Millennials worldwide have suffered greatly due to the COVID-19 crisis, which has exacerbated an already competitive job landscape and stifled the economic growth that many were hoping for. Millennials are the generation that invented the side hustle out of necessity, spent more time in school just to land entry-level jobs, and continue to face unprecedented barriers to home ownership. All these factors are making their economic outlook and chances at a comfortable retirement rather bleak.
Millennials are the most educated generation. Having to spend more time pursuing their post-secondary education has led to postponing life events, like starting a family, while also losing out on some prime earning years. Furthermore, despite gaining more education, they have not been able to advance their careers with the same speed and efficiency as older generations. It’s gotten worse the last few years as millennials have experienced low earnings, less wealth, and have missed out on several important benchmarks due to the pandemic.
According to Andrew Van Dam of The Washington Post, the economic downturn brought about by COVID-19 came at the worst time for millennials who were entering their prime earning years. Millennials across the globe need to consider if there is a country that offers a brighter outlook and more possibilities, or if there is a way for them to inch closer to a happy retirement, than where they currently live. Ultimately, it must be determined what the future holds for this generation that is coming into prominence — or, at least, what it should be.
Where Are Millennials Struggling the Most?
Based on data provided by MSCI, as of 2019, millennials are the largest adult cohort worldwide. While these numbers fluctuate, the approximate number of millennials per country and continent breakdown is as follows:
• 72 million in the United States
• 10 million in Canada
• 278 million in Africa
• 148 million in Europe
• 1.1 billion in Asia
It’s hard to say which location offers the most challenges to millennials. The U.S., for instance, has seen student loans double between 2003 and 2013 (The Street, 2017). In Canada, two-thirds of millennials expressed concerns over how buying a home would leave them without the savings or assets to comfortably retire, according to a 2019 article by Benefits Canada. In a 2021 survey by Deloitte, millennials in Africa reported high stress levels about finances and job prospects. Clearly, millennial concerns are global, not regionalized or confined to only a few countries or continents.
The Job Market for Millennials
The workplace that most Boomers and Gen Xers think of has drastically changed. Employer loyalty is a thing of the past, and millennials entering the workforce are older on average than ever before.
Millennials have been open about the lack of career progression they have experienced in many industries. This dearth of professional mobility has caused many millennials to find new jobs or hold down more than one job. According to a Gallup report, six in 10 millennials are willing to explore new job opportunities.
Despite their struggles, millennials have put their fingerprints on the global job market. Their desire for a positive and supportive corporate culture and a triple bottom line (i.e. planet, people, and profits) approach to business has resulted in many millennials forgoing salary and compensation perks during their peak earning years. They might be the first generation to truly attempt to balance lifestyle with finances.
How Much Do Millennials Earn?
CNBC reported the median millennial household pre-tax income was $71,566 in 2020. Another study by Sunmark Credit claimed that a millennial spends a daily average of $208.77 (including groceries, housing, and more). That works out to spending over $1,400 a week, $5,800 every month, or over $70,000 a year, slightly below the average millennial income.
This is rather bleak on a few fronts. Millennials, on average, are not earning enough and are spending too much to live every year. It’s easy to suggest that millennials need to spend less frivolously, but the cost of living in most countries is relatively high. What this data reveals is that many people are just trying to get by and pay their bills.
How the Pandemic Made the Situation Worse
If millennials were in a tough spot prior to 2020, then the COVID-19 pandemic changed everything. According to a CNBC article by Jeff Cox, millennials in the U.S. have been hit particularly hard with respect to job losses. One reason for this is that social distancing impacted many of the jobs that millennials rely upon as either their primary or supplemental source of income.
In “Three Reasons Why Millennials May Face Devastating Setback from COVID-19”, policy analyst Ana H. Kent looks at three causes of the economic fallout millennials face due to COVID-19:
• They never fully recovered from the financial crisis
• They didn’t have the financial means to withstand any type of economic emergency
• There are fewer employment opportunities compared to other generations
These reasons are not location-specific by any means. COVID-19 cut a swath through careers with greater efficiency than any recession. If the average millennial was having trouble advancing their career to make more income, the pandemic made it that much harder.
Is There a Light at the End of the Tunnel?
The economic hole that millennials must climb out of is deep and seems to be growing by the day. That said, millennials have shown a tendency to be resourceful and put their education and skills to use.
Without government intervention, it’s hard to imagine the economic outlook for millennials improving any time soon. Whether it’s tax breaks or rebate programs, there are several things that a government can do to help millennials become homeowners or save up for retirement. Time will tell if one or more confronts this issue head-on.
For now, millennials need to consider how to make the most of their peak earning potential while putting themselves in the best position to retire safely and comfortably.
Rob Shapiro | Contributing Writer