Millennials face particularly harsh economic damage from the coronavirus due to a compound hit from massive job losses and poor personal finances, according to a Federal Reserve analysis.
While the pandemic has cut a huge swath through what had been thriving U.S. activity, the hit to those born between 1981 and 1996 has been especially brutal.
They've suffered a bigger share of the job losses as social distancing rules have shut down the many service-related industries on which millennials rely.
There are currently some 25.1 million Americans who have been getting unemployment checks for at least the past two weeks amid a 14.7% unemployment rate through April, and those numbers are expected to climb.
The reason why the crisis has been even more difficult for millennials comes down to three issues, according to St. Louis Fed policy analyst Ana H. Kent: lasting fallout from the financial crisis, small financial cushions to absorb this type of emergency, and disproportionate job reductions compared to other demographics. The nonfarm payrolls report for April indicated that of the 20.5 million jobs lost during the month, 7.7 million came from leisure and hospitality, sectors generally dominated by younger workers.
"Young adult Americans are facing very serious economic upheaval," Kent wrote in a research paper. "Millennials' financial fragility hurts not only these individuals, their families and others who rely on them but also the economy as a whole."
Despite a personal savings rate that mostly stayed above pre-crisis levels throughout the 11-year recovery, many American families found themselves in precarious financial standing at the start of the coroanvirus shutdown. For millennials, it was even worse.
Recent surveys have shown that 1 in 4 millennial families have debts that outweigh their assets, a condition known as negative net worth. One in six say they wouldn't be able to raise enough cash to cover a $400 emergency.
"For those experiencing job loss, these emergencies can prove catastrophic without sufficient financial cushion," Kent wrote.
During the coronavirus-related layoffs, the most financially vulnerable have been hit the hardest.
Looking at job losses as a percentage of the workforce, Hispanics, women and those without a college degree suffered the most, especially in the initial March layoffs. The situation breaks down similarly for those who say they can't handle a short-term emergency, with 32% of black millennials and 20% of Hispanic millenials in that situation.
However, Kent said the situation is not hopeless.
"The good news, though, is that while not as young as they were during the Great Recession, millennials still have time to recover," she said. "The current economic crisis also presents opportunities to pause and rethink how to best achieve household financial stability and resilience against future financial blows. Finally, with many millennials entering positions of power, policymakers may be prompted to think creatively about solutions to help financially strengthen not only this generation but also the ones that follow."