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A Recession Is Just What Teens Need
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My generation, long spoiled, is finally learning to pinch pennies. And that might just be the economy’s best hope.
One of my favorite stores is Plato's Closet, a thrift shop chain that offers gently used name-brand apparel at deep discounts. On a recent visit I bought a pair of Diesel jeans for $25 and a pair of Lucky Brand jeans for $20. I used to shop there by myself, but suddenly, many of my friends are eager to join me. Seems their parents, shell-shocked by their brokerage statements, have tightened the purse strings. Kathleen Lantz, who manages a Plato's Closet in Harrisonburg, Va., recently told the local paper there that business is booming, both in sales and consignments. "People really want to make that little bit of extra money and sell their clothes,” she said.
The recession has been tough on people my age. I’m 20, a member of a generation that has exhibited an unrivaled sense of material entitlement, and a virtually insatiable thirst for cars, computers, iPhones, and Xboxes. The Wall Street Journal’s Jeffrey Zaslow famously railed against my peers and me for internalizing the “you’re special” sentiments of Mr. Rogers. “But what often got lost in [Rogers’] self-esteem-building patter was the idea that being special comes from working hard and having high expectations for yourself,” Zaslow wrote.
It would take an act of God to get high school students to clip coupons, but buying used T-shirts is a start.
Now companies like Abercrombie & Fitch and video game retailer Gamestop have seen their stock plummet on weak consumer spending and a flight to lower-cost alternatives; Abercrombie's stock dropped to $19 a share after a high earlier this year of $84. Its more affordable competitor Aeropostale, on the other hand, reported same-store sales were up 1 percent in October, while Abercrombie’s fell by 20 percent.
Don't tell your kids this, but this is great news for young people, at least in the long term. It would take an act of God to get high school students clipping coupons between classes, but buying used T-shirts for $9 instead of new ones for $36 is a start. The economic turbulence, especially if it lasts as long as the more pessimistic prognosticators believe it will, may lead my generation to make better decisions than our parents did.
One of my theories about money is that the way people handle a bit of it while they’re young is the best predictor of how they'll handle more of it when they're older. When I was a little kid, I hoarded my $2 weekly allowance while my older brother spent his instantly. Today, we both earn more than $2 a week, but our respective spending habits remain the same. By instilling a focus on value shopping, the recession could lead young people to make better financial decisions later in life, when the stakes are much higher than Aeropostale versus Abercrombie.
Making all this worse (or better, depending on your perspective) is that restaurateurs have been hit harder by the consumer slowdown than just about any other industry. They’re also one of the largest employers of young workers. Many have dramatically cut back on expansion plans. The "Winter Break Help Wanted" signs aren't as common a sight as they were a year ago.
The Chicago-area Courier News recently spoke with Peggy Gundrum, director of Career Services at Elgin Community College, about the tough time teens are having finding work as they compete for fewer jobs with older, more experienced people who have been laid off. She said students can get work if they’re able to separate themselves from the pack. "You need to really review questions, practice, know how to respond. You really have to stand above everyone else with all the layoffs," she said. In other words, teens looking to raise cash to pay for cell phones and clothes will be forced to adapt to the changing environment by learning how to put together resumes, appear intelligent during interviews, and market themselves.
Many of my college peers are also nervous about graduation, partly because we've watched some of our older friends struggle to find good-paying jobs in the fields that interest them. One sophomore friend called me last night because she was concerned that she wouldn't be able to get a job in the fashion industry when she graduates. So we formulated a plan: Instead of worrying about the job market, we’ll go to the library together one night this week and email ten potential employers demonstrating knowledge of the industry and enthusiasm for their companies, asking them what she can do to make herself the ideal candidate when she graduates in 2011. Then, when she applies for those jobs in a couple of years, she can show them the emails and say, "You told me what to do, I did it, and here I am." I'm sure she has dozens of things she'd rather spend her evenings doing than sending emails, but it could position her for long-term success.
Much the way penny pinchers in their 80s are said still to harbor a Depression-era mentality, my debt-addicted peers are adopting a recession-era mentality. If they can carry it into their adult years, it will be to everyone’s benefit.
Zac Bissonnette is an editor with AOL Money & Finance and its new personal finance site WalletPOP.com. He is a sophomore at the University of Massachusetts Amherst.
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I'm 19, and my parents have never exactly been willing to just throw money at me. Which is why I'm glad to hear the more privalleged kids are going to have to start using their imaginations to have fun.
I can't help but see this as the flip side of the digusting "My Sugar Daddy" post, by a college student who opted instead to satifsy the designer clothing jones for now, at the expense of learning a work ethic, independence, money management, and self-respect! I certainly hope that more of the kids from your generation take after you than her!
While I was hardly as spoiled many of my peers, or the kids who came right after (I'm 29 now), I felt I could always count on my parents to bail me out if need be... and I felt so certain that I'd get a high paying job after graduation that I had no qualms about racking up over 50 grand (!!!) in credit card debt.
After a year on my own, trying to climb up the DC ladder and learning that what I wanted to do and what paid the most were rarely one and the same... and working nights at a nightclub, being tempted by the quick money of theft, escorting, and drugs -- I decided to declare bankruptcy, move home for a bit, and get my house in order.
It was one of the hardest periods in my life thus far, but I came out of it a lot stronger and a whole heck of a lot smarter. I cut cupons, shop sales, and pay for luxuries only out of available money. I budget myself out months in advance, with contingencies and savings for unemployment and minor emergencies. I wish it hadn't taken a crisis for me to internalize these sorts of values and practices, but I'm glad I did anyways.
Here's hoping that your generation -- and a few others -- learn some responsibility from this crisis. I'm just hoping that there's a maximum of learning, and a minimum of suffering. It's awful that the two so often have to go together...
Don't let Jeffrey Zaslow get you down. I'm in my 40s and grew up with Mr. Rogers too. Love like his doesn't spoil anyone.
We human being all think the world revolves around us for awhile and aren't really attuned to others or able to self-soothe. Usually that gets straightened out by our parents, or if that fails, by life at some point.
The terrible recession of the early 80s practically boarded up the downtown I grew up in. It was terrible and scary with predictions the banking system was about to collapse. People were buying guns, gold and stocking up their basements with supplies like Mormons. And the Russians were going to destroy us or we'd destroy them in retaliation -- and of course because these were nuclear attacks, we'd all be brought down regardless.
I am fiscally conservative given what I earn today because of that time and the lessons learned over the years by screwing up. I'm debt free and secure, even today, because of my habits learned in my 20s. And never have banked on my career to bring happiness because I didn't have one for years because good jobs were hard to get and keep.
I agree, this can do your generation a world of good in terms of valuing what really matters.
As recessions, wars, natural disasters, personal tragedy or good parenting have done for others before and after us too.
It's about time. As an educator, I am tired of seeing and hearing about the exorbitant amount of money being spent on clothes, video games, electronics, cars, etc. Most of my students have more expensive wardrobes than I do! While it may not be pleasant now, I do hope you're right that these lessons will be carried on into adulthood.
YES! I have been thinking this for years -- we need a recession to save a generation of kids from turning into the self-obsessed, ultra-entitled young adults I encounter every day in the workforce now. Long gone are the days when you can get a teen to babysit, mow your lawn, deliver your paper or watch your pet while you're away. It's just not worth it to them because they don't need the money and can't even conceive working for less than double-digit dollars an hour for even the most simple tasks. Then they enter the workforce and expect that the company exists to serve them. If doesn't matter if they haven't done a good job or if the company doesn't have the right place for them to advance at any given time, its their god-given right to do so in six months to a year. I once had an assistant who 6 months in responded to her negative review by admitted she doesn't try very hard but that its ok because the job is under-stimulating and she would do better if I promoted her. No joke. When that didn't happen she soon left, and has hopped around every year or two since. She's actually very smart and capable, just utterly poorly motivated and misdirected in her expectations about what the world owes her. And I encounter people like her almost everywhere I look now...
I don't know how you do it (maybe it's because I'm still highly insulted about your rant on community colleges), but somehow you always come off so pompous in your writing. This holier-than-thou attitude is not endearing in the slightest. Maybe when you lose your superiority, I'll take what you have to say more seriously.
Good artical...cute author. hahah
Dear Dailybeast,
I love your website and read it every morning...well done. I'm glad to see Zac's blog as it's interesting to hear from his generation as they have an increasing important role in the future/recovering of our leadership in the world. To comment on Zac's noteworthy article, "College sophmore solves financial crisis", having spent my professional life as a financial advisor I've been saying for years that completion of a personal money management course should be a mandatory requirement to graduate high school in this country. It's in our best interests to teach young people to respect money and learn how to use it wisely. We can't rely on parents to teah us about balancing a check book, applying for credit/student loans, knowing how to read a credit report, and how these instruments can affect your ability to be successful in life. Let's not let our young people mortgage their future before they get a chance to live it. On a side note from above article, I don't believe that " being special comes from hard work and having high expectations", it comes from achieving at a high level by consistently producing results...when you do this in your profession then you can feel special because your company will let you know it through promotions and bonuses. Working hard and having high expectations is simply a requirement that everyone must have to be successful in life. Cheers.
I also came of age during the 1980's recession in a town really feeling the pinch. I learned a lot about financial responsibility and this was clearly reinforced by the rigorousness of banking policies of the era. It took me 3 years to get a 'real' credit card (for the 3 year trial period I was given a debit card tied to my savings account). Once the card did become a true credit card my limit for the next 5 years maxed out at 5,000.
Yes, I had to save for things (or do without) and many times struggle. For a couple of especially lean years there were at least 3 days a month where I didn't have money or food and no credit so I went without (now this is trendy....can u say fasting??).
I am thankful that during this period I was NOT able to rack up thousands and thousands of dollars in credit card debt for things I obviously didn't need....I would probably still be paying it off now if I had.
Hey Zac,
I thought your blog was very interesting and wanted to tell you about this contest that I think might be relevant for you. All you need to do is come up with a creative, original idea for a video game that addresses the nation's fiscal crisis and you could win $10,000 if you're chosen as the winner. For more information and to apply, you can go to: http://indebted.mtvu.com/the-challenge
Zaccy is right about this generation being self-absorbed. I can vouch for it as a 19-year-old college student. It's true that most spend way too much, and citivas was right about the lack of work ethic.
I have to disagree with the comment about people's spending habits as kids being reflective of the way they spend money as adults.
I grew up as a penny pincher. When I got my first "real" job at 17, I kept putting money away. About a year ago I came to the realization of, "Wait, I can buy that -- I have money now!" It's not to say I'm not saving money. I have been, but college is especially adept at depleting savings, and the money I put away each month becomes less and less.
I've bought my first car myself, I can now help out my parents with the utility bills every once in a while and my checkbook is always balanced. I was probably the only high-school student that did clip cupons. I always try to get the best deals online and the great majority of my clothes are second-hand. That's not to say that I myself am financially responsible.
Now that I have money, it's not uncommon for me to spend $100 or so per week on unneccessary splurges -- music, books, movies, pizza, gifts. Those "great bargains" still add up.
And I admit, I do need to have wage in the double digits. That's why I spent 4 months and about $1,000 on job training so I could get a job with an hourly wage in the double digits. I'm in healthcare, which is a field that's always in demand. If I feel that I'm at a point where my job is interfering with school, I quit, confident that I can easily get another job once I catch up with my schoolwork.
I can see every criticism to my generation in myself, yet I don't change. Maybe a recession might work for some people, but who's to say it will work on everyone? Especially in the generation that only works for instant gratification. We have a "we deserve it now" mindset, and it will be hard for most to kick it cold-turkey. I think I'm being fairly realistic when I say that most will prefer to go into debt rather than do without.
I can tell you from experience, most people in my generation, Generation Y, will not learn from this. And I hope that Abercrombie and Hollister go down like the firey heap of shit that they really are. Such a rip off!
"It would take an act of God to get high school students clipping coupons between classes, but buying used T-shirts for $9 instead of new ones for $36 is a start."
Seriously, who in their right mind would pay $36 for a T-Shirt, or even USED T-shirts for $9??? That's insane.
I'm a 41 y/o married professional, with a household income of about $85k/yr, and there's no way in hell you'd catch my wife or I paying $36 for a t-shirt. That's nuts.
Love your columns, man. Half my age, and twice as smart as I was at your age. Keep up the good work!
-David
Bangor, Maine
Thank you.
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