Home Business History’s Most Unlucky Generation: How Millennials Survive Another Economic Crisis

History’s Most Unlucky Generation: How Millennials Survive Another Economic Crisis

Katy Perry, Justin Bieber, Serena Williams, Mark Zuckerberg, Evan Spiegel. These people and the remaining 72.1million Americans form the millennial generation that has witnessed two dramatic economic downturns. A generation characterized by two major financial crises—the Great Recession and the Coronavirus Pandemic. With the latter redefining social interaction, can only be defined statistically as ‘unlucky.’

The oldest Millenials today are about 40 years old, and they became adults in a world. That almost collapsed employment. Collapsed the already feeble real estate market, and left them with unpaid student loans of the size their parents’ generation never could imagine.

Today, it is easy to talk about the Great Recession with undue calm. At the peak of the great recession, Wall Street investment bank Lehman Brothers filed for bankruptcy. The unemployment rate peaked at 10% in October 2009, the Federal Government scrambled to bailout Insurance company AIG. All consumption components had a precipitous decline, and between 2007 and 2010, 3.8million people lost their homes to foreclosures.

The Great Recession led to the Millenials’ Increased Distrust in the Housing Market

For the Millenials (people born between 1981 and 1996), the Great Recession occurred at a time when some had just finished college. That would help pay off student loan debts and begin achieving life milestones. However, with high unemployment, low household income, drastic inflation, and growing debts. The jobs were not forthcoming and milestones seemed miles away.

Given that the Great Recession occurred due to the Housing Bubble Burst caused by banks, Wall Street, and a lack of oversight by the government. It is only normal for the Millenials who have experienced the recession to grow wary and pessimistic towards real estate. Generations before the Millenials, in the United States, relied on certain institutions for stability. Generation Xers, for example, took on student loans, knowing. That they would be able to pay up their debts after they graduate—and they did. Many Generation Xers began accumulating wealth after college. However, they were left in a pool of unpaid debts for the Millenials. And had not-so-many options for clearing out their student loans. Let alone, purchasing their own homes.

Millennials fought:

Still, some millennials have fought their way to success amid the chaos and do choose to invest in real estate as part of their portfolio. When asked why most other millennials are delaying home buying, Eric Leopardi, a 32-year-old TV Voice and CEO of Colorado-based. The Micc Group replied, “I think it’s just not a priority like it was for the generation before us,” says Leopardi. Who has amassed a net worth north of $10million including real estate in the Denver-area?

“Millennials seem to appreciate flexibility, they value experiences and travel, and many are investing in their own businesses. I think they trust their own ingenuity more than traditional markets—and you can’t blame them”. It seems millennials view wealth building through a very different lens than their parent’s generation.

The housing institution:

The housing institution was a benchmark for stability. However, the recession, caused by a multitude of poor institutional and regulatory decision making. According to Business Insider, the Millenials began savings at an earlier age than their parents. Yet due to the lingering effects of the Great Recession, inflation increased consumer spending and debt-attitude. They do not have as much wealth as their parents. Their path to wealth accumulation is far harder than generations before them.

For Generation Xers and the Baby Boomers, wealth building was a culture. The Federal Reserve Bank of St. Louis revealed alarming statistics: the average Millennial’s wealth is 34% lesser than the respective wealth of Generation Z and the Baby Boomers at the same age.

A Relatively Higher Debt than Previous Generations

Amongst the last four generations, Generation Z, Millenials, Generation X, and Baby Boomers, Generation X had an average debt of $36,000. While the Millenials had an average non-mortgage debt of $27,900. Their debt level is higher than all other generations’ debt-level when placed on a relative scale. The oldest millennial will celebrate his 40th birthday in 2021. Imagine a 30 – 40-year-old owing an average of $28,000 from unpaid student loans, credit card, and automobile debt while simultaneously having a lower relative spending power than all previous generations.

Jung Hyun Choi, a Research Associate at Urban noted that a ‘High debt spread across the Millenials’ influences their decision to seek investment opportunities with an immediate. And the high return on investment- ROI, like cryptocurrency, dropshipping, and social-media centred businesses. Millennials have tapped into social media, cryptocurrency, and every other non-traditional means of making money the most. “I invested in starting The Micc Group over 10 years ago in my early 20’s—and it wasn’t my first business,”. Says Leopardi, “Coming out of the Great Recession. It was clear to me I needed to take control of my own income. Many of my clients are millennial business owners too, and quite a few of them also invest in crypto”.

The Pandemic Hit Main Street

The Global Pandemic has, so far, caused over 330,000 deaths, with more than 18 million people infected across the United States. While the mortality figures show those who have lost their life to COVID-19. There is a much larger financial, social, and economic mortality rate.

Unemployment rates, within the three months of the pandemic, rose above unemployment rates in the two years of the Great Recession. The economic recession of 2020 is not an internally caused crisis. It’s not factored on the poor decisions of the Big Banks or lackadaisical government. The U.S. is dealing with a situation that has gone out of control, and millions of people have lost their jobs and businesses.

U.S. labour force

The U.S. labour force relies on medium and small businesses for the bulk of their employment. More than 40% of the U.S. population are employed by these businesses. The lockdown measures have essentially cut off more than 30 million businesses nationwide. While most businesses struggle to stay afloat, others simply cannot afford workers’ salaries. According to Pew, unemployment rates may have risen to 16% in May 2020—The highest ever seen since the Great Depression during the 1930s.

For the Millenials, the Global Pandemic is yet another economic crisis—and this time, it hits harder than 2008. Unlike the Great Recession that led to the bankruptcy of many Wall Street financial institutions, the pandemic is affecting the lives and livelihood of the average American. ‘In the Great Recession, the policymakers could summon the CEOs of the top 25 financial institutions into a room and literally hand out their bailout cheques,’ says Campbell Harvey, Duke University economist. Today, it’s the local cook who has lost his job because his boss’s restaurant has been locked up since March.

A Way Forward

While the Great Recession and the Global Pandemic—two disastrous economic events, took place in the millennial generation, it’s certainly not a pity party. The Great Recession, combined with the internet revolution has shaped the way these people think, act, buy, sell, and interact. “Millenials are social connectors, and most institutions realize that a social media campaign coupled with a personal touch will go a long way. That’s why startups can successfully crowdfund on Kickstarter. It’s thrilling, communal, and sort of bucks the traditional system.” Says Eric. “But wealth building is essential for societal development. The most important thing is that millennials save and invest in something. It isn’t one-size-fits-all”.

Institutions are created to ensure stability and after the Great Recession. Policymakers strengthened oversight on Wall Street. A nation cannot always avert economic disaster. But these disasters are typically spread between centuries. Therefore, Millennials, need to understand the impact of wealth building on their generation and are forced to be more fiscally savvy than their parents.

Wealth Building and Social Media

Millennials today are more inclined to invest in, and purchase from institutions with a high social media presence. There is certainly an advantage tech companies have over non-tech. According to Forbes, ‘Fifty-seven per cent of Millenials discover fashion trends on social media, and they are expected to spend $1.4 trillion in 2020.’ While technological advancement in the housing industry is not yet explosive; many tools like Trulia, Zillow, and Realtor.com, have made the real estate market more accessible—especially to Millenials.

The Millenials are a generation of people with amazing creative potential. When the Great Recession threw young college-graduates into an unusual world of joblessness. The Millenials became creative. Social media corporations, crowdfunding platforms, and cryptocurrency are some of the millennial’s innovative expressions and stabilizing force. But while innovation is fluid. A generation must always build a foundation of economic balance, financial responsibility, and wealth.

Millennials never recovered from the good Recession

The Great Recession pushed young workers a couple of steps down the wage ladder. Research shows they never recovered, whilst their older colleagues regained all the bottom they’d lost. It’s happening again, to several of these same young workers.

In a 2019 working paper, Bureau of the Census economist Kevin Rinz is used regional differences within the Great Recession’s severity to calculate. Millennial employment recovered from the good Recession within a decade, millennial earnings never did. Building on earlier work from the University of California at Berkeley’s Danny Yagan, Rinz based his findings on quite a dozen years of annual data for quite 4.1 million people during a government database.

abubakarbilal
abubakarbilal
Abubakar is a writer and digital marketing expert. Who has founded multiple blogs and successful businesses in the fields of digital marketing, software development. A full-service digital media agency that partners with clients to boost their business outcomes.

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