COVID-19, Millennials, and the Implications of Yet Another Recession

As the days progress, it is becoming rapidly apparent that the consequences of COVID-19 are poised to reverberate through society long after the end of the global health crisis. While all generations are feeling the consequences of this pandemic, Millennials, who lived through the 2008 financial crisis are now being dealt a second staggering wave of economic hardship, making them the first generation in modern American history to end up poorer than their parents. 

While the first economic downturn in 2008 dampened older Millennials’ lifetime-earnings trajectory, this second pandemic-induced recession is poised to sap their paychecks, right as they enter their peak-earning years. Younger Millennials graduating into the recession will suffer the midlife impacts of socioeconomic decline, including “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.” 

Millennials are employed in a large proportion of the industries hardest hit by the consumer economy grinding to a halt. They make up the majority of bartenders, half of restaurant workers, a large share of retail workers, and are heavily reliant on gig and contract work. Studies show that young people entering the labour force in the midst of a recession incur significant initial earnings losses that take years to fade. During the 2008 financial crisis, nearly half of recent graduates were unable to find work. Even as the economy recovered, these graduates were plagued by high rates of joblessness, lower wages, and stagnant earnings trajectories for the following decade. These impacts are further amplified for workers with fewer academic achievements, who will experience even larger and more persistent losses.

As Annie Lowrey writes in her piece, “Millennials Don’t Stand a Chance,” in The Atlantic, this generation was already vulnerable, over-indebted, and underpaid. Millennials 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.” With less savings than prior generations, scant investments, and fewer properties to refinance or sell, the majority of young people in this demographic lack the financial resilience necessary to weather the upcoming economic crisis. Facing the second “once-in-a-lifetime” economic downturn in their fledgling careers, Millennials are likely to carry the compounding impacts of these recessions for decades to come.