Clash of Generations - Boomers vs. Millennials: Attitude Change Will Disrupt Wall Street and Corporate America

As boomers and gen-Xers hand over the economic reins to millennials, a once in a multi-generational attitude shift comes with it.

Unlike boomers and gen-Xers whose primary focus was on money and "getting ahead" lifestyles, millennials have more of a depression-era survival mentality coupled with a completely different set of values.

The ensuing attitude change has profound implications, and that is the focus of the Brookings study:  How Millennials Could Upend Wall Street and Corporate America.

Let's start with a couple of demographic definitions then a look at the study.

• Boomers: Born 1946-1964
• Generation X: Born 1965-1981 
• Millennials: Born 1982-2003

Brookings Study Excerpts

Millennial Dominance



Millennial Values

By 2020, Millennials will comprise more than one of three adult Americans. It is estimated that by 2025 they will make up as much as 75 percent of the workforce. Given their numbers, they will dominate the nation’s workplaces and permeate its corporate culture. Thus, understanding the generation’s values offers a window into the future of corporate America.

In the future, most Americans, taking their cue from Millennials, will demonstrate a greater desire to advance the welfare of the group and be less concerned with individual success. They will be less worried about being guided in their daily decisions by software and more intrigued by the opportunities it offers. Even without any major environmental disaster, they will display a greater reverence for the environment and less interest in the acquisition of things as opposed to experiences.

It will be a world that is radically different than the one those who wield power today have grown accustomed to leading. The Baby Boom generation, born between 1946 and 1964, has made confrontation the touchstone of its existence. In their youth, Boomers protested the Vietnam War, or fought against those who did. As they aged, both conservative and liberal Boomers polarized America’s politics, making compromise morally unacceptable. Throughout their lives, Boomers have honed conflict and competition to a fine art.

As Boomers begin to leave the corridors of power in Congress and the executive suites of corporate America, they are being replaced by members of Generation X, who are largely devoted to the pursuit of the bottom line—preferring speed over reflection and autonomy over collective decision-making.

Silicon Valley CEOs, many of whom are drawn from the ranks of Generation X, look with disdain on the good old boys network of their Wall Street counterparts and are eager to leverage the technologies they have developed to gain advantage in the marketplace over the older, more established titans of the media and telecommunication sectors.

This is not to suggest that Millennial CEOs are, or will be, any less interested than Boomers or Gen-X’ers in assuring the success of the enterprises they now, or eventually will, lead. Rather, it is to emphasize the importance of recognizing the differences in how Millennials define success and the way they make decisions in order to envision the future of corporate America.  

Millennials as Consumer-Workers

Cone Communications has been tracking the attitudes of American consumers toward businesses’ involvement in social issues. As Millennials became a larger and larger share of the marketplace, the idea of “cause marketing” has evolved from a nascent promotional strategy to the key differentiator, not only in deciding what to buy, but who to trust and reward with brand loyalty.

Cone’s 2013 survey of over 1,200 U.S. adults found Millennials to be the generation most focused on corporate social responsibility when making purchasing decisions.

Almost all Millennials responded with increased trust (91%) and loyalty (89%), as well as a stronger likelihood to buy from those companies that supported solutions to specific social issues (89%). A majority of Millennials reported buying a product that had a social benefit and 84% of a generation that accounts for more than $1 trillion in U.S. consumer spending considered a company’s involvement in social causes in deciding what to buy or where to shop. In 2013, 89% of all American consumers said they would consider switching brands to one associated with a good cause if price and quality were equal. That percentage was 23 points higher than when Cone first did its survey in 1993, at a time when no Millennials were part of the adult population.

Not only are Millennials creating the need for companies to pay attention to their corporate social responsibilities, but they are also leading a shift in buying behavior away from the glorification of consumerism to a more measured view of what’s important in life. Young & Rubicam’s brand attribute survey in 2009 of 2,300 adults found that a majority of Millennials belonged to a segment labeled “Spend Shifters.” Not only did three-fourths of the “Spend Shifters” say they “made it a point to buy brands from companies whose values are similar to my own,” almost all of them (87.5%) disagreed with the statement that “money is the best measure of success.”

The authors of Spend Shift, John Gerzema and Michael D’Antonio, pointed to a major shift between 2005 and 2009, just as the first wave of Millennials became adults, in what consumers were looking for in the companies with which they wanted to do business. Attributes such as exclusive (-60%), arrogant (-41%), and sensuous (-30%) fell from favor while values more associated with those of the Millennial generation rose dramatically.

Kindness and empathy rose 391 percent in these five years, the biggest shift in attitudes ever seen in the seventeen year history of the survey. Other values associated with the generation, such as friendly (+148%) and socially responsible (+63%), also rose dramatically. These shifts in consumer attitudes driven by Millennial values will give every American corporation that wants to attract customers, not to mention workers and investors, no choice but to deliver on a commitment to make the world a better place one cause at a time. Companies will also have to behave a lot more nicely than they are accustomed to in order to deliver those results, more like the characters in “Her” than those in “The Graduate.”

Evidence that these attitudes represent a generational shift, not one based simply on age, can be found in a benchmark survey of 1,250 insurance company employees conducted for LifeCourse Associates in 2012. Almost two-thirds of Millennial employees said they wanted their employer to contribute to social or ethical causes they felt were important. Only half of the Boomers and older Gen Xers surveyed felt the same way.

This desire on the part of Millennials for their daily work to reflect and be a part of their societal concerns will make it impossible for corporate chieftains to motivate Millennial employees simply by extolling profits, or return on investment for their shareholders, or even employee salaries. For example, a recent Intelligence Group study found that almost two-thirds (64%) of Millennials said they would rather make $40,000 a year at a job they love than $100,000 a year at a job they think is boring. 

Millennials Think About Money Differently

In its latest study of the Millennial Generation, Millennials in Adulthood, the Pew Research Center found that America’s youngest adults were the least trusting of any generation.

Only 19 percent of Millennials agreed with the statement that “most people can be trusted,” a percentage that was about half of all other older generations.



A recent survey by MFS Investment Management found that nearly half of Millennials “never feel comfortable investing in the stock market.”  The survey also showed Millennials keep more of their assets in cash, less in stocks, and, in spite of their relative youth, have a shorter time horizon—less than five years—for their investments than Boomers or Gen Xers.

A report by UBS Wealth Management in the Americas described Millennials as “the most conservative generation since the Great Depression” with regard to its savings habits. According to UBS’s research, the average investor aged 21 to 36 has 52 percent of their savings in cash, compared to 23 percent for other age groups.



Clearly, one reason for this avoidance of the stock market stems from the same experience of extreme volatility and risk that the Millennials’ GI Generation great grandparents experienced when they were coming of age during the Great Depression. A 2013 study by Accenture confirmed these attitudes, with 43 percent of Millennials identifying themselves as conservative investors, compared with 27 percent for Generation X and 31 percent for Boomers. But the survey also uncovered a deeper reason than just the Great Recession for this cautious investing behavior by Millennials.

The Accenture survey found high levels of mistrust of financial institutions among Millennials and a greater reliance on the Internet, social media, and personal networks for financial advice. As Kelsey Raycroft, a Boston-based Millennial put it, “The personal connection is important to me, especially with money stuff.... When I see these commercials with big companies, I’d rather go to somebody I trust.”

In fact, this deep level of distrust toward the banking industry led the authors of the Millennial Disruption Index to identify the financial sector as the industry most likely to experience severe disruption in its business model. Their three-year research study of more than 10,000 Millennials also found that of the ten least-liked brands among members of this generation four belonged to the nation’s most powerful banks—J.P. Morgan Chase & Co., Bank of America Corp., Wells Fargo & Co., and Citigroup. Seventy-one percent told the researchers that they would “rather go to the dentist than listen to what banks are saying.”

Report Merits a Closer Look

There is much more in the 19-page PDF that merits a closer look.

For example, the study contains a discussion of what working 9-to-5 means at a place like Goldman Sachs. The short synopsis is that for the first couple of years, 9-to-5 means 9AM to 5AM, seven days a week.

In the list of companies where millennials would like to work, there are some non-surprises like Google and Apple, but also some real surprises like the FBI and CIA.  St. Jude's Children's Hospital, also a surprise, was the number one choice.

Major Attitude Shift

I have been writing about the implications of changing attitudes since at least 2008.

Flashback June 25, 2008: This is what I said about attitude changes in Peak Credit

Secular Attitude Change Underway

There is a secular attitude change happening right now. Boomers close to retirement are now (finally) scared to death as the equity in their houses has been vaporized. School age children are seeing homes foreclosed, and families destroyed over debt. The American consumer, who nearly everyone thinks will be back as soon as the economy picks up are mistaken.

Secular shifts like these come once in a lifetime. Sadly it's too late for many cash strapped boomers counting on equity in their houses for retirement.

Lessons Of The Great Depression Forgotten

The lessons of their great grandfathers who lived in the great depression era were forgotten. Over time, everyone learned to ignore the dangers of debt, risk, and leverage. Belief in the Fed and the government to bail out any problem are ingrained. Bank failures are distant memories.

Anyone and everyone who wanted credit got it, and on the easiest of terms: subprime, pay option arms, reckless leverage, and covenant lite debt and toggle bonds that allowed debt to be paid back with more debt. That's what it takes to hit a peak.

Peak Credit

Peak credit has been reached. That final wave of consumer recklessness created the exact conditions required for its own destruction. The housing bubble orgy was the last hurrah. It is not coming back and there will be no bigger bubble to replace it. Consumers and banks have both been burnt, and attitudes have changed.

It took nearly 80 years for people to get as reckless as they did in 1929. 80 years! Few are still alive that went through the great depression. No one listened to them. That is the nature of the game. The odds of a significant bout of inflation now are about the same as they were in 1929. Next to none.

Children whose parents are being destroyed by debt now, will keep those memories for a long time.

Social and Stock Market Impacts

Peak credit has been surpassed, but a substantial portion of the rise in credit is in the form of student loans that cannot and will not be paid back.

Importantly, millennial attitudes towards cars and other material goods is not the same as their parents. Moreover, student debt and a dearth of high-paying jobs ensures that housing formation will stay depressed, even if attitudes did not change.

As boomers retire, they will need to draw down on both their stock market portfolios and their savings (assuming they have either). Economic support from relatively low-paid millennials so that boomers can maintain their lifestyles will be massive.

Millennials will assist aging boomers via taxation and by overpaying for Obamacare. Higher taxes coupled with increasing time commitments to help care for aging parents will take a toll. And because boomers live longer than ever, the economic drain and time commitment from millennials will increase every year.

This has downward implications on the economy and the markets, especially in light of millennial-mistrust in stocks and the massive amount of student debt many of them carry.

Wall Street is not prepared for the major attitude and demographic shifts that are now underway. Are you?

In a related post, particularly for millennials searching for jobs, please consider BLS Employment Projections Through 2022: How Many Jobs Require a College Degree?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com