Cover Story January 9, 2008, 6:26PM EST

Youthquake

They're called the Millennials—and they're fed up. Why? Try angst about jobs, health care, and debt. Now they're getting pols to listen

by Michelle Conlin

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Left to right: Dominique Wilburn, Robbie Cohen, Edward Summers Jennifer S. Altman

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Earlier than most of his rivals, Barack Obama sensed that a youthquake was rumbling deep inside the American electorate. For months, his campaign has put a premium on reaching out to YouTube (GOOG) disaffecteds. So far the strategy is paying off, helped along, no doubt, by the candidate's hip, un-boomer persona. The 46-year-old Illinois senator's surprise victory in the Iowa caucuses and close second-place finish to New York Senator Hillary Clinton in the New Hampshire Democratic primary were fueled largely by hordes of twentysomethings in hoodies—the oft-pierced-and-tattooed generation that has come to be known as the Millennials, or Gen Y.

No one can predict with certainty how much influence this cohort will have on the coming election. After all, youth-backed candidates have faltered before. (Ask Howard Dean.) But the so-called echo baby boom has size on its side: nearly 43 million people aged 18 to 29, according to the Census Bureau, or 20% of registered voters. That and this group's hyperconnectedness (all those Facebook friends and MySpace (NWS) pages) have convinced many pundits and economists that something seismic could be coming.

Across the political spectrum, they say, Millennials are mobilizing around the idea that the federal government's operating system is in dire need of a sweeping update. Iowa and New Hampshire proved that candidates ignore these voters at their peril. Youth turnout surged by 25 percentage points in the Granite State over 2004, according to the Student Public Interest Research Group, which is dedicated to getting young people to the polls.

John McCain and Clinton attracted most of the 25- to 29-year-olds, while Obama won over those aged 18 to 24. The candidates seem to understand that the Millennials could have a disproportionately loud voice in November and are starting to target them more assiduously. Note the near-comic zigzagging of campaigns after Iowa, when politicians refined their talking points to appeal to Gen Y. Clinton even replaced the oldsters surrounding her on camera during her Iowa concession speech (including a certain former President) with more youthful props at her New Hampshire victory.

"It's Going To Be So Difficult"

Gen Yers have plenty to be exercised about. They're inheriting an economy in which many of the things their parents took for granted are evaporating: company-provided health insurance, attainable housing, Social Security, affordable education, well-paying jobs. Weaned on self-esteem and jacked up on Digital Age entitlement, they take themselves seriously—and expect their elected representatives to do the same. "I think about the costs of having a family, and it's going to be so difficult," says Edward Summers, 25, an Obama supporter and assistant to the president of Marist College in Poughkeepsie, N.Y. "The government needs to intervene to revive the middle class."

At first, the Millennials were the Children of the Rising Dow. They grew up during the greatest period of wealth creation in modern history, but watched their elders consume resources and run up deficits as if the party would never end. Then came the dot-com crash, terrorism, war, climate change. Epic uncertainty informs their worldview. When asked to name the issues they care most deeply about, bread-and-butter concerns such as the economy, health care, and education routinely rank high. In an October Pew Research Center poll, 80% of voters aged 18 to 29 cited the economy as a "very important" concern, vs. 61% who felt the environment was a major issue—a telling finding given all the campus activism swirling around global warming these days.

Talk of recession, a weak dollar, and rising unemployment all animate Millennials' economic angst. But there's a lot more to it than that. Young people may not know that the inflation-adjusted earnings of new college grads have fallen 8.5% since 2000. But they can feel it in the deflated salaries and shriveled benefits they command, even in white-collar jobs. They don't need an economics degree to understand that the middle class is squeezed. This generation has grown up watching parents struggle to stretch a buck. They lived through the mass layoffs during the corporate scandals earlier this century.

"They saw their parents get burned," says Claudia Tattanelli, CEO of Universum Communications, a research firm that specializes in Millennial workplace issues. "They watched 401(k)s that never got paid, parents losing health plans."

Starting Out Behind

As the government and employers shift more responsibility for benefits like health care and retirement onto the shoulders of individuals, many Millennials see themselves as unwitting victims. Although that trend has been building for decades, this may be the first generation to fully feel the great shift of risk in their bones. "This is a group of people who understand what it means to have no safety net," says Elizabeth Warren, a Harvard University School of Law professor and co-author of The Two-Income Trap. "Millennials walk the economic high wire. If nothing goes wrong, they will make it safely to the other side. The slightest disruption—a layoff, an illness—and they are off the wire and falling hard."

That sense of uncertainty is omnipresent for 22-year-old Tessa Jamison. Growing up, the George Mason University senior took ski trips with her family every winter. But after the dot-com bust, her father's insurance business in Virginia Beach, Va., suffered. The family's financial precariousness seemed compounded by the danger Jamison saw around her. She watched a friend's family struggle to pay the mother's monthly $6,000 chemotherapy bill after insurance wouldn't cover it. She saw her grandmother, a teacher for 30 years, unable to make ends meet on her pension and Social Security benefits. Jamison wants to go to law school but fears taking on the massive student loans that would require.

A more apt name for people like her may be Generation Debt. No group has ever started life so deeply in the hole, due mainly to mounting college costs, dwindling financial aid, and credit-card debt. The average college student now graduates with $20,000 in loans. Drew University sophomore Dominique Wilburn, 20, works three jobs—at a bookstore, as a resident assistant in a dorm, and at the school gym—to support herself and pay off her $41,000 debt. "In today's day and age, you have to have a degree, a graduate degree, to be competitive," says Wilburn.

What Millennials want done about student debt depends on which candidate they support. But Wilburn, a Clinton supporter, speaks for many of her peers when she says: "It's a huge issue for our generation and not enough attention is being paid to it."

Yet even a degree does not insulate twentysomethings from the vagaries of a winner-takes-all society. After graduation, Millennials move on to conduct job searches in what has become the new, global discount labor bazaar, competing against their pennies-on-the-dollar counterparts in China and India. Almost every young person you talk to knows a relative or family friend whose job has been sent overseas. Matthew Kracher, a 26-year-old who works for the Massachusetts state government and is leaning in favor of former Republican Governor Mitt Romney, says his sister lives in constant fear of losing her fashion industry job to outsourcing. "Entire companies get up and leave the U.S.," he says. "That's terrible."

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