She and her partner, Adam Tuthill, welcomed their second child in late January. They were earning quite well and hoping to buy a house in the next year.
“I feel like my generation hasn’t just taken breaks,” said Friend, who also hoped to start attending college classes this year. “When I graduated from high school in 2008, it was a recession. Now, here I am, I just started a family and basically I’m in another recession.”
“Millennials as a whole have been more vulnerable,” said Ana Hernandez Kent, political analyst at the Federal Reserve Bank of St. Louis. “Especially for those who have lost their jobs, lost their income and therefore don’t have a safety net of wealth to fall back on, they could really, really suffer from it and be difficult to recover.”
The long shadow of the 2008 financial crisis
Many millennials came of age at the worst possible time, when the economy collapsed after the 2008 financial crisis. That recession has dragged older millennials for years, making them the only age group to fall below expectations both for income than for wealth in 2010, only to decline further in 2016, according to research by the St. Louis Fed.
Those without university degrees went even worse. Their income was 9% lower than expected and their wealth was 44% lower. Likewise, black and Hispanic millennials typically have less wealth and income than their white peers.
More recent 2019 Federal Reserve data show that average millennial wealth has never reached Generation X level at the same age, said William Emmons, the center’s chief economist, although their incomes and retirement savings rates have improved .
Student loans are part of the problem. The young families had a school debt of $ 1,415, on average, in 1989, according to a calculation by the Urban Institute of Federal Reserve data, according to which those between 18 and 29 years old. That charge rose to $ 13,039 by 2016.
Another reason why millennials are less wealthy than generations before their age is that they have lower home ownership rates, which is often the key to building equity.
Only 43% of millennial families owned homes in 2016, compared to 51% of generation X at the same age and 49% of baby boomers, according to a study by the Federal Reserve Government Accountability Office data published in December.
“Young families will be under a lot of pressure through this experience,” said Reid Cramer, an elderly member of New America who headed the think tank’s Millennials Initiative.
The new success of the coronavirus
Brianna Garcia had hoped to get a better paid job this spring, but the positions she requested disappeared after the arrival of the coronavirus in the United States. While she is still employed as an administrative assistant in a medical clinic and her hometown of San Antonio, Texas does not appear to have been hit hard economically, the 26-year-old is worried about having to face even more competition once businesses have They reopen.
“There is already too much to tackle under normal circumstances, in addition to this further pressure from the pandemic, the economy and its turmoil,” said Garcia, who was the first of her family to graduate but cannot afford to move from home. of his parents. “I don’t really know what will happen to me.”
Those who have good jobs want to make sure they keep them. The prospect of a deeper recession and a slow recovery is pushing new rounds of layoffs beyond the initial cuts in restaurants, bars, hotels and entertainment venues.
Although he is now telecommuting, Scott Larsen is dedicating extra hours and is involved in further projects in his job as marketing manager for a health and beauty company. He is trying to make himself as vital as possible to his employer, who traditionally did not allow staff to work remotely.
However, he believes the economic turbulence caused by the pandemic is further delaying him in pursuing career advancements, saving for the future and buying a home. It is a stark contrast to his parents, with whom he lives in Payson, Utah. Although they are retired, they continue to feel financially secure.
“At first I wasn’t exactly in an ideal place and now I’m going to step on the water,” said Larsen, 29. “Now is not the time to ask for a raise.”
Some good news
Millennials, however, have some factors that work in their favor. They are more educated than previous generations and still have time to build wealth and earnings, as Gen X did after the Great Recession.
Those born in the 70s are now well on their way in terms of income and, although their net worth remains below expectations, it has increased significantly in the years following the financial crisis.
“They were fortunate in that they were young enough to really double their efforts and try to recover,” said Emmons.
For Sarah Clinton, the coronavirus epidemic has meant new opportunities. Social worker, Clinton had long thought of hiring some private patients, but was generally too tired after driving up to four hours a day for her main homeless counseling job.
Now, however, the Waltham, Massachusetts resident works from home and has more time. Also, there is a need for therapists these days because so many Americans are struggling with depression and anxiety in the midst of the pandemic. So she joined a practice and will see several customers a week via telemedicine.
The massive shift to telework triggered by the coronavirus can lead to even bigger changes in Clinton’s life. She and her husband wanted to buy a house but could not afford it in an area reasonably close to their work. Now that they both work from home, they realize that they may be able to explore cheaper neighborhoods that are further away.
“Maybe living in the middle of nowhere is okay, maybe we could telecommute,” said Clinton, 35. “I feel like we can dream a little more. There are more possibilities.”