While the pandemic has cut a huge swath through what had been thriving U.S. activity, the hit to those born between 1981 and 1996 has been especially brutal.
The reason why the crisis has been even more difficult for millennials comes down to three issues, according to St. Louis Fed policy analyst Ana H. Kent: lasting fallout from the financial crisis, small financial cushions to absorb this type of emergency, and disproportionate job reductions compared to other demographics. The nonfarm payrolls report for April indicated that of the 20.5 million jobs lost during the month, 7.
"Young adult Americans are facing very serious economic upheaval," Kent wrote in a research paper. "Millennials' financial fragility hurts not only these individuals, their families and others who rely on them but also the economy as a whole." Despite a personal savings rate that mostly stayed above pre-crisis levels throughout the 11-year recovery, many American families found themselves in precarious financial standing at the start of the coroanvirus shutdown. For millennials, it was even worse.
Recent surveys have shown that 1 in 4 millennial families have debts that outweigh their assets, a condition known as negative net worth. One in six say they wouldn't be able to raise enough cash"For those experiencing job loss, these emergencies can prove catastrophic without sufficient financial cushion," Kent wrote..
Looking at job losses as a percentage of the workforce, Hispanics, women and those without a college degree suffered the most, especially in the initial March layoffs. The situation breaks down similarly for those who say they can't handle a short-term emergency, with 32% of black millennials and 20% of Hispanic millenials in that situation."The good news, though, is that while not as young as they were during the Great Recession, millennials still have time to recover," she said.
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