How the 77-Million-Strong Millennials Will Reshape Marketplaces in the Decades to Come

Now it's the turn of the Baby Boom's children to shape American society, says Melissa S. Bristow, Kiplinger Managing Editor. The older half of Generation Y — also called the Millennials — are young adults, participating in the workforce, voting in elections, establishing households and in myriad ways making their presence felt in the workplaces and markets of the U.S.

About 77 million American Gen Yers were born over an 18-year span — 1981 through 1999. That's about the size of the Baby Boom, though Gen Y is a smaller share of the population. In 1970, for example, Baby Boomers accounted for nearly half of the total U.S. population, while today only about a fourth of Americans are part of Generation Y.

The single most important difference between Gen Y and earlier generations: The Millennials' familiarity with technology. Gen Y cut its teeth on computers and digital media. More than any other population segment, Gen Yers see technology as enhancing the quality of their lives — making work easier, allowing them to manage time better and bringing family and friends closer. 90% of Gen Yers over the age of 18 use the Internet. 75% use social networking — Facebook, LinkedIn, etc. 60% of them access the Web wirelessly while on the go. 83% keep their cell phones nearby, day and night, awake or sleeping. Two-fifths don't even have a land line.

Gradual racial and ethnic shifts in the population as a whole are more concentrated in younger generations because most immigrants are young adults and because Hispanic families in the U.S. tend to have more than the average number of children. So, only about 60% of Gen Yers over the age of 18 are white, compared with 65% of everyone in the U.S. About 20% of young adult Millennials are Hispanic. About 13% of them are black. In contrast, only 10% of Baby Boomers are Latino, and 11% are black. For now, Generation X — the small cohort between the Baby Boom and Gen Y and now aged 30-45 — has the highest share of foreign-born Americans, largely because they are the same age as most new immigrants. As Gen Y moves into that age bracket, its share of nonnatives will swell.

In addition to possessing a technological savvy that can't be beat, Gen Yers are well-schooled. One in five Millennials over the age of 18 have already graduated from college; one fourth of them are working on graduate degrees. Another fourth are in college and about 30%, though not now in school expect to earn a degree. They're on track to beat all previous generations. Gen Yers are also well traveled. About a quarter of a million Gen Yers study abroad each year. They're culturally aware thanks in part to their foreign studies and to the diversity of their peer groups. And Millennials are used to working in groups. From preschool on, they've been taught to work cooperatively, with stronger team members helping out others.

When it comes to money, Gen Yers are different from their elders, but may come to resemble previous generations more as they pass through the life stages of marriage, family, retirement and so on. For now, they're less acquisitive than their Baby Boomer parents, steering away from what they see as conspicuous consumption. When they do spend, Gen Yers are value conscious — maybe because technology makes finding the best buy a no-brainer. Traditional advertising doesn't have much street creed. Millennials are more likely to buy based on peer recommendations. And they're a bit more willing than older shoppers to pay higher prices to protect the environment.