A new report from the Brookings Institution, a nonprofit public policy think tank, explores how the attitudes of millennials figure to affect the working world in the next few years. According to authors Morley Winograd and Mike Hais, Wall Street and the banking industry might feel the wallop the hardest.
One reason: Millennials, who the report suggests will make up as much as 75 percent of the workforce by 2025, think very differently about their money than previous generations have.
The Brookings paper provides the chart below, which draws from a report from global financial servicer UBS. Compared to other generations, millennials’ savings are far more tied up in cash.
Brookings attributes much of this difference to a deep mistrust of the stock market in light of the recession.
It is worth noting that historically, younger people are less likely to stow money away and more likely to rely on cash. However, both the Brookings report and the UBS report say the discrepancy is particularly poignant.
“The financial (servicers) who look at this data say they haven’t seen anything like this since the Great Depression,’’ Winograd, one of the Brookings co-authors, tells Boston.com.
Indeed, the UBS report, available here, shows that Millennials list having enough money available for retirement as their number one financial concern, so the lack of investment isn’t for lack of worry.
“But unlike what might be expected, their concerns are very long-term in nature—retirement and their own long-term care—issues that are decades away,’’ the UBS report says.
Nor is it for lack of capital, at least in the case of the survey. The millennials surveyed had at least $75,000 in household assets if they were under 30, and those aged 30-36 had at least $100,000 in household assets.
The Brookings report predicts the banking and financial industries are in line for a reckoning as the generation continues to come of age. They also attribute this to a clash in the values of big banks—the bottom line, for the most part—and those that they say define millennials.
“Ultimately, the generation’s group orientation, its preference for win/win solutions, its deep sense of fairness and its desire that everyone in the group share benefits as equally as possible will lead Millennials to support the type of regulation and policy prescriptions that…will impact not just Wall Street, but all of America’s corporate governance practices,’’ the report reads.