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More than 60% of millennials don’t negotiate salary when receiving their first job offers. It's costing them big time over the course of their careers.
When millennials land job offers, it seems the only question they’re debating is whether to accept. But they should also be thinking about the terms of that acceptance, since there’s a good chance they’re being offered less than they deserve.
Maybe it is because we are just grateful to get any job offer, or maybe we feel we don’t have enough leverage to make a strong case, but only 38% of millennials negotiate their first salary, according to a new survey from NerdWallet and Looksharp, a company that helps connect graduates with jobs.
That unwillingness to haggle and ask for more is costing us thousands of dollars a year. Three-quarters of employers said they could raise starting salary offers by 5% to 10% during negotiations, according to the survey, which collected responses from 700 employers and almost 8,000 recent grads who entered the job market between 2012 and 2015.
There appears to be little risk in asking for a modest pay bump. Of the grads who did ask for a salary increase, 80% were at least partially successful. The vast majority of hiring managers—90%— said they had never retracted an offer because an entry-level candidate attempted to negotiate. Rather, 76% said candidates who negotiated appeared more confident for doing so.
Successfully negotiating that initial pay raise can also lead to a major increase in your lifetime earnings. A report from the New York Federal Reserve released earlier this year found that lifetime earnings are determined in your 20s, since the bulk of earnings growth happens during your first decade of work. The report, which studied the career paths of 5 million workers over 40 years, found that the average worker’s salary growth stagnates after the first 10 years, and only the wealthiest workers continue to see meaningful increases throughout their careers. That’s why your initial salary might be the most important of your career.
Of course, it isn’t just salary that young workers can negotiate when an offer is on the table. The survey found that of grads who asked for changes to other benefits, many successfully altered the terms of their work schedule (75%), paid time off (62%), bonuses (58%), and stock options (38%).
For help boosting your own chances of a successful negotiation—and to avoid missing out on more than $100,000 in lifetime earnings, according to Nerdwallet—see our Ultimate Millennial’s Guide to Negotiating Salary.
As student debt has exploded, young consumers are taking out fewer mortgages and auto loans. But are student loans really to blame?
There’s a familiar narrative that the burden of student loans is forcing young borrowers out of the auto and housing markets, crippling their ability to take the same financial steps into adulthood as previous generations.
Think again. A new study from TransUnion says that fears about how much student loan obligations are hindering young borrowers are overblown.
The study looked at consumers aged 18 to 29 who had student loans alongside those who did not, grouped by age and credit score, then tracked their performance on other types of loans in the two years after they started paying off their student debt.
The bottom line: While student loans are way up since the end of the recession, the study found no evidence that such loans are causing young adults to stop opening credit cards, buying new cars, or applying for mortgages. Sure, today’s millennials are doing less of all three than 20- to 29-year-olds did a decade ago—but that’s true whether they’re paying off student loans or not.
According to TransUnion data, the percentage of consumers in their 20s with student debt has jumped from 32% in 2005 to 52% in 2014. The share of student loans in relation to other debt held by young consumers has skyrocketed, too, increasing from 12.9% to 36.8% over the past decade. At the same time, their share of mortgage debt dropped from 63.2% to 42.9%.
But current conventional wisdom about the ripple effect of student debt on other types of borrowing is correlation, not causation, says Charlie Wise, vice president of TransUnion’s Innovative Solutions Group and co-author of the study.
“What we’re trying to do here is cut through the hype and say, ‘what’s the reality?’” Wise says.
The study tracked groups entering repayment at three different times—2005, 2009, and 2012—in an attempt to determine whether performance differed before the recession, immediately following the recession, and more recently as the economy has recovered.
In 2005, a smaller percentage of consumers with student debt had auto loans or mortgages relative to their peers without student loans. But after two years the gap narrowed, and in the case of auto loans, disappeared.
A similar pattern exists for the 2009 and 2012 groups, suggesting that borrowing trends in which individuals with student debt catch up to their peers over a period of a few years have remained steady.
So if student loan debt isn’t causing mortgage and auto loan participation to drop, what is?
Wise points out that about 50% of people aged 18 to 29 have credit scores that qualify them as nonprime borrowers—a percentage that has also held steady since 2005. What has changed, he says, is lending standards, which became stricter in the aftermath of the recession.
The study also shows that young consumers with student debt actually performed slightly better on their new accounts than their peers without student loans.
For example, consumers who started repaying their student loans at the end of 2012 had a 60-day delinquency rate on new auto loans that was 15% lower by the end of 2014 than their peers without a student loan.
The report counters research from a year ago by the Federal Reserve Bank of New York that found home ownership rates dropped more quickly among people aged 27 to 30 who had student debts compared with those who didn’t.
But TransUnion’s findings don’t come entirely out of the blue. A recent Wall Street Journal analysis of data from LoanDepot.com found that loan applicants with student loans aren’t any more likely than those without debt to be turned down for first-time home loans.
And some economists, such as Beth Akers, a fellow at Brookings Institute’s Brown Center of Education Policy, have pointed out that lower participation in the housing market among individuals with student debt is within the historical norm.
Akers says TransUnion’s report that student debt isn’t dooming young borrowers isn’t particularly surprising. “Given the fact that financial returns on investment for higher education are positive and large, the notion that debt is harmful to students is a little puzzling,” she says.
Getting clear answers to the question of how debt affects individuals is challenging, though.
Akers points out that you can’t randomly assign debt to people, and since there are significant differences between the backgrounds and demographics of households with student debt and those without, you can’t expect their behaviors around buying homes or cars to be the same.
Student loan debt may not be overburdening young consumers on a macroeconomic level, she says, but what’s still unknown is the emotional and social cost of carrying such debt.
TransUnion’s Wise describes the study’s findings as encouraging news. For soon-to-be college graduates, there’s evidence that they can stay above water with their loans, and for lenders, there are “credit hungry” millennials who are able to keep up with payments.
Wise’s major takeaway for both groups: don’t despair.
More on Managing Student Debt:
This might make you lose hope entirely
Retire at 65? Yeah, right.
Multiple surveys reveal that Americans are getting increasingly jaded about their prospects for enjoying a relaxing retirement, so much so that many are throwing in the towel and not even bothering to plan for it at all.
According to a survey of 2,000 Americans conducted for Allianz Life, 84% of them characterize the idea of a retirement where they can do what they want as a “fantasy.”
A second study, this one from the TransAmerica Center for Retirement Studies, also finds that one in five Americans thinks they’ll have to keep punching the clock until they literally can’t work anymore, and 37% expect wages earned from working to be part of their “retirement” income. More than 80% of workers who have already hit the 60-year milestone expect to work past 65, already are or don’t plan to retire at all.
“Retirement has become a transition,” Catherine Collinson, president of the TransAmerica Center, said in a statement.
About two-thirds of Gen X’ers and half of Baby Boomers responding to the Allianz survey think the amount they’re expected to save will be impossible to reach.
Of the two groups, Generation X is the more cynical by far, even though they’re the ones with more time to plan for their retirements. (They’re also the group likely to have higher expenses, though, with obligations like mortgages like kids’ college funds and mortgages that aren’t on Boomers’ radar anymore.)
Only 10% of TransAmerica survey respondents who are in their 40s are “very” confident in their ability to live comfortably in retirement, and more than half of those in their 50s admitted to just guessing how much money they’ll need in retirement. More than two-thirds of Gen X’ers responding to the Allianz survey say they’ll never have enough money to retire, and more than 40% say it’s “useless to plan for retirement when everything is so uncertain.” More than half say they “just don’t think about putting money away for the future”
“Their hands-off approach to planning and preparation is alarming,” Allianz Life vice president of Consumer Insights Katie Libbe said in a statement accompanying the release of the survey.
That’s bad news. Gen X’s reputation for pessimism and angst is on full display in this survey, Libbe points out, and these character traits threaten to undermine their financial future.
Generation Y is more engaged, but they’re not doing so hot, either. The TransAmerica survey finds that young adults don’t have great expectations for retirement, either. More than 80% are worried that Social Security might not be there for them, and more than half aren’t counting on it to provide retirement income for them at all.
The good news is about two-thirds of twenty-somethings are already saving for retirement, but they might not be going about it in the most effective way, given that 37% say they know “nothing” about how they should be allocating their assets.
Still, their longer time horizon gives millennials the best shot at saving for a comfortable retirement, Collinson points out. “They can grow their nest eggs over four to five decades and enjoy the compounding of their investments over time,” she points out.
And because Millennials love small brands+ READ ARTICLE
Every time the Social Security Administration releases the list of most popular baby names in the U.S. for the prior year, observers of the human species try to figure out what the significance of the most popular names are. This is not so surprising since we are the only species on the planet that gets to name its offspring (as far as we know.) Some of these explanations are more speculative than others, but none feels completely right.
Now that this year’s list is out, name-watchers have noted that J-names are getting unpopular while names starting with vowels are hot. Names that end in a plosive (Pete, Jack, Kate) are less popular than names that end in a fricative or a vowel. People seem to be losing interest in New Testament names (Mary is thin on the ground and Michael, who had a 45-year reign as male baby name No. 1, is trending down.) But Old Testament names (Noah, Jacob, Ethan, Abigail and Daniel) are enjoying a spike.
Now comes Goldman Sachs, pointing out in a study of Millennials, that even the most popular names these days aren’t anywhere near as popular as those of yore. Twenty five years ago, 3% of American babies were called Michael, and 2.3% were called Jessica. But Michael and Jessica, who are now of childbearing age, are giving their kids names that fewer kids share. The most popular names in 2014, Noah and Emma, accounted for only 1% of babies each. The report points out that you’d need to add all the Noahs, Jacobs, Liams and Masons together to get the percentage of Michaels there were in 1980.
“We turn to the history of baby names to possibly provide a window into evaluating parents’ expression towards brands,” says the Goldman Sachs report, which identifies two main reasons for the wider spread of baby-naming: “greater diversity among parents and … an appetite for more differentiated and unique brands (which we believe names are).”
That’s right: parents want to give their kids a different name not so they can call it out on the playground and not have five kids look at them, and not so that Olivia (second most popular girl’s name) will be the only Liv in her class, and not so that if she loses her towel at camp everybody will know whose it is, but because they want their kid to have a unique brand. Millennials are disruptive; they prefer small brands. And they don’t want their kid associated with any monolithic name that might dominate the cut-throat baby name market. (Tip: get in early and invest in Gannon and Aranza now.)
Goldman Sachs somewhat gingerly admits it doesn’t know everything about Millennial parents: “…their attitude towards parenthood strikes us as being more idealistic and aspirational,” than their forebears, the report notes. “Having said this, we acknowledge that we are still in the infancy of this theme and are likely to be introduced to changes in values, companies and business models as it develops.”
Just to prove disruption isn’t limited to Millennials, this Gen Xer has put both her kids names in this story. See if you can spot them (hint; they’re lower case.)
They surpassed Generation X earlier this year
Millennials have now surpassed Generation X to become the largest generation in the American workforce, according to a Pew Research Center analysis of U.S. Census Bureau data.
Adults between the ages of 18-34 now make up one in three American workers, Pew reports. They outnumbered working adults in Generation X, who were 18-33 in the year 1998, in early 2015 after overtaking Baby Boomers last year.
The estimated 53.5 million millennials in the work force are only expected to grow as millennials currently enrolled in college graduate and begin working. The generation is also growing thanks to recent immigration, as more than half of new immigrant workers have been millennials.
The millennial generation as a whole, not just those in the labor force, is also expected to surpass the Baby Boom generation as the largest living generation in the U.S.
Today's young people just aren't as interested in notches on the bedpost
A new study suggesting millennials will have fewer sex partners than Boomers got everyone talking about indifferent twentysomethings and their sexed-up parents, but the truth may be even more shocking: a separate study found almost half of twentysomethings have not had sex at all in the last year.
Before we get to the not-so dirty details, let’s back up: the recent study of over 33,000 people published in the Archives of Sexual Behavior measured the collective number of sex partners of entire age groups — and it included a complex statistical analysis that projected how many partners millennials would have by the time they hit middle age.
“If the millennials do something very different as they get older, say they decide they’re going to have a lot of sexual partners in their 40s, then yes this number could end up looking different in 10 years,” says Jean Twenge, author of Generation Me and one of the original authors of the study. “But that would be unusual.” The study found that millennials were likely to have had an average of about 8 partners, while Boomers were more likely to have had 10 or 11.
But if millennials are going to keep sowing their wild oats into middle age, another recent study suggests they’ll need to up their game: less than 7% of 20-somethings have sex 2-5 times per week, according to data from online dating service Match, and 49% of people in their 20s have not had sex at all in the past year.
Even more shocking? The study says one in three 20-somethings have never had sex at all. “You’d think they’d be focused on sleeping around, but really what they’re focused on is getting ahead,” explains Dr. Helen Fisher, a biological anthropologist at Rutgers University and Chief Scientific Advisor for Match. “In their 20s I think they’re working very hard. There’s something to be said for the fact that they may be taking relationships and commitment more seriously.”
That seriousness is reflected in the way millennials calculate risky behavior, which is a big part of sexual activity. “This is a generation that has grown up with an awareness of HIV/AIDS,” explains Jeffrey Arnett a research professor at Clark University and author of Adolescence and Emerging Adulthood. “When the boomers were in their heyday, that didn’t exist and it seemed like free love was a good idea.” He also notes that millennials are much more likely to use condoms than boomers ever were.
Arnett says millennials may see their elders’ licentious behavior as a cautionary tale. “It’s not only that they have fewer sexual partners than the baby boomers did, but they also drink less, they smoke less, the crime rate is half now than it was 20 years ago, teenage pregnancy has plummeted—it’s part of this broader pattern of less risky behavior,” he explains.
“It could be that the children saw the consequences of not following the rules—high divorce rates, drug addiction, and a lot of teenage pregnancy and so on, and there are many of them who have grown up to be more conservative in terms of some of their own social behavior.”
Paradoxically, it also could be that increasingly lax attitudes about premarital sex make it well, a little less sexy. In the ’60s and ’70s, having premarital sex felt like breaking a taboo for someone you loved, Arnett explains: “it was a daring thing to do.” Today? It’s just something Mom and Dad used to do.
Whole Foods says it will open a new, lower-priced brand of stores aimed at attracting millennials.
Your parents probably had more sex than you're having
Sorry, Millennials, but despite your hookup apps, your parents were probably having more sex than you’re having. Millennials are much more tolerant of premarital sex than earlier generations, but they tend to have slightly fewer partners than their parents did, according to a new study released Tuesday.
Over the last eight years, acceptance of premarital sex has moved from a minority position to a majority position, with 58% of respondents in 2012 saying they thought there was nothing wrong with sex before marriage (compared to 44% in 2004,) according to a new study of over 33,000 people published in the Archives of Sexual Behavior. Over the 35 years before that, acceptance has gradually increased: 28% thought premarital sex was okay in 1972, then 38% in 1978, then 41% in 1982. As acceptance for premarital sex has increased, so has tolerance for homosexuality—in 1973, 11% of people believed gay sex was “not wrong,” but by 2012 that number had quadrupled to 44%.
Yet despite increasingly laissez-faire attitudes to sex and marriage, millennials are sleeping with fewer partners than their parents did. Boomers and early Gen X’ers born in the 1950s and 60s had the most sex of all—an average of 11 sexual partners as adults—followed by those born in the 1940s or 1970s, who averaged at about 10 partners. Millennials, born in the 1980s and 1990s, only have an average of eight sexual partners. Still, they’re doing better than their grandparents in the “Greatest Generation,” who slept with an average of about two partners each.
“Although millennials are more tolerant of these behaviors, they’re not taking that is license to sleep around,” said report author Jean Twenge, who also wrote Generation Me, about millennials. She noted that the decrease in the number of partners could be related to growing awareness about HIV and other STDs (since millennials are much more safety-conscious than earlier generations) and probably doesn’t have much to do with the morality of premarital sex. “Millennials have never known a world where premarital sex was a taboo,” she said.
Twenge said this change seems to be over generations, not over time. In other words, it’s not that the entire population that changes its attitudes all at once, but instead that a younger, more accepting generation replaces an older one. So while the culture as a whole may have become more accepting of premarital sex, people who grew up when it was still a taboo may not have necessarily changed their minds.
Still, despite the growing acceptance of sex before marriage, the data suggests that there might still be a different kind of awkwardness in the cross-generational sex talks. “What you might see when millennials are discussing these issues with their boomer parents is that millennials are more permissive of sexuality,” Twenge said, “but boomers might have to shut their mouths about how many partners they’ve had.”.
Read next: 5 Things You Need To Know About Kissing