“Even going into this situation, young adults were in a very precarious situation,” said Reid Cramer, who led the Millennials Initiative at New America think tank. “A sudden shock is really going to have a pretty big impact on this generation.”
Part of their vulnerability comes from the fact that millennials are much more likely to be involved in part-time work and the gig economy. According to government reports, these kinds of businesses have been hard hit by the crisis. More importantly, this kind of work provides few benefits to help soften the blow of hard times. (Related: Could America soon be facing widespread STARVATION due to the coronavirus and a collapsing food supply?.)
“Over time, it is becoming more difficult for young families to accumulate wealth,” said William R. Emmons, lead economist at the St. Louis Federal Reserve’s Center for Household Financial Stability. “We thought maybe they’d catch up later, but the current situation doesn’t give me much reason to believe that’s going to happen.”
Compounding this is the persistent issue of millennial debt. According to the New York Federal Reserve, student debt held by Americans alone hit nearly $1.5 trillion in March of 2019. This was twice the amount that Americans owed a decade earlier.
Meanwhile, a more recent survey by Morning Consult showed that many millennials also owe a significant amount in mortgage loans. Of those surveyed, 23 percent owe $50,000 to $100,000 in mortgages, while more than half owe more than $100,000.
The 2007 crisis also had another effect on millennials -- it made them much more reluctant to invest in the stock market. The St. Louis Federal Reserve reports that millennials, on average, have only one third the stock market holdings that Generation X did before the 2007 crisis.
This lower amount of investment by millennials means that they have not enjoyed the market gains from that have been made over the past decade. As a result of this, according to an analysis by economists at the St. Louis Fed, Generation X has about four times the assets and twice as many savings as millennials do.
While the millennials look to be the most vulnerable generation in the current economic crisis, this doesn’t mean that they’re the only affected by such issues. In terms of unemployment, according to a Reuters report, the jobless rate for people aged 25 to 34 rose by just 0.4 percentage points. However, for people aged 45 to 54, unemployment went up by 0.7 percentage points. While this still puts their total unemployment at 3.2 percent, the lowest of any age group, the larger increase compared to the generation after them could warn of this age group’s vulnerability to job loss, should the economic shutdown continue.
Those over the age of 50 also face their own unique economic challenges in this crisis. According to the American Association of Retired People’s Public Policy Institute, over 51 percent of Americans over 50 lack an emergency savings account. Even for those who have $150,000 or more in household income, 25 percent still don’t have such an emergency savings account.
Those 50 and over have far fewer working years left to pay off debt and rebuild savings. While millennials may have less money in the short term, they can eventually rebuild in the long run -- a luxury older workers don’t have.