- For millennials, adulthood has now been defined by careening from one economic crisis to another.
- Unlike the last crisis though, during the coronavirus pandemic millennials will need to do a lot of heavy lifting. They will need to put their lives on pause and potentially take care of at-risk loved ones as they get sick.
- It will be yet another massive economic hit for a generation trying to get on its feet.
- So as the pandemic progresses, millennials should demand the government enact policies that will make it easier for them to rebuild their lives like paid sick leave and subsidized child care.
- They should also demand reforms that would curb the short-term thinking in corporate America that has made the US economy more vulnerable in this moment.
- This is an opinion column. The thoughts expressed are those of the author.
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Here we are again my millennial brothers and sisters, in the midst of yet another boomer-led economic meltdown. This time our parent’s generation didn’t cause the crisis, they control the government that let it fester until basically everyone in the country had to stop what they were doing and cower in their homes in fear.
The coronavirus pandemic has all the economy eviscerating elements of the Great Financial Crisis and then some, including the added danger of being deadly.
This is serious, especially for older people. And because of that millennials are being told over and over that they aren’t invincible, and that they need to take this seriously stay inside for the good of their elders. The Trump administration is saying this, the World Health Organisation is saying this, and to be fair, it’s excellent advice. It’s just a shame that our society wasn’t better prepared (we’ll get to that).
Millennials have been through disaster before, and we know that crises can precipitate change. So this time, as a generation, we should not let this moment pass without demanding the country be reformed in a way that allows us to finally prosper and protects us all from future shocks.
“The last recession cost young workers more than $US22,000 in lost earnings,” Rachel Fleischer executive director of millennial advocacy group The Young Invincibles wrote in a recent letter to House and Senate leaders.
“More than six years after the crash, young college graduates who took on debt still had negative average net wealth. Young adults’ chances at home ownership, retirement savings, children’s’ college funds, and broader financial security have been permanently damaged.”
A sack of potatoes
If we don’t advocate for ourselves and understand what kinds of policies we need, our generation’s financial prospects will worsen yet again after this pandemic. We can’t afford to lack generational consciousness, we need to demand economic policies that work for us and alleviate the pain from the inevitable next crisis. The stats comparing how young people in our parent’s generation fared compared to how we’re doing are already extremely grim.
Two quick reminders:
- Young adults with a degree now make about as much as young adults without a degree did back in 1989.
- And even though we all started saving for retirement earlier than our boomer parents, we’ve still accumulated significantly less wealth. Yes, even after a 10 year bull market in stocks.
It’s time for millennials to recognise that this is happening, in part, because the people who make policy don’t think about our needs.
Part of this is because we don’t vote (so vote) and part of it is because policymakers are mostly boomers, and boomers were conditioned to be selfish by bad economic thought. Some of them believe in all kinds of nonsense, like the idea that shareholders are the only important stakeholders in a corporation, for example. Maybe we can’t fix the way they think, but we can elect leaders who advocate policies that work for us and push our economy in another direction.
End the nonsense
It all starts with recognition – recognition that during a crisis our social safety net is not enough, and that American corporations are incentivized to leave workers and communities in the lurch in good times and in bad. We’re seeing that now, as Americans rage over the fact that they will have to bailout the airline industry which spent 96% of free cash flow buying back its own stock over the past few years instead of saving for an eventual recession (they always come around).
This is what I mean by short-term thinking. Capitalism doesn’t require stock buybacks. They didn’t even become legal until 1982, and research indicates that most of the time companies buy stocks high and sell them low – the exact opposite of what they’re supposed to be doing.
It would have been nice, in this moment, if companies had instead used the cash they used for buybacks to pay down the record amount of debt they’re sitting on, for example. Now we’re about to see over-levered companies blow up all over the place.
Millennials should stand with policymakers (and Mark Cuban, apparently) who demand that companies that accept a bailout during the coronavirus pandemic do not engage in buybacks period. Those companies should also be required to use that money to keep workers on their payroll, and be prohibited from paying out dividends or handing out executive bonuses until they have paid back the government. These companies – and every company – should also be required to add worker representation to their corporate boards.
Then we should get rid of buybacks entirely and rethink the way executives are paid, and consider whether tying their compensation to their company’s stock price is a good idea or a foolish idea. Millennials, for the most part, are a generation that believes so much in the importance of corporate social responsibility that we’re willing to pay a premium for it.
A strong society starts with the bottom up too. Right now, Republicans in the Senate are pushing a horrendous aid package that would only give $US600 to the poorest Americans to get through the coronavirus pandemic. This won’t go far enough in terms of paying the bills, and if Americans stop missing payments the structure of this economy will deteriorate. We need more money, faster.
And we need it because Americans are holding record amount of household debt with no savings, and that is partly because wages haven’t gone up meaningfully in 40 years. That means we need a gradual hike in the minimum wage to a living wage – $US15. Seattle did it in 2014 and, surprisingly, the earth did not swallow the entire city’s economy whole. Imagine that.
Millennials are waiting longer than any other generation to start a family. At the same time America’s population is at an 80-year low, which hinders economic growth.
Why aren’t we babymaking? Partly because our generation is sidled with student debt and behind on saving since the financial crisis, and partly because all the trappings of middle class life have exploded in cost – from childcare to healthcare.
If the coronavirus pandemic is teaching us anything, it’s that Americans at bare minimum need a public option for health insurance. And when this pandemic is over Americans will need to get back to work while keeping the population going – that means giving people childcare so they can rejoin the workforce while starting a family.
For *millennials, any policy platform that doesn’t include this stuff is a sideshow, a circus to distract us from how our generation can actually build wealth and prosper. Anything less is boomer nonsense.
*This goes for Gen Z too, we need to protect them at all costs.