He and his partner, Adam Tuthill, welcomed their second baby at the end of January. They make very good money and hope to buy a house in the coming year.
Then the coronavirus pandemic attacked and canceled their plans. Friend, 30, took time off from work in the bakery section of a restaurant in mid-March and has struggled, like many people, to get all his unemployment benefits. Tuthill, 38, sees his business as an independent commercial fisherman drying out during the most lucrative season.
“I feel like my generation just didn’t get a break,” said Friend, who also hopes to start taking 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.”
While Americans of all ages are hit hard by the economic turmoil triggered by a coronavirus outbreak, the millennium is very risky. Now between 24 and 40 years old, they have a much smaller financial cushion than the previous generation of their age to protect them from job loss and economic uncertainty.
“Millennials as a whole are more vulnerable to this,” said Ana Hernandez Kent, a policy analyst at the Federal Reserve Bank of St. Louis. “Especially for those who lost their jobs, lost their income, and then did not have a safety net of wealth to return, they can really suffer from this and find it difficult to recover.”
Earlier this year, CNN noted the poor conditions of the millennials, who are on track to become the first generation to not exceed their parents in terms of employment status or income, studies show. More than a dozen wrote about their struggles to get well-paid jobs, manage their student loans and buy houses. Some feel the high cost of living prevents them from starting their own families.
The long shadow of the 2008 financial crisis
Many millennials came at their worst – when the economy collapsed after the 2008 financial crisis. The decline has trailed the older millennia for years, making them the only age group to fall below expectations for income and wealth in 2010 and then dropped even further in 2016, according to research from Fed St. Louis.
The average millennial family born in the 1980s has collected a average net worth
only $ 23,200 in 2016, 34% lower than expected, and an average income of $ 51,200, 3% below projections, researchers at the St. Louis Fed Household Financial Stability Center found.
Those who do not have a college degree are even worse. Their income is 9% below expectations and their wealth is 44% lower. Likewise, black and Hispanic millennials usually have less wealth and income than their white counterparts.
More recent Federal Reserve data from 2019 show that the average wealth of the millennium never reaches Generation X levels at the same age, said William Emmons, the center’s main economist, even though their income and retirement savings rates have risen.
Student loans are part of this problem. Young families had $ 1,415 in education debt, on average, in 1989, according to Federal Institute calculations from Federal Reserve data, which showed that they were aged 18 to 29 years. The burden jumped to $ 13,039 in 2016.
Another reason why millennials are less wealthy than previous generations of their age is that they have lower levels of home ownership, which is often the key to building net worth.
Only 43% of millennial households own a home in 2016, compared to 51% of Generation X of the same age and 49% of Baby Boomers, according to a Federal Reserve Government Accountability Study. data published in December.
The corona virus pandemic, which caused the loss of more than 20 million jobs in April alone when states required residents to stay at home and businesses that were not essential to be shut down, threatened to make the millennium return even more.
“Young families will get a lot of pressure through this experience,” said Reid Cramer, a senior fellow in New America who leads the Millennials Initiative of the think tank.
New hit from Coronavirus
Brianna Garcia hopes to get a better-paying job this spring, but the position she applied for disappeared after the coronavirus arrived in the US. While he still works as an administrative assistant in a medical clinic and his hometown in San Antonio, Texas, apparently not being economically hit, the 26-year-old worries that he will face more competition once more businesses open again.
“There is already too much to fight under normal circumstances, on top of this additional pressure from the pandemic and the economy and the shakiness,” said Garcia, who was the first in his family to graduate from college but unable to get out of his parents’ home. “I don’t really know what will happen to me.”
Those who have good jobs want to make sure they keep it. The prospect of a deeper decline and a slow recovery pushed the new round of layoffs beyond initial cuts in restaurants, bars, hotels and entertainment venues.
Even though he’s telecommuting now, Scott Larsen adds time and is involved in additional projects at his job as a marketing manager for a health and beauty company. He tried to make himself as vital as possible for his employer, who traditionally did not allow staff to work remotely.
However, he felt the economic turmoil caused by this pandemic increasingly delayed him in pursuing career advancement, saving for the future and buying a home. This contrasts sharply with his parents, with whom he lives in Payson, Utah. Even though they are retired, they continue to feel financially secure.
“I’m not in the ideal place to start and now I’m just going to step on water,” said Larsen, 29. “Now is not the time to ask for a raise.”
However, Millennials have several factors that benefit them. They are better educated than the previous generation and still have time to build wealth and income, as did Gen X after the Great Recession.
Those born in the 1970s are now on the right track in terms of income, and while their net worth has remained below expectations, it has increased rapidly in the years following the financial crisis.
“They were lucky because they were young enough to really redouble their efforts and try to recover,” Emmons said.
For Sarah Clinton, a coronavirus outbreak means new opportunities. A social worker, Clinton has long thought about taking some private patients but is usually too tired after driving up to four hours a day for her main work advising homeless people.
However, now, residents of Waltham, Massachusetts, work from home and have extra time on their hands. Plus, there has been more need for therapists lately because so many Americans are grappling with depression and anxiety in the midst of a pandemic. So he joined the practice and will meet several clients a week via telehealth.
The big shift to telecommuting that was triggered by coronaviruses could lead to greater changes in Clinton’s life. She and her husband want to buy a house but cannot afford to buy a house in an area that is close enough to their work. Now that both of them are working from home, they realize that they might be able to explore a cheaper environment that is further away.
“Maybe staying in the middle of nowhere is okay, maybe we can telework,” said Clinton, 35. “I feel like we can dream a little more. There are more possibilities.”