A Recession Is Just What Teens Need
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.