Millennials, a generation the Pew Research Center defines as those born between 1981 and 1996, are once again—the first fall being in The Great Financial Crisis of 2008 (GFC)—stumbling financially in the current COVID-related economic upheaval (GFC 2). In a recent TD Ameritrade survey, 39% of the youngest Millennials, those 24-29 years old, reported moving back home with their parents. Yet, even pre-COVID, almost 22% of Millennials aged 24-35 lived with their parents, the greatest percentage since the start of the new century.
About 15% of the respondents said they’re on financial life-support, with their parents helping to subsidize rent, while another 15% said their parents are covering all rental expenses.ZeroHedge, 39% Of Younger Millennials Return Home Amid Crushing Recession, August 7, 2020
Millennials, whose parents continue subsidizing their expenses, are often delayed in realizing The American Dream—getting married, buying a home and having children, generally consuming material goods at a rate equal to or greater than one’s parents—prolonging the infantilism of a generation and potentially giving rise to a more intense, visceral generational angst.
An overwhelming majority (82%) said they don’t want to rely on their parents for financial support, but due to the economic downturn, it seems like many have no other choice.ZeroHedge, 39% Of Younger Millennials Return Home Amid Crushing Recession, August 7, 2020
Millennials and now Gen Z’ers, educated in the modern American academic meritocracy, spent their childhoods being tutored, possibly medicated, tested, and coached to earn high grades and curate a resume worthy of a vaunted college acceptance, The Golden Ticket promising lifelong economic prosperity. Yet, now, two major economic shocks in their young lives, The GFC of 2008 and now COVID of 2020 (GFC 2), Millennials are struggling mightily to realize the promise.
Yet, perhaps there’s a silver lining in the most recent retreat into the childhood compound, given the continued unemployment and wage deflation, which may only increase as the US haltingly starts and stops economic activity in response to the whims of the virus that lives in the world of microbiology, creating a rolling health emergency with no end date in site.
A crushing recession could be the best thing for millennials. Allows them to move home, save money, pay down pesky auto loans, credit card debt, and student loans. So by the time the next economic upswing starts, their debt loads will be low, allowing them more economic mobility.ZeroHedge, 39% Of Younger Millennials Return Home Amid Crushing Recession, August 7, 2020
And, side note, 15.1 Millennials borrowed student loans to pay for their college expenses, averaging $33,000 per borrower. Yet, despite the Federal student loan relief, or deferred payments and suspended student loan interest, just extended through the end of 2020 by President Trump’s August 7, 2020 executive order, Millennials are still suffering financial setbacks, further diminishing their promised economic prosperity from earning a college degree.
While no parent wants their children to suffer, so willingly or out of a sense of obligation, many pony up the cash to help their adult Millennial children in these extraordinary times, yet often at the cost of their own financial security in retirement. And, yet the longer the last of the Baby Boomer and the Gen X’er parents linger in their jobs, unable to afford retirement, Millennials and soon Gen Z’ers will have even less opportunities to obtain a job for achieving The American Dream, a Catch-22 for sure.
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