WASHINGTON–Millennials, whose financial prospects took a hit by entering the workforce just as the financial crisis was raging or the economy was seeking to recover, are now being hit again, this time by the coronavirus pandemic.
Millennials, born between 1981 and 1996, are already indebted and a step behind on the career ladder, and “this second pummeling could keep them from accruing the wealth of older generations,” reported the Wall Street Journal.
The Journal, whose report profiled a number of Millennials and their struggles with debt and other financial issues, noted 4.8 million Millennials who have lost work, according to who the Federal Reserve Bank of St. Louis. “The group had more losses than the two previous generations,” the Journal stated.
The 12.5% unemployment rate among Millennials is higher than that of Generation X (born between 1965 and 1980), and Baby Boomers (1946 to 1964), according to May figures from the Pew Research Center.
One reason is that some of the hardest hit industries, including leisure and hospitality, have a younger workforce, the Journal added.
‘Fundamentally More Difficult’
“Millennials have found it fundamentally more difficult to start a career and achieve the financial independence that allowed previous generations to get married, buy a home and have children,” the reporter stated. “Even the most educated Millennials are employed at lower rates than older college graduates, research shows, and Millennials’ tendency to work at lower-paying firms has caused them to lag behind in earnings.”
“As a result, the Millennial generation has less wealth than their predecessors had at the same age, and about one-quarter of Millennial households have more debt than assets, according to the St. Louis Fed,” the Journal stated.
The Journal noted Millennials on average missed out on more than $25,000 in pay, or 13% of their total earnings, during the decade that ended in 2017 as a result of the rising unemployment rate that started in 2007, according to an analysis published last year by Census Bureau economist Kevin Rinz.
Earnings Reductions
“That was a greater share than Gen X, which had their earnings reduced 9% over that time, and Baby Boomers, which didn’t get 7%,” the Journal reported. “That’s mainly because Millennials were less likely to work for high-paying employers than older Americans.”
Rinz said he found younger workers’ employment rates recovered more quickly than those of older workers.