A New Yorker walks past a mural by french photographer JR on April 20. Here’s a brutal statistic : One poll found 52 percent of Americans under the age of 45 have either lost their job, been put on leave, or had their hours dramatically cut as a result of the coronavirus pandemic, compared to 26 percent of people over the age of 45. In other words, millennials are going to bear the brunt of this economic crisis, just as they did in 2008. The Great Recession upended the economy as many millennials were entering the labor force for the first time. The pandemic and the resulting economic shock have hit as many are entering their 30s and could erase any gains they’ve made. […]
Annie Lowrey, an economics writer at the Atlantic and the author of Give People Money: How A Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World, argued in a recent piece that millennials are essentially “a lost generation,” having entered the labor force during the Great Recession in 2008 and now facing a second “once-in-a-lifetime downturn.”
Millennials, Lowrey argues, have never really had any economic security, and this pandemic all but guarantees “that they will be the first generation in modern American history to end up poorer than their parents.”
I spoke to Lowrey about what makes the plight of millennials “unusually bad,” why this crisis is especially devastating for young workers, and if she thinks millennials have a chance to escape the financial precarity that has defined their lives so far.
A lightly edited transcript of our conversation follows.
Every generation seems to get screwed economically, at least once or twice. What’s unique about the plight of millennials?
You’re definitely right about that, and I’m not trying to hold a misery Olympics here. I don’t even think millennials are a historically screwed generation compared to all the generations that preceded us going back to time immemorial. But it’s also true that there’s a huge economic body of literature that shows that graduating into a recession, like millennials did in 2008 and 2009, is unusually bad.
The word they use in the economic literature is “hysteresis,” which basically just implies a scarring. So you get these scars in the labor market and it takes a very long time to heal. If you graduate into a recession, for example, it leads to high unemployment and large earnings losses at the time, which you would expect. And then, it leads to lower earnings trajectories for decades and even a lifetime, which is maybe more unexpected. It basically means that you don’t rebound in the way that other people rebound.
So all this means that millennials have not had the same wealth trajectory compared to previous generations. And you can see this when you compare their wealth at the same point in their life cycle with older generations — millennials are just doing worse. And that’s after a decade of economic growth.
I think there’s something really discomforting in that because it means some kind of stratification on the basis of age, but it also means that decades of economic advancement didn’t do anything for a whole generation of people.