Children of the Great Recession
Source: Tech.co It’s beyond doubt that the big financial crisis of 2008 and the recession that followed has shaped the lives and characters of the Millennial generation. They have grown up in a world which is so very different from the society which produced the ‘Baby Boomers’ - the generation to which our older adults belong. Ten years on from that great global downturn, it’s perhaps time to start assessing how these millennials are actually faring in comparison to the rest of us.
The job market
In the age of austerity which followed the financial crash of 2008, it has been hard for millennials to find much to celebrate. When businesses made cuts to stay afloat it was often the job prospects of younger adults which suffered most. Investment cutbacks limited the numbers of young people able to secure meaningful jobs with career pathways. This situation was reflected in unemployment statistics: In the US, for example, between 2007 and 2009, the unemployment rate for those in the 16-24 age bracket soared upwards by almost 8 percentage points to reach 19%, while the rate for other age groups only increased by little more than 5%. When making comparisons with older generations, it must also be appreciated that the majority of millennials left university saddled with massive student-loan debt. This has seriously disadvantaged their economic prospects and left them with a financial burden many kaftan-clad Baby Boomers (some of whom received educational grants) could never have imagined. Once again, statistics tell the story: The Project on Student Debt tells us that, in 2008, around 66% of US students left college with a student loan debt (averaging $23,200). Yet as recently as 1996, only 58% needed loan support, and left with an average loan balance of only $13,200.
Saving for the future
Already treated as poor relations in the job market, many millennials were soon to discover that their future prospects might not look particularly bright either. Wealth building, it seems, has proved remarkably difficult for many. With the generous pensions paid to Baby Boomers seeming like a fairy tale, those in employment today and trying to set up some provision for the future are often stuck in low-paid work with no occupational pension of any kind. The National Institute on Retirement Security reports that 66% of millennials in work have no retirement savings, mostly due to severe wage restraints as well as periods of unemployment following the 2008-2009 recession. So, it’s no surprise to hear the Federal Reserve Bank of St. Louis comment that an average millennial now has 34% less family wealth than was enjoyed by the same age group in earlier generations. Source: Washington Monthly
Despite their superior computer and technology skills, which enhance their enjoyment of social media and casino online games, millennials find their financial stability much diminished since the crisis. More concerned with staying afloat than putting down roots, they are understandably fairly reluctant to take on any further long-term debt by entering the residential property market. Thus, the rate of home ownership is now falling as this new risk-averse generation who have grown up with uncertainty put off all the big financial decisions until sometime in the future when they just might feel better off. In fact, as the Huffington Post puts it, they are ‘delaying partner-marrying, house-buying and kid-having for longer than any previous generation.’ Nevertheless, in terms of personal relationships, there may be some better news in store for those who have fought and slain the dragon of austerity. It appears that today’s young women are far more likely to stay married than those of the Baby Boomer era. Reflecting this trend, US divorce rates are now falling and all the signs are that this will become a continuing trend. So if millennials at least have the power of love working in their favour, let’s hope another decade may bring them some brighter prospects.