Jobs scarce, college grads go into business for themselves
The US saw yet another lackluster jobs report in January, with the economy adding 113,000 jobs when 185,000 were expected. Faced with a high unemployment rate and even higher student debt, the youngest group of adults don't appear overly discouraged. Instead, they're becoming more inventive.
They're the most educated generation in history, and now they're the least employed. Their unemployment rate is nearly twice that of other generations. And they have an average student debt of $26,000 to boot.
The job market around them, too, continues to plod in its recovery. The US added 113,000 jobs in January, well below the 185,000 expected, according to figures released Friday morning by the Bureau of Labor Statistics (BLS). The unemployment rate dropped to 6.6 percent – its lowest level since 2008 – but economists still consider those results tepid.
Yet Millennials, on balance, don't appear overly discouraged. Instead, they're becoming inventive.
Take Jim Wangercyn, for instance. With his brother, he created the Loopy Case, which allows people to hold their smart phone securely while having it in hand, say when running or attending a concert. The product won a $5,000 award at a business school innovation competition and, with sales beginning to take off, offers the brothers a way to work for themselves.
"Corporations are so repetitive," says Mr. Wangercyn, a senior at Indiana University. "It's not like that in entrepreneurship. You learn so many skills."
In the aftermath of the Great Recession of 2007-09, the 18-to-29-year-old Millennial generation is increasingly choosing entrepreneurship over a traditional career. Low barriers of entry to digital work, access to entrepreneurial education, the glamorization of entrepreneurs like Facebook founder Mark Zuckerberg, and, of course, the lack of jobs in corporate America are pushing the newest generation of workers to create their own jobs. The trend, if it continues despite a slowly improving economy, could make Millennials America's most entrepreneurial generation yet.
"There's no promise of jobs anymore," says Dan Schawbel, founder of Gen-Y research firm Millennial Branding and author of "Promote Yourself," a 2013 book on career success for Millennials. "Entrepreneurship offers them a solution.... Even if it doesn't work out, they have something on their résumé."
Although some Millennials are choosing entrepreneurship out of necessity, for many, it's a preference. College entrepreneurial education is on the rise: 5,000 entrepreneurship courses were offered last year, up from about 100 in 1975, according to The Ewing Marion Kauffman Foundation. Demand is also on the rise: 35 percent of employed Millennials have started their own business on the side, and 72 percent want to quit their jobs to become entirely independent, according to a study conducted by freelance job marketplace oDesk and Millennial Branding.
Already, 27 percent of Millennials are self-employed, according to a 2011 study conducted by the Young Entrepreneur Council and Buzz Marketing Group. And more are on the way. Many Millennials delayed starting a business because of a poor economy, according to a Kauffman Foundation study, but 51 percent plan to start businesses in the next five years.
Thanks to the Internet, the barriers to entry to entrepreneurship are lower for Millennials than for previous generations. Additionally, social media allows them to network and to promote their business.
"It's now easier to start a business through bootstrapping and/or crowdfunding than ever before," says Janet Strimaitis, director of the Arthur M. Blank Center for Entrepreneurship at Babson College in Wellesley, Mass.
Crowdfunding websites such as Kickstarter and AngelList make it easy for entrepreneurs to raise funds. "So many companies get started on Kickstarter," says Wangercyn, the inventor of the Loopy Case. "It becomes a reality overnight. There used to be so many more hoops. Now, it's easier to pool resources."
Not only is entrepreneurship now accepted as a viable career, the media has glamorized it. "It used to be 'cool' to get with a big-name company. Now, entrepreneurship is the cool thing to do," says Dan Hanrahan, vice president of iGoDigital and entrepreneur-in-residence at Indiana University Bloomington's business school.
Even moving back home – a fairly common event for students after college – encourages an entrepreneurial mind-set, Mr. Schawbel says. Living at home means lower expenses, which leaves more money available to invest in business ideas. In 2012, about 36 percent of Millennials were living with their parents – the highest share in at least the past four decades, including the depths of the Great Recession, according to the Pew Research Center.
Wangercyn plans to dedicate himself to the expansion of Loopy Cases after graduating in the spring, avoiding the corporate career path entirely. The company launched its first television commercial late last year and plans to increase its presence at music festivals and run events this year to showcase its technology. "You live for your own dream, not someone else's," he says.