What Lessons Will Today’s Youth Learn from the Economic Tragedy?

They called my generation “Gen X” or the “MTV” generation.  My generation learned to be wary of company loyalty.  We never learned to be loyal to a company because we saw our parents laid off from their jobs where they worked for 15 or more years. We never expected to be with the same company forever.  Working at the same job for 5 years made you an old timer.

Worldcom was my employer’s client during the dotcom boom and crash.  Many of my friends were legacy employees from the MCI days, who saw the company they were loyal to destroy their retirement pensions in scandal.  Many people may say it was their fault, and should have diversified better.  However, these were real people who did nothing wrong other than be loyal and trust their employer.  They didn’t cook the books, nor could they have known.  They paid a terrible price.

I learned to be wary of company loyalty.

The current generation graduating college today is entering a period of financial hardship far worse than the tech bust.  Pensions are rarely offered these days.  401Ks and IRAs have taken over as the retirement of choice.  They were sold as being able to make your own choices about retirement.

Great idea.  However, with the job market shrinking during this massive economic contraction and retirement funds down 40% or more, I wonder if the current generation will view the stock market with the same skepticism I have about working with the same company for 15 years.  A lot of these kids’ parents will be unable to retire when they originally planned.  They will need to stay in the work place longer to make up for the lost funds.  Many children will need to financially support their parents.  The baby boomer crisis with social security just became a lot worse with them now also losing their 401K and IRA values.   We will all collectively be responsible for paying down the debt, fairly or not.  Will there be such a thing as retirement for most of us?

Many people are selling the down stock market as a great time for young twenty somethings to invest.  They may have the best opportunity to make lemonade out of Wall Street lemons.  I hope, though, that there will be a lesson not forgotten.