A generation Y-er’s verdict on the latest developments in the world of young people and personal finance. To include your story in next week’s round-up, find me on Twitter.
This week’s analysis is released as a new report by the Institute for Public Policy Research says young people should be forced to vote. Making voting in a first general election compulsory would help to increase the political influence of younger people and help to get people into the habit of voting at future elections.
Guy Lodge of the IPPR says:
“Unequal turnout matters because it gives well-off and older voters disproportionate influence at the ballot box and reduces the incentives for governments to respond to the interests of non-voting groups”.
It is well-documented that older people vote in disproportionately high numbers, and as a direct result, the “grey vote” is seen as vital to electoral success.
Lodge goes on to say:
“There are many other things that young people are required to do, not the least of which is go to school. Adding just one more small task to this list would not represent an undue burden, and it could well help to reinvigorate democracy. It would make politicians target first-time voters like never before and give young voters the potential for far greater political power.”
Sarah Birch, of University of Essex, and a co-author of the report believes low turnout among the young creates a “vicious cycle disaffection and under-representation that makes young people even less likely to vote”.
New research from the National Institute for Economics and Social Research has found that one in three young people in work are underemployed – that is, they would be willing to work more hours than they currently are. According to the research, ethnic groups, including black and black British people, are particularly affected by this.
So, when this is counted alongside the 20% of young people who are currently unemployed, it shows that it is harder than ever for young people to break into the job market.
However, over in the US, psychologists have found that there is a “fantasy gap” between young people’s desire for wealth and their willingness to work for it. Research compared the work ethic and materialism of three generations of high school students. They found that 62% of students surveyed between 2005 and 2007 felt it important to have a lot of money, compared with 48% from 1976 and 1978. From 2005 to 2007, 39% of students revealed that they did not want to work hard – from 1976 to 1978, this figure was 25%.
These findings were published in the journal Personality and Social Psychology Bulletin and are in stark contrast to the efforts young people are going to in order to secure employment.
Professor Jean Twenge who conducted the research said:
“Compared to previous generations, recent high school graduates are more likely to want lots of money and nice things, but less likely to say they are willing to work hard to earn them.
“That type of ‘fantasy gap’ is consistent with other studies showing a generational increase in narcissism and entitlement.”
According to Camilla:
The My Money Week competition this year is setting young people from the ages of four to 19 the challenge to think creatively about The A-Z of money.
“I hope the competition will encourage them to find out about finance and have fun putting it into their own words.”
SAVINGS AND INVESTMENTS
SaveUp – a US-based online financial rewards programme for saving and paying down debt – has discovered a fundamental shift in the way Americans deal with finances.
Those in their 20s and 30s are much more aggressive savers, even though they tend to be lower wage earners. They are also more proactive in paying down their debt, perhaps because they have far more of it than other age groups. In March, for example, young adults paid off 1.2% of their debt, whereas others paid down 0.7%.
However, a relative lack of opportunities is limiting Generation Y’ers’ life choices, as data suggests that:
“the economic downturn can profoundly impact major life decisions and limit choices for people in their 20s and 30s: young Americans have high unemployment, are buying fewer homes, and putting off childbearing.”
Priya Haji, CEO of SaveUp comments:
“Perhaps the Great Recession was a wake-up call. Young adults have more to thank than just the Great Recession for their sound financial planning though, as many younger demographics are more likely to use online tools and other financial resources to help them meet their goals. The threat of financial insecurity has instilled a permanent sense of financial awareness with this country’s young adults. This new awareness spurs determination, drive, and openness to adopting new world technologies in order to solve old world problems.”