The coronavirus pandemic has accelerated a major cultural and economic shift in the United States, forcing millions of young adults to return to their parents' homes. The proportion of young people between 18 and 29 years old, which includes Generation Z and later Millennials, who have been forced to return to the family unit reached 52% last summer, the highest level since the Great Depression, according to data from the Pew Research Center.
Previously, the highest value was recorded in the 1940 census, when 48% of young adults lived with their parents, although this percentage was surely higher during the previous years, for which there is no record. Last July, according to the Pew Research Center, around 26.6 million lived in their parents' home, more than ten times more than in February.
A dynamic that has already begun to emerge after the scourge of the 2008 financial crisis, which forced many Millennials, those born between 1981 and 1996, to break with the tradition of permanently leaving the family home and gaining financial independence as soon as they started university. . In fact, according to Jim Reid, chief economist at Deutsche Bank, in the last 15 years, the percentage of people aged 25 to 34 who live with their parents "has skyrocketed" on this side of the Atlantic to over 17%.
However, Covid-19, which has already infected more than 7.6 million Americans and claimed the lives of almost 213,000 people in the country, has become the coup de grace that increases the generational gap, with important consequences not only economic but also political. According to the most recent data published last week by the Federal Reserve, Millennials control only 4.6% of the wealth in the US despite already making up the majority of the workforce, with around 72 million people.
While it is not unusual for younger people to accumulate smaller assets than their elders, this particular group is far behind previous generations when they were the same age, according to data from the Fed. As during the first half of 2020, Generation
In this way, Millennials accumulated an approximate wealth of 5.19 trillion dollars until the end of the second quarter of 2020, while Generation X almost multiplied this level by six to 28.52 trillion dollars. Baby Boomers control about $59.56 trillion and those born before 1946 about $18.78 trillion.
"If the pace of recovery is not maintained, it will be many months before the number of young adults in their parents' homes returns to normal levels, especially among those who have lost their jobs," explains Jeff Tucker, an economist at the real estate agency Zillow. For Tucker, a prolonged setback will delay the path to financial independence for many members of Generation Z just as it did for Millennials almost 13 years ago. However, the latter are postulated as those most affected by the current debacle.
According to the Pew Research Center, 35% of Americans ages 18 to 29 and 30% of those ages 30 to 49 say they, or someone in their household, has lost their job. Data from the Bureau of Labor Statistics (BLS) also indicates that among the unemployed, Millennials face longer periods of unemployment.
This situation can also have political consequences. For Deutsche Bank's chief economist, at some point, the young generation of voters who are left behind economically will outnumber those who have benefited from the favorable financial conditions that have been consolidated before the setback of the pandemic. "When this happens or is closer, the possibility of a seismic shift in politics will be much more likely," he warns.
In this way, they highlight how over the next decade, Generation Z and the youngest Millennials will become an increasingly powerful electoral force, especially if they continue to lag behind due to the impact of the pandemic. In the US, such intergenerational crossover will occur even earlier. "Never before has the vote been so polarized by age, so the increasing weight of Millennials and younger voters in the coming years will have a massive impact on global politics and derail the status quo," Reid adds. .
The Brookings Institution agrees to highlight how young people could exercise significant political power. Both Millennials and some members of Generation Z now comprise 37% of voters in the US, approximately the same proportion of the electorate as baby boomers and previous generations.
The confinements harmed young people more than the rest of the population
The COVID-19 pandemic has shown that government restrictions manage to reduce infections, as confirmed by the IMF in a chapter of its next edition of the World Economic Outlook, but they also contributed to the recession and hit the poorest groups especially hard. most vulnerable populations, such as women and young people. In this way, the institution points out that the confinements more sharply reduced the mobility of young people between 18 and 44 years old, with younger children affected by school closures and often with temporary work contracts that were more likely to be terminated during a period of time. crisis. They also more drastically curbed the mobility of women, who bear a greater burden of childcare. To avoid further lasting inequality, policymakers should strengthen unemployment benefits and offer paid leave to parents, according to the Fund.