Millennials, or generation Y, are those born between the early 1980s and the late 1990s or early 2000s. Typically, these have been good years to be born in Europe, providing millennials with the benefits from the information age, with the rise of industrialisation, technology and social media. However, the 2008 financial crisis; the euro-zone crisis which saw a wave of unemployment across Europe, and now the 2020 COVID-19 pandemic, have had millennials second-guessing their luck. As The Economist points out, ‘all generations suffer during crises’, with older adults most at risk of contracting the virus. Despite this, younger people will be left with long-term consequences, even after the pandemic is over. For Southern Europe’s youth, COVID-19 seems to bring an abyss which will be difficult to get out of, with job shortages, housing shortages and economic unrest.
With Europe already lacking jobs for post-graduates and first-time career seekers, COVID-19 has made job prospects even slimmer. Economic downturns are inevitable, but they are not usually this severe, with the IMF warning that the global recession after COVID-19 will be the deepest for the best part of a century. Lockdowns have slammed countries that depend on labour-intensive activities, particularly those with large construction sectors. Unemployment is on the rise, with companies such as British Airways making up to 45,000 people unemployed.
In the UK, figures from the Office for National Statistics demonstrated that twenty-seven per cent of businesses are laying off staff due to COVID-19. A record 950,000 people have made claims for universal credit in the last fortnight. This is bad timing for millennials, for the majority will be entering what should be the prime of their careers. Studies from economists at Yale University show that people that enter a labour market with high unemployment typically see a ten per cent hit to their income in the first year. Not only this, but it has been proven that younger workers are more likely to get laid off than their senior, more experienced counterparts.
Employment is not the only sector that will be hit for millennials: while recessions normally only have a minor effect on the housing market, COVID-19 is making life and markets anything but normal. Compared to other groups at the same point in their lives, people in their twenties and thirties have relatively low levels of homeownership, real income and net worth, according to a 2018 Federal Reserve Board of Governors. On account of a pricy housing market, millennials will have to rent for longer and will be slow to dive into homeownership, which is a key way to build wealth. With vast student loans to pay off, mortgages will seem unaffordable, but so will expensive rent.
However, it is not all doom and gloom for Millennials. Forbes has predicted that Generation Y will now shift its priorities toward saving and stability, bucking the trend of a consumption-driven culture. Similarly, Business Insider suggested that younger people are more concerned than older people about the impact of COVID-19 on their financial health: forty per cent of this cohort have already said that they are cutting back on spending in preparation for the aftermath of COVID-19. Nonetheless, even though the acute threat of COVID-19 will pass, things will not immediately return to normal and the cards have certainly been stacked against generation Y.
Kerry Pearson
Image: Wikimedia Commons.