for it.

As part of her extensive research into The World According to Y, academic and author Rebecca Huntley builds up a profile of a highly skilled but asset poor generation.

Rebecca Huntley: They are probably in their late twenties without significant investments, thinking ‘When my parents die’, or ‘When something will happen to set me up’, and if this economic crisis is serious, deepens and goes on for a long time we’ll have an economically disenfranchised group, highly skilled, but in many ways behind the eightball economically.

Madeleine Genner: Rebecca Huntley.

In the current financial crisis, debt has regained its four-letter-word status, after years of ‘debt-as-a-wealth strategy’ thinking. It’s a dramatic come-down.

Easy credit is becoming a thing of the past, for the time being, and it’s going to take some getting used to.

Dimitri Martin: When you reach a credit limit, get a new car. That car’s never met your other car, it has no idea what that car’s been up to, how irresponsible it’s been.

Jon Stewart: You’re suggesting just going from car to car to accumulate massive debt?

Dimitri Martin: It’s called investing, Jack.

Madeleine Genner: The Millennials’ attitude to credit card spending is sent up on the popular American news satire program, The Daily Show.

Dimitri Martin: What if old people don’t approve?

It doesn’t matter, he nearly does, Visa, Mastercard, Discover. They don’t just approve, they clearproof. Unlike your parents, their love is unconditional.

Jon Stewart: But I’m talking about the downside of the credit cards.

Dimitri Martin: Oh, I know, I know, you have to be responsible, I know that well, OK. Young people, listen up. Protect your credit. No. 1: don’t put your credit card near a magnet, it can erase it. So like, if you are going to buy magnets, use cash. Two: If you’re locked out of your apartment, don’t use your credit card to break in, it’ll damage the card, instead, use the card to buy a new apartment.

Jon Stewart: That’s very true, that actually will run you quite a bit now.

Dimitri Martin: Thanks, Greenspan, check it out. Here’s what you don’t realise. Anyone who owes money is mortal. So if you get into debt, just sit tight, ride it out, because you’re going to die. Poof! no more debt, you’re dead. What are the credit card companies going to do? Sue your kids?

Jon Stewart: That is exactly what they’ll do to me. They will sue your kids.

Dimitri Martin: Well, I don’t have any kids. John.

Jon Stewart: Dimitri Martin everybody. [Applause]

Madeleine Genner: In the current economic context, this is black comedy.

In the US, 125,000 people under the age of 25 go bankrupt every year, many of them brought down by their education costs. It’s a different story here in Australia, where the cost of higher education can be deferred through schemes like HECS, reducing the need for young students to take out big loans. Even so, bankruptcies in the Generation Y age group in Australia have increased by 118% over the last decade.

In Canberra’s outer suburbs, 22-year-old Zoee Zirkler is struggling to dig herself out of a financial hole. It began with a seemingly generous offer from her bank.

Zoee Zirkler: It was my first credit card, and a couple of weeks after my birthday, my 18th birthday and they gave me a credit card, and I thought, ‘Oh yes, you know, I can buy all this stuff, and pay it back later’. I didn’t realise the interest rate and stuff on it, but being young I thought it was fantastic, I thought it was the best thing. And it started with a credit card and then it went to personal loans, it went to a car, it went to two TVs, play station 3, home theatre system, more credit cards. I’ve had the full scope of finance and debt, pretty much.

Madeleine Genner: Over a period of four years, Zoee racked up $70,000 worth of debt.

Generation Y don’t have more debt than other Australians, their Boomer parents set the standard there, but they are getting into debt in large numbers at a younger age. It is overwhelmingly consumer debt and they’re borrowing like never before.

Just as the Boomers and Generation X did before them, Generation Y are out to experience life. The difference is, they’re more willing to go into debt to do it.

Rebecca Huntley again.

Rebecca Huntley: You’re in the workforce, you’ve got money, you might be living with your parents, you might not, and suddenly you have a bulk of disposable income and your aspirations reflect that, so your aspirations are to work, enjoy life, save to travel, come back with a debt, live with your parents, pay off the debt, that kind of thing. So it means that those twenties are all about experiencing life.

Madeleine Genner: And Rebecca Huntley says this generation has learnt an important lesson from their predecessors, which has given young women in particular an added sense of urgency.

Rebecca Huntley: I think the one difference though for this generation, let’s say the on distinction between this generation and Generation X, is that for the young women that I talk to, they realise that they’d need to start getting serious around 30 about having children, because they’ve had the lesson of Generation X-ers declining fertility and realising in their 30s that perhaps they’ve left it too late. So that means a lot of fun and a lot of experience needs to be kind of crammed into the 20s and it reflects spending priorities.

Madeleine Genner: Rebecca Huntley, author of The World According to Y.

In Canberra, Zoee’s spending spree has meant that she can’t have lots of those experiences. When she got into the debt she was only earning $35,000 a year. Her debt quickly reached the equivalent of two years of her salary, and the repayments outweighed her pay packet.

Zoee Zirkler: At that moment that I realise how much I did have to pay back I sort of just watched my dreams of travelling and buying my own home pretty much slip back until I’m 30 or 40. I’ve got my best friend who’s been to America twice and she keeps asking me every time she goes, ‘Come with me, come with me’, and I’m like ‘Well I’d love to, but I just can’t. I don’t have the money to go.’ And I just look at her and go, ‘Well, I should be coming off to America with my best friend and having a good time, and exploring the world, but I did the wrong thing.

Madeleine Genner: I mean at that point, it must have been really hard, what did it feel like when you realised that you had all this debt and that you were going to spend a large number of years paying it back?

Zoee Zirkler: I was devastated. I was angry. I was disappointed in myself. I did get a point where I thought, you know, just to be able to make that extra money to be able to make the extra repayments that for a few night a week or something I would go and be a stripper just to be able to earn the money to pay it back and be able to live still. I got close quite a few times to packing a bag and going, getting ready to leave the door, but then I sort of stopped and thought about my friends and I thought about my Mum and my Mum was the biggest pull back that stopped me walking out the door most nights.

Madeleine Genner: Do you think the lenders are a little at fault here as well for offering so much credit so someone when they’re so young?

Zoee Zirkler: Yes, I do. I do think because all the networks are all connected, and they can see how much I’ve borrowed already, and they have a full scope on my credit history, but they just kept giving it. Every time I applied, they’d say, ‘Yes, OK, here. Here’s another 10-grand, here’s another 10 grand.’ And I just kept going and going, and I finally, I’m the one that’s had to say Well that’s enough, I’m stopping. That’s it.

Madeleine Genner: You mentioned that you didn’t know beforehand about the interest rates. I mean do people need to be taught that stuff earlier, so that this kind of thing doesn’t happen?

Zoee Zirkler: Yes, definitely. Definitely for young people need to be taught this right from the beginning. They need to learn how the whole finance and the whole credit line works, and how the whole interest rate works. Like if you don’t pay off $500 of credit in that month, then you get charged anywhere up to 29% of 500 bucks again. So then you could be left with a bill that was only $500, but it might end up being $1500 because you’ve paid so much interest back.

Madeleine Genner: And is that where a lot of your debt came from, just simply the interest kept racking up and racking up?

Zoee Zirkler: Yes. Yes, because I thought, Oh, it’s just the minimum monthly payment, I can pay it, it’s cool, you know. If I have a bit of extra money, I’ll put some extra money on it. But what I didn’t realise is whatever was left, was getting charged that 20-odd percent interest rate. So then my bill was going up and up and up again, and I just went Oh my God, like it just never felt like I was getting anywhere, and I didn’t know how it worked until I sort of – so one of my friends sat me down and said, Look, this is how it’s working, this is where you’re getting into trouble. And that was sort of around the time that I really hit rock bottom and saw that things had to change.

Madeleine Genner: Twenty-two year old Zoee Zirkler sought the help of Debt Mediators Australia, which acts as a mediator between creditors and consumers. They get about 8,000 calls a year from people in their late teens and twenties, a disproportionately large number, and by the time people call, they’re generally in about $30,000 worth of debt, usually racked up with credit cards and personal loans.

Debt Agreement Administrator Ben Paris from Debt Mediators

Ben Paris – Debt Mediators

Ben Paris is a debt counsellor at Debt Mediators Australia. At 26, he says he’s worried about the financial illiteracy of his age group.

Ben Paris: It’s just a habit that once you get into this long term period of prosperity, you think the boom times are never going to end, and it’s a habit that you tend to expand to the maximum amount of credit you can take on. So you throw into account this unprecedented economic boom with an incredible amount of optimism and you’ve really got a perfect storm in terms of debt.

Madeleine Genner: Ben Paris believes it will take a recession to change these spending habits.

Ben Paris: It’s unfortunate that it needs to be tragedy, but hopefully this will provide a really strong learning environment for them to see the negative consequences of being in so much debt, you know, the fact that you are so susceptible to international financial problems, that things like the international credit market can actually have a real impact on your lifestyle, and your long-term prospects. So hopefully people will take away from that some valuable lessons, but some part of me says they probably won’t.

Madeleine Genner: Debt counsellor Ben Paris.

Of course, debt isn’t a new problem and in no way is it unique to people under 30. But this generation has been introduced to debt at a younger age. A range of studies suggest that the average 20-something has $2,000 worth of consumer debt. While it’s not a large amount, it is significant in terms of their incomes and their financial literacy.

[School bell…roll call]

Madeleine Genner: At Burwood Girls High School in Sydney, Year 11 students are participating in a workshop about spending, saving and investing. It’s an initiative of the Commonwealth Bank Foundation, a non-profit arm of the Commonwealth Bank, and it’s designed to improve financial literacy. This workshop is being run by Jonathan Henderson.

Jonathan Henderson: Right. So girls, the first thing I want to do, I just want to talk about what we actually spend our money on. So, what are you spending money on? Work, OK. Make-up. What else? Petrol. Am I safe to put shoes up here as well? Shoes. What else? Anyone else? Going out. What about phones and credit stuff?

Madeleine Genner: The students in this class are 16 or 17 years old. More than half of them have part time jobs, and not surprisingly, they all have phones. The mobile phone has revolutionised communication and it’s changed the way young Australians are introduced to credit and debt.

Jonathan Henderson: So has anyone actually got like a mobile phone story for me at all. Has anyone had a big bill recently? How much was it, Grace? $600. Who are you guys calling?

Madeleine Genner: There are about 30 students in this classroom, and as we just heard, there’s a student with a $600 monthly bill. Later, another student admitted she had a $900 bill, and these kinds of bills are not out of the ordinary for Australian high school students.

A group called The Centre for Skills Development run these courses on behalf of the Commonwealth Bank Foundation.

Dominic Thurbon is the managing director of the Centre for Skills Development. He was visiting Burwood Girls High School to see how the class was going, and he told me that these students have a completely different attitude to debt, because of the financial options available to them.

Dominic Thurbon: I think they are mischaracterised as being financially illiterate in comparison to other generations. I mean the reality is that X-ers and Boomers simply didn’t have access to the types of financial situations. They weren’t in the financial situations the Gen Y found themselves in. X-ers and Boomers didn’t have mobile phone contracts, when they were 18 and they didn’t navigate through the kind of credit traps in that way because that environment didn’t exist. So I think it’s tempting to go, ‘Oh, Gen Y, like you know they’re financially illiterate’ or something, and I think that’s true, but not because they’re like dumber than any other generation but I think that it’s more of a problem now for Gen Y because of the environment they find themselves in.

Madeleine Genner: Over the last couple of years, the Commonwealth Bank Foundation has been involved in a national survey, known as the Australian Financial Literacy Assessment. It found that close to 50% of young people can’t identify the difference between credit and debit. Dominic Thurbon again.

Dominic Thurbon: And when you carry $2,000 worth of debt, that’s hugely problematic, and that’s why 10% of the default population last year was 15-22 year olds, you know, and it wasn’t people who went out and bought televisions and all that sort of thing, that’s 60% of the defaults are for values of less than $400, like this is three or four $60, $70 phone bills in a row where kids don’t understand the implications of not paying it off, leading to huge problems. So yes, I think financial illiteracy is peculiarly important for Gen Y.

Madeleine Genner: This question of financial literacy will be critical in the worsening economic climate.

A new British study by the Chartered Insurance Institute and independent think-tank, Reform, predicts that Brits under the age of 34 will be hardest hit by a recession.

They refer to this age group as the IPODSs, a cute cultural reference that stands for ‘Insecure, Pressurised, Overtaxed and Deb-ridden’. They argue that unless financial services engage with them, the UK faces the possibility of a whole generation living in post-retirement poverty. Here’s a reading from the report.

Reader: The paradox of the IPODs is that they are a generation, which on the one hand is using financial services with greater intensity but on the other hand using them with less knowledge and confidence.

On a personal level, IPODs are an extremely confident generation. Yet when it comes to money there’s a huge sense of uncertainty and trepidation. Fear of revealing their lack of understanding prevents many young people from even attempting to get financial advice.

[Music: ‘My Generation’, The Who…]

Madeleine Genner: It’s been a long time since The Who were talking about their generation. There’s always been friction between the generations, and that signature tune, ‘My Generation’ is now 43 years old.

In the workplace, young people complain of being undervalued and exploited, and older workers complain that their younger colleagues have it easier than they did.

In recent times, Gen Y bashing has become an international sport.

Woman: Generation Y’s got a lot of power and they feel very comfortable saying ‘I’m not doing the copy machine job, that’s nothing to me, I’m not paying dues’, and this is very frustrating to almost everyone who has climbed the ladder, because once you climb the ladder you want someone else to be climbing, otherwise what are you doing on top, right?

Madeleine Genner: They’re widely regarded as hard workers, but they’ve also got a reputation for being hard to manage. Some believe that Generation Y employees need to experience an economic downtown.

Jason Cartwright: A number of commentators have said that this is the long awaited Gen Y correction, or I heard one commentator say the other day that for Generation Y, this is the recession they had to have.

Madeleine Genner: That’s Jason Cartwright, head of the international arm of Link Recruitment.

Jason Cartwright: A lot of people are saying that there probably needed to be bit of a reality check in recruitment markets in the same way often some commentators say that property markets and stock markets need a correction, the employment market probably did in some respects. We were certainly seeing some unrealistic expectations of job seekers coming into the employment conversations and I think a bit of a reality check for the Generation Y job seeker was certainly required.

Madeleine Genner: As this age group has matured, an industry of Generation Y gurus has emerged, offering to help employers manage their young workers.

It’s estimated that the average Gen Y employee will change jobs every two years, and the turnover of staff is costing business a fortune. As Australian Gen Y guru, Anders Sorman-Nilson, explains in this presentation on youtube:

Anders Sorman-Nilson: In the legal industry, they’re having huge attrition rates at the moment. Turnover for Gen Y of up to 80%. Firm wide around 40%. Now for every lawyer that departs the firm, the cost to the firm is between 100% to 250% of the departing lawyer’s salary. So this is real bottom line stuff.

Madeleine Genner: Last year, a national study of employer attitudes found that most had a negative view of Generation Y. Many business have spent thousands in an effort to understand and accommodate their young employees, and were flabbergasted by their sense of entitlement, expressed from Day one.

It’s a view echoed by Jason Cartwright of Link Recruitment. He says he’s often been amazed by the expectations of Generation Y job hunters coming through his office.

Jason Cartwright: So expectations of their manager and expectations of what the employer was going to offer, and our research shows that that differs markedly from the baby boomers where a job was an entitlement, you know, you were lucky to have it, whereas Generation Y came at it from a very different perspective, in that what can this employer offer me? This was a generation that had been sold to their entire lives, and so expected their employer to sell back to them, the whole sort of ‘What’s in it for me?’ concept.

Madeleine Genner: Jason Cartwright, of Link Recruitment.

One very vocal supporter of Generation Y, and their values, is the prominent social researcher, Hugh Mackay. He disputes the view that Gen Y are over-confident and lacking in any experience of hard economic times.

Hugh Mackay: First of all let’s remember that the members of this generation were fully conscious, the oldest of them quite advanced adolescents, during the deep recession of the early ’90s. So they saw their parents suffer, and they learned some very important lessons from that. They learned from the rising levels of unemployment, rising interest rates, they learned, so many of them, seeing one or both parents retrenched, or feeling insecure. They learned that one thing you’d better not do is make too much commitment to an employer because if you’re too loyal, you could be the one that just gets turfed out. Don’t expect loyalty when times turn tough.

So it’s not as though they haven’t experienced the pain of a deep recession, they have. But of course, they’re young, and they are keeping their options open, and another characteristic of them as a generation is they’re intensely tribal. They’re really mutually supportive, more so I think than any generation we’ve seen in modern Australian history. So they’re terrific supporters of each other. And if one of them is in trouble, the others are likely to be. They create their own surrogate extended families.

They’ve been a terrific example to the rest of us about how to get your priorities right, and about how to live in a kaleidoscopic world. Keep your options open, hang loose, wait and see, and rely on your close friendship circles to support you through the turbulence; these are pretty good lessons, and they’ll be putting them into practice if times do get even tougher than they are now.

Madeleine Genner: Social researcher, Hugh Mackay.

In the Sydney suburb of Rockdale, 25-year-old Steph Lee is clearing out the office where she has worked for the last two years as a sales rep for a local newspaper.

A few months ago, Steph Lee decided to leave her job. The plan: to quit work, head to Japan for a couple of weeks, come back, do a bit of easy casual work, save some cash, and then embark on a bit round-the-world trip.

Her plan was created before the economic situation began to deteriorate. The dollar was at a record high, and temping work was easy to find. When she actually got around to quitting her job, she didn’t think about how the economic crisis could affect her. Now that’s all changed.

Steph Lee: I’m struggling to think what I’m going to do when I come back from all my trips, like I’m doing a couple of trips. I have no idea if I’m going to get work straight away or how long I will be unemployed for, and how much into my savings it will cut into.

Madeleine Genner: Did you kind of presume it would be easy to get temping work?

Steph Lee: I did, but after I went and visited a temping agency I soon discovered that I don’t think it’s going to be as easy as everyone says it would be.

Madeleine Genner: What are the temping agencies telling you?

Steph Lee: Basically that especially during this Christmas period, people are sort of using their own staff to cover for anyone that’s going away, which is what they’re doing with my position at the moment. They’re just using their own staff, they’re not going to hire until next year, they’ve told me. So, yes.

Madeleine Genner: What kind of work were you looking for?

Steph Lee: Just admin, anything, I don’t really care, just as long as I get money, that’s all I care about right now.

Madeleine Genner: If times get really tough, Steph knows she has an emergency safety net, otherwise known as Mum and Dad.

This generation are much more likely to live with their parents. In fact data from the last census states that the number of 20somethings living at home has increased by 300% over the last 20 years.

They are the so-called ‘kippers’ which stands for ‘Kids In Parents’ Pockets Eroding Retirement Savings’. And Steph Lee is a kipper.

Steph Lee: I don’t pay rent at home, I don’t really have much to pay for. That way I’ve been able to save a lot for my trips and so they’re happy to help me out in that way and I guess I’m lucky, compared to my friends who are going travelling with me, their parents aren’t as helpful.

Madeleine Genner: And your parents are pretty cool about the fact that you don’t have to pay rent and those kind of things, even though you’re earning a wage?

Steph Lee: They’d prefer that I save my money. Originally it was to go towards buying a house, but then I eventually told them, ‘Nope, I want to travel’. So it took them a while to get used to that, but they said, ‘Look, it’s something that you need to do so go travel, and then buy a house when you get back.’

Madeleine Genner: If this crisis gets worse, many young adults will fall back on their parents.

The parents here, generally speaking, are Baby Boomers. In fact, some call Gen Y ‘Echo Boomers’ because their optimism, if not their values, echoes those of their parents.

Michael Grose is author of XYZ: The New Rules of Generational Warfare. He’s also a father to three Generation Y children.

Michael Grose: I’m a Baby Boomer, and it was a job for life for me, and I lived very much a linear life, and this group don’t have the job for life and they won’t live that linear life. It will be more a zig zag around and I think that kids by the time they’re about 28, have changed courses or jobs around about three times in Australia, and I’ve seen with my own kids who are 24, 20 and 22, and they’re on track. I’ve had — two of them have changed their university courses and one’s changed jobs a couple of times, so I’m thinking, they’re on track.

Madeleine Genner: Michael Grose says Generation Y have simply had so many opportunities and their parents have encouraged them.

Michael Grose: When I finished school as an 18-year-old, I remember asking my Dad for advice, and I got into teaching and I also got into journalism, and his advice reflected a man of his time who came through the Depression and he basically said, ‘Take the safe option’, so I went down the teaching track and I’d finished my course at 21 and I was married at 24, and first child at 25, and off I went on my linear life, which was a job for life in many ways.

And my youngest daughter a couple of years ago at the age of 18, exactly the same age, she finished her secondary schooling and she took a gap year and she came to me for advice and her one question wasn’t ‘Which job should I do?’ it was ‘Which country should I go to first?’ And my response was typical of a man of his times which I guess was, ‘Darling, I don’t really care, as long as I don’t have to fund it.’

Madeleine Genner: Author, Michael Grose.

Generation Y have seen international travel as a priority, and as with those that have gone before them, many have stayed on to work and see the world.

For one 29-year-old expat who lives in London, everything was going to plan until recently. Michael used to work for a hedge fund but two months ago he was retrenched. He doesn’t want to use his last name because he is currently trying to find a new job. And Michael describes how quickly the jobs environment has changed in London.

Michael: When I moved over here four and a half years ago, times were really good; there were so many opportunities in the City and in London, and it was very easy to walk into a job, and it was very easy also to climb up the ladder in terms of roles and in terms of pay.

Madeleine Genner: You lost your job a couple of months ago. What’s the climate like now?

Michael: It’s a completely different time to 2004, I’ve got to tell you that. It’s tough, there is a lot of people out of work and there’s also a lot of people in work who don’t obviously feel secure in their jobs any more. Almost everyone I know that works at a financial institution, that institution has been subject to some sort of bailout or large loss and that’s ultimately going to have ramifications in terms of head-count reductions. There’s not a lot on the advertised jobs front, and piles and piles of CVs. Recruitment agents have told me that they’ve just got deskloads full of CVs at the moment, and not many clients looking to hire.

Madeleine Genner: Michael says he’ll stay in London for a few more months. If he can’t find work by then, he’ll have to consider coming home, and he’s not alone. Figures from the Australian Immigration Department show that about 3,000 Australians are leaving the UK every month at the moment, double the number that were leaving a decade ago.

By and large, Australians are yet to feel the pinch of higher unemployment, and there’s considerable disagreement about how much Australia will feel the global recession. But you’d be hard-pressed to find a rosy prediction at the moment.

The federal government expects that unemployment will rise to 5.75% over the next 18 months, and some economists believe it could reach 9%.

Background Briefing has spoken to a range of young people working in different industries; at construction sites and architecture firms, at child care centres and finance companies. There is optimism and trepidation about what may lie ahead. Generation Y know that as the last workers hired, they may also be the first to be fired.

At university campuses around the country, the teaching year is coming to an end. It’s a nervous time for students as they complete their final exams, but thousands of graduates are also preparing to start job hunting.

Rob Hearn is getting to the end of a business degree. He feels luckier than most, he’s got a summer internship, followed by another six months of study. It’s a start, but he’s worried about what the next few years might hold.

Rob Hearn: Three years ago when we did a business degree it was kind of, the cheque was already signed I guess. There was always going to be a job there, and there still are in a few industries. I applied for about, maybe 20. And even this one which I got, which was the last one, they actually rang up and said I didn’t get it. And then two weeks after they said, they rang back and said I got the job, so I was pretty over the moon. But that’s only a summer internship, it’s only two and a half months of work, it’s like 10 weeks, so I can’t really say I’ve really got a job at the moment, can I?

Madeleine Genner: Some career options are seen as more vulnerable right now. Architecture graduates can’t find jobs, and tourism students are also struggling. Kathleen Connolly is a 20-year-old finishing her tourism degree and, like Michael and Rob, she’s observed a major shift in the job market in a short period of time.

Kathleen Connolly: Previously, say about a year ago when for us, especially in the tourism industry, where it was an employees market, you could just chop and change. Now it’s really starting to go where employers are just looking for that one special candidate. There’s a lot of contract work at the moment, and so no-one’s really looking for full time, and so you might do six months here, six months there, but as well as that the benefits don’t come with it, and in the industry at the moment, it’s looking quite sparse.

Madeleine Genner: Does it worry you about the idea of having to go into potentially doing contract work and bits and pieces for a while?

Kathleen Connolly: At the moment I’m 20, so looking for a real long-term career with one company’s not what my future entails at the moment. So maybe in a couple more years, and I presume the job market is still going to be quite stagnant, that’s when I’ll really start to worry. But at the moment, I’m not that concerned with contract work and part-time and casual, just enough to kind of get me travelling I suppose.

Madeleine Genner: Mark, who we heard earlier, has just been made redundant by his city finance company, along with 300 others. Mark is optimistic but acknowledges that redundancy affects people in different ways.

Mark: I think everybody’s very stressed, and even for the people who still have their jobs, they’re still kind of, you know, they’re a bit worried, but I think some people, when they get redundancy, they become very isolated and they get really down, and I think that’s portrayed in their personality, and when they’ve got interviews that can be a difficult thing. So I think that’s why some people do need some time off, and they need to kind of clear their head, and then maybe go into interviews. And there’s another group of people who find this happens, Let’s move on.

Madeleine Genner: Many young workers that Background Briefing spoke to said they expected to be able to fall back on a job in retail or hospitality if times get really tough. But the reality is, those sectors may be among the hardest hit.

At shopping centres around the country, the Christmas carols are playing, and the shops are gearing up for a big Christmas spend.

Retail recruiters however, tell a different story. Despite the Federal government’s $10 billion stimulus plan, most retailers have put a complete freeze on permanent recruitment.

Even so, optimism remains, and far from accepting that they may become the victims of a downturn, many young people believe they can play a key role in solving the economic crisis.

Generation Y have their entire work life in front of them, and the Baby Boomers need them to succeed, if they’re going to retire comfortably.

For many of the Y Generation, the criticisms of the Boomers, their parents, comes across as hypocrisy. They have been told that they can do anything, and that they should keep their options open, and now they’re being criticised for doing so.

Last month, Ron Alsop, an author and senior writer at The Wall Street Journal, wrote about Gen Y in the workplace. He calls the generation the Millenials and here’s a reading of what he had to say.

Reader: This generation was treated so delicately that many schoolteachers stopped grading papers and tests in harsh-looking red ink. Some managers have seen Millennials break down in tears after a negative performance review and even quit their jobs.

Millennials also want things spelled out clearly. It may seem obvious that employees should show up on time, limit lunchtime to an h our and turn off cell phones during meetings. But those basics aren’t necessarily apparent to many Millennials.

Although they have high expectations about what their employers should provide them, companies shouldn’t expect much loyalty in return. If a job doesn’t prove fulfilling, Millennials will forsake it in a flash.

These workplace nomads don’t see any stigma in listing three jobs in a single year on their resumes. They are quite confident about landing yet another job, even if it will take longer in this dismal economy.

Madeleine Genner: Ron Alsop’s article prompted a heated response from Whitney Watson, a Gen Y-er from Chicago.

Reader: I take offence at Ron Alsop’s patronising profile of the Millennial Generation. The so-called ‘negative’ traits he describes are the very traits that will help the Millennials succeed. We embody these traits not because we believe we’re better than others but because of lessons learned from our times, and because of the failures of the Baby Boomers and Generation X.

We understand better than any generation since the Great Depression that security isn’t guaranteed. We watched 9/11, and we’re watching the economy collapse.

When we seek higher pay or promotions, it’s because we know that as the youngest employees, we are the easiest to let go. When we appear ‘disloyal’ to a company it’s because companies are no longer loyal to employees, which is a development that happened on the Boomers’ watch. We also understand the impact work has on family life. When we want flexible work schedules and vacation, it’s because we are unwilling to make the same mistakes as our Boomer parents.

Our mothers sought professional fulfilment, and we became latch-key kids. Many of our parents got divorced. Note to Boomers: Not everything we learn from you is something you tell us.

Madeleine Genner: Whitney Watson was born in 1981, and as a typical Gen Y-er, she was easy enough to track down via social networking site, Facebook. She told Background Briefing that her letter reflected her concern that young workers would be hard hit by the recession.

Whitney Watson: I mean just among my own friends, many of whom work on Wall Street for a lot of these big companies, and these people are in their late 20s but they’re the lowest on the totem pole and they’re the easiest to let go, so people are definitely worried. I have one friend who works at a big bank and everybody in his department below him was fired, so he of course is worried that he’ll be the next. So yes. I mean I’d say the mood is pretty worried amongst Generation Y.

Madeleine Genner: On the other hand, Whitney is certain that Generation Y can be a driving force in a return to good economic times.

Whitney Watson: I think we are, because we’re creative thinkers, we’re out of the box thinkers, we’re innovative, those are just traits we’ve developed using computers, the type of education system we grew up in, and that will allow us to move beyond having such structured hierarchies that maybe only benefit the people at the top, as we’re seeing often in a lot of these big corporations. I think we can bring a lot to the table in terms of working more independently maybe at smaller companies, fulfilling needs within, you know, more niche markets instead of these huge conglomerations. So yes, I think Generation Y can really get us out of this mess in terms of, we question the old ways of doing things, which as we’re seeing now are not necessarily the best ways of doing things.

Madeleine Genner: Twenty-seven-year-old Whitney Watson.

Whitney’s view is shared by Kirk Snyder, who teaches business leadership at the Marshall School of Business at the University of Southern California. Kirk is one of the few talking about the positive role that Millennials can play in finding economic solutions. He believes younger workers, who are Google-savvy, are knowledgeable in a completely different way.

Kirk Snyder: This generation comes to the workplace with such knowledge that workers in the past, it would take five years to get to that place. So in other words they know so much about the industry, so much about the companies, even the CEOs, the competition, the very people that run the organisation, their personal lives and that empowers an employee to feel that they can contribute from day one. Gen Y believes that from the very minute they come into an organisation that they are fully prepared to contribute and be heard in that organisation. And I think it’s a misdiagnosis to say that it’s arrogance, it isn’t.

Madeleine Genner: Kirk Snyder, at the University of Southern California.

Optimism or pessimism aside, if the current dire economic predictions play out, social researcher Neer Korn is convinced there’ll be a marked change in the attitudes of Generation Y.

Neer Korn: We’re going to see some new status symbols emerge, so instead of filling our CVs with different experiences and travel being seen as this great investment, what we’ll see is more secure areas becoming status symbols. So being in a job for three years is something people spoke about as ‘Hold on, that could be a sign of me doing well’, owning your own home instead of renting, and waiting to do that in your late 20s, early 30s, that’s a sign of a status symbol. And even having long-term relationships. So things that are secure and embedded in longevity will start to become status symbols, as will not having a debt. Because at the moment, many young people have a credit card debt because they’re so optimistic, ‘Of course I’ll have the money to pay for it later’, so we’re seeing a trickle of thought among the early ones thinking, ‘Well hold on, maybe there’s something more responsible out there. And if the economy continues in a downturn and there’s not the opportunities there, this will become the regular trend and way of thinking amongst young people.

Madeleine Genner: Background Briefing’s co-ordinating producer is Linda McGinness. Technical production by Mark Don. Research, Anna Whitfeld. Executive producer is Chris Bullock, and I’m Madeleine Genner.