Millennials are being hit hard by the coronavirus pandemic. According to an analysis by Ana H. Kent of the Federal Reserve Bank of St. Louis, there are three reasons the pandemic may be a devastating setback for the generation.
Still behind: Millennials are still struggling from the economic effects of the Great Recession, the only generation further behind economically in 2016 than in 2010. The median wealth of Millennials (defined as those born from 1981 to 1996) was a paltry $12,100 in 2016, says Kent. Even among those with a bachelor's degree, median wealth was just $37,500.
No buffer: At the end of 2019, Millennials had less wealth than Gen X or Boomers at the same age. "If Millennials as a group were still behind and struggling financially after so many years of overall growth, a large economic shock (like the one caused by Covid-19) could upend many of their lives," warns Kent. One in four Millennial households has negative net worth, she reports, and 16 percent could not pay for a $400 emergency expense by any means.
Big losses: Already economically fragile, the Millennial generation has been especially hurt by job losses during the pandemic. Because workers in many of the hard hit industries such as food service, leisure, and hospitality are younger than average, Millennials are suffering more unemployment than older generations.
"Young adult Americans are facing very serious economic upheaval," Kent concludes. The good news, she says: they still have time to recover.
Source: Federal Reserve Bank of St. Louis, Three Reasons Why Millennials May Face Devastating Setback from Covid-19
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