Millennials Hit Hard
The coronavirus pandemic has had an economic impact that is immense—tens of millions unemployed, and the U.S. economy shrinking at an alarming rate. It’s unlike anything we’ve seen in more than a decade. The state of affairs is such that the International Monetary Fund is warning that Covid-19 could trigger a global economic slowdown comparable only to the Great Depression.
One group that is most likely to suffer is Millennials. Today’s youth are already saddled with a mountain of debt. They are barely recovering from the 2008 Recession. The other factor is that older folks may have a cushion of wealth to fall back on, while the younger generation hasn’t had time to accumulate that safety net.
To put things in perspective, there was a New York Federal Reserve study that revealed that astoundingly high debt numbers are connected to Millennials. Not only that, but it also reveals that those born between 1981 and 1996 have relatively conservative financial habits compared with their older counterparts.
Another factor is the diversity of the demographic with about 44 percent being people of color. This means that their economic situation is more broadly affected by financial inequalities than older generations.
Millennials as a whole are showing economic anxiety about basic needs, including covering the costs of food and shelter. This would back up the notion they don’t have a lot of savings or wealth on which they can depend. In early April, 60 percent of Millennial-registered voters told pollsters at Quinnipiac University that the pandemic has them concerned about being unable to afford food, rent or mortgage, or medical expenses.
Student-loan debt has reached record levels because of the cost of college, which has more than doubled since the 1980s. As of 2019, student-loan debt reached a national total of $1.5 trillion, according to Student Loan Hero.
Another reason that the pandemic has caused such havoc in the Millennial community is that they work disproportionately in industries hit hardest by the recent lockdowns. Every industry has been affected by layoffs, but looking at the data from March, it is clear that the leisure and hospitality industry (which includes hotels, nightclubs, and restaurants) alone lost 459,000 jobs. And let’s be honest — nightclubs aren’t very high on the list of essential businesses and certainly won’t be the first places to reopen. They are by definition the polar opposite of social distancing.
Most of those out of work were fortunate that the government stepped in with a lifeline of an additional $600 per week on their unemployment checks. But that geyser of assistance is set to end on July 31st. So that begs the question—what will their financial state be, come August?
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