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  [44]Ideas

                      Millennials Don’t Stand a Chance

  They’re facing a second once-in-a-lifetime downturn at a crucial
  moment.

  April 13, 2020


  [45]Annie Lowrey
  Staff writer at The Atlantic

  An illustration of the letter M with torn images. Getty / The Atlantic

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  Hello, lost generation.

  The Millennials entered the workforce during the worst downturn since
  the Great Depression. Saddled with debt, unable to accumulate wealth,
  and stuck in low-benefit, dead-end jobs, they never gained the
  financial security that their parents, grandparents, or even older
  siblings enjoyed. They are now entering their peak earning years in the
  midst of an economic cataclysm more severe than the Great Recession,
  near guaranteeing that they will be the first generation in modern
  American history to end up poorer than their parents.

  [46]Read: Generation C has nowhere to turn

  It is too soon to know how the unfurling business-failure and
  unemployment crisis caused by this novel public-health crisis is
  hitting different age groups, or how much income and wealth each
  generation is losing; it is far too soon to know how different groups
  will rebound. But we do know that Millennials are vulnerable. They have
  smaller savings accounts than prior generations. They have less money
  invested. They own fewer houses to refinance or rent out or sell. They
  make less money, and are less likely to have benefits like paid sick
  leave. They have more than half a trillion dollars of student-loan debt
  to keep paying off, as well as hefty rent and child-care payments that
  keep coming due.

  Compounding their troubles, Millennials are, for now, disproportionate
  holders of the kind of positions disappearing the fastest: This is a
  jobs crisis of the young, the diverse, and the contingent, meaning
  disproportionately of the Millennials. They [47]make up a majority of
  bartenders, half of restaurant workers, and a large share of retail
  workers. They are also heavily dependent on [48]gig and contract work,
  which is evaporating as the consumer economy grinds to a halt. It’s a
  cruel economic version of that old Catskill resort joke: These are
  terrible jobs, and now all the young people holding them are getting
  fired.

  [49]Annie Lowrey: The great affordability crisis breaking America

  What little data exist point to a financial tsunami for younger
  workers. In a [50]new report, Data for Progress found that a staggering
  52 percent of people under the age of 45 have lost a job, been put on
  leave, or had their hours reduced due to the pandemic, compared with 26
  percent of people over the age of 45. Nearly half said that the cash
  payments the federal government is sending to lower- and middle-income
  individuals would cover just a week or two of expenses, compared with a
  third of older adults. This means skipped meals, scuppered start-ups,
  and lost homes. It means Great Depression–type precarity for prime-age
  workers in the richest country on earth.

  Recessions are not good for anyone, from infants to the elderly. Nor
  are pandemics. Americans born during this calamity will be [51]more
  likely to have low birth weights and to be in poor health generally,
  with lifelong effects. Children will not just endure this
  trauma—manifested in lost months of schooling, skipped meals, housing
  volatility, and increased abuse—but will [52]carry it with them.
  Zoomers graduating into the recession will [53]die sooner because of
  it, suffering increased incidence of heart disease, lung cancer, liver
  disease, and drug overdoses in the coming decades; they will also earn
  less over the course of their lives. The elderly are likely to be the
  most economically [54]insulated group but are facing the most
  terrifying health consequences.

  Among adults the news isn’t good, either. And particularly not for
  those youngish-but-no-longer-young adults who came into this crisis
  already vulnerable, already fragile, already over-indebted and
  underpaid. The Millennials were left with scars during the Great
  Recession that never quite healed, and inherited an economy structured
  to manufacture precarity for the young and the poor and black and
  brown, and to perpetuate wealth for the old and the rich and white.

  [55]Ibram X. Kendi: What the racial data show

  For the most part, kids of the 1980s and 1990s did it right: They
  avoided drugs and alcohol as adolescents. They went to college in
  record numbers. They sought stable, meaningful jobs and stable,
  meaningful careers. A lot of good that did. Studies have shown that
  young workers entering the labor force in a recession—as millions of
  Millennials did—absorb large initial earnings losses that [56]take
  years and years to fade. Every 1-percentage-point bump in the
  unemployment rate costs new graduates 7 percent of their earnings at
  the start of their careers, and 2 percent of their earnings nearly
  [57]two decades later. The effects are particularly acute for workers
  with less educational attainment; those who are least advantaged to
  begin with are consigned to [58]permanently lower wages.

  Slogging their way through the aughts, avocado toast in hand, the
  Millennials proved those miserable studies true. During the recession,
  half of recent graduates were unable to find work; the Millennials’
  formal [59]unemployment rate [60]ranged as high as 20 or 30 percent.
  High rates of joblessness, low wages, and stagnant earnings
  trajectories dogged them for the following decade. A [61]major Pew
  study found that Millennials with a college degree and a full-time job
  were earning by 2018 roughly what Gen Xers were earning in 2001. But
  Millennials who did not finish their post-secondary education or never
  went to college were poorer than their counterparts in Generation X or
  the Baby Boom generation. Economic growth, in other words, left the
  best-off Millennials treading water and the worst-off drowning.

  Crummy wages collided with a cost-of-living crisis and heavy debt
  loads. The cost of [62]higher education grew by 7 percent per year
  through the 1980s, 1990s, and much of the 2000s, far faster than the
  overall rate of inflation, leaving [63]Millennial borrowers with an
  average of $33,000 in debt. Worse: The return on that investment has
  proved dubious, particularly for [64]black Millennials. The college
  wage premium has eroded, and for black students the college wealth
  premium has disappeared entirely. While struggling to pay down their
  student loans, millions of younger Americans have also found themselves
  shut out of the real-estate market by housing shortages and attending
  sky-high prices. Rich Boomers bought the houses and made building new
  ones impossible. Millennials were forced to keep on renting,
  transferring wealth from the young to the old.

  [65]Read: The four possible timelines for life returning to normal

  Put it all together, and the Millennials had no chance to build the
  kind of nest eggs that older generations did—the financial cushions
  that help people weather catastrophes, provide support to sick or
  down-on-their luck relatives, start businesses, invest in real estate,
  or go back to school. Going into the 2008 [66]financial crisis, Gen
  Xers had twice the assets that Millennials have today; right now, Gen
  Xers have four times the assets and double the savings of younger
  adults.

  Millennials now are facing the second once-in-a-lifetime downturn of
  their short careers. The first one put them on a worse
  lifetime-earnings trajectory and blocked them out of the asset market.
  The second is sapping their paychecks just as they enter their
  peak-earnings years, with 20 million [67]kids relying on them, too.
  There’s no good news in a recession, and no good news in a pandemic.
  For Millennials, it feels like there is never any good news at all.

  We want to hear what you think about this article. [68]Submit a letter
  to the editor or write to [email protected].


  [69]Annie Lowrey is a staff writer at The Atlantic, where she covers
  economic policy.

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