While many economists believe the global economy has recovered from the Great Recession and global GDP growth is stable, young adults continue to suffer from its lingering effect, which presents a challenge to fast-moving consumer goods (FMCG) providers, according to GlobalData, a leading data and analytics company.
According to GlobalData’s Q1 2017 global survey, 68% and 67% of Generation Xers and Millennials respectively are concerned about becoming unemployed, compared to only 58% for Baby Boomers.
Jonathan Khosravani, Consumer Analyst at GlobalData, comments: “Many young people coming of age during the 2008 recession, particularly in Western countries, saw wages cut and jobs disappear while living costs continued to rise. This hurt consumer spending as well as confidence and continues to have an impact on their perceptions of jobs as being transient or short term, as opposed to the traditional ‘job for life’ that Baby Boomers and the Silent Generation came to expect.”
Low wage and low productivity growth also continues to negatively affect many young adults’ job prospects, as companies cannot pay higher wages or offer the same job security or benefits to the same extent than they could pre-2008. This issue is being acerbated by the ‘gig economy’ that offers young adults a chance to make money but with very few traditional workplace benefits, such as job security or long-term employment.
Khosravani continues: “The feeling of job insecurity is omnipresent for many young adults and is not easy to solve in the short term without an improvement in productivity. This means that consumer spending and confidence will continue to be hindered amongst some of the most important consumers in the world.
“Young people might have to get used to job insecurity as the new normal, which will mean these consumers will be more cautious about their spending on non-essential goods. FMCG companies therefore face an existential threat in the coming years if young adults, as a combination of low spending and rising food prices, will deter these consumers from indulging themselves and overspending.”
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