The Y Generation, you know the demanding, sports car driving, Dolce wearing, career churning, money hungry generation who is about to take over and run our societies... Scary!
Whilst the Y Generation has had much written about it and arguably the majority of the commentary has been negative. The Y Generation are seen as the spoilt part of our society, getting the easy ride - plenty of work, plenty of money no worries. But it won't be like this forever dummies.
Ten years ago, a good friend of mine, a man in his mid-fifties said to me, the problem with people of your generation (I'm in the X category) is that you will never know hardship. You won't know what its like to go through a depression, you won't ever know what it feels like to not have work, you won't ever know what its like to live poor! He then went onto say, this will be the downfall of the generation!
It was an interesting comment and I think holds significant wait into today's economic environment.
Right now in Australia the economy is still steaming ahead on the back of the resources boom. Whilst interest rates have been tweaked upwards in recent times, the economy is ostensibly fully employed and housing ownership is at its highest for some time. The average wage is above $50k per annum, with strong salaries being experienced in the IT and the mining and resources sector where junior level employees (those firmly in the Y sphere) are regularly generating six figure incomes.
This phenomenon has been around for at least 10 years, back when the Y-Generation were teenagers. They have entered the workforce in prosperous times and many have used the lure of debt lending to build their asset base - low doc loans, high debt to equity gearing (some lenders are offering products providing 110% against an asset). They have not known hardship, only prosperity.
So what if the economy goes in decline, what will happen to these debt-burden “kids”?
Well this issue is a serious one and likely to occur in the next five to ten years. The economic fall out will be significant and it could have long term ramifications for the Y and the next two generations after it. They won't have the necessary skills to cope with the downturn and will lead to further increases in debt defaults and at its worse depression and suicides.
So the question is, how do we mitigate the risk? That's a question What do you think Governments in the position in the strong economies can do to provide todays kids with the skills to cope with adversity that is arguably just around the corner.
