- Biden’s stimulus could be the first step in lifting millennials out of their affordability crisis.
- Set back by two recessions, millennials inherited a broken economy from boomers.
- To ease the generational wealth gap, millennials need a long-term plan and seat at the table.
- Visit the Business section of Insider for more stories.
Are financially burdened millennials finally seeing the light at the end of the tunnel?
Designed to boost the economy during the worst crisis seen in generations, the law provides everything from additional funding for small businesses and vaccine distribution to housing and rental benefits, and a pot of money for state and local governments. An early analysis of the rescue plan indicates the vast majority of its benefits are squarely directed at middle and low-income households.
But it also has the potential to be a stepping stone that millennials need to help climb their way out of the affordability crisis they’ve been facing for most of their adulthoods, marked by two recessions before the age of 40.
Beefing up unemployment benefits to $US300 ($386) a week will help many Americans, but especially the younger workers who have been hardest hit in terms of income loss during the pandemic. The older cohort of millennials in prime child-rearing years stand to benefit from a beefed-up child tax credit that will put up to $US3,600 ($4,627) in the pockets of parents. And $US1,400 ($1,799) checks will help cover the things millennials struggle with most: living costs like rent and debt.
While critics say the final American Rescue Plan is missing some key initiatives like a federal minimum wage hike and student-loan debt relief, it has overall received widespread support. A new Morning Consult poll found that 75% of voters support the package, including 59% of Republicans.
While it’s a good start, millennials need more to heal their economic wounds; they need solutions to restructure the broken economy they inherited.
Millennials have been facing an affordability crisis
Millennials are a generation of optimistic, hard-working people who have been dealt a bad hand, according to Jill Filipovic, author of “OK Boomer, Let’s Talk,” which explores how boomers created an economic crisis that will leave millennials the first generation worse off than their parents.
“None of this was an accident,” she told Insider back in August. “If we understand where millennials are and how we got here, we can have a better idea of how to fix things going forward.”
The oldest millennials came limping out of the Great Recession with crippled finances, and they were still dealing with its lingering effects a dozen years later, when the coronavirus recession hit.
The financial crisis left the oldest millennials with wealth levels 34% below where they would be if it didn’t occur, and it could have led to stagnant wages for the generation up to 15 years after graduation. Coupled with student-loan debt, soaring costs for things like houses and health care, and now, income loss due to the pandemic, it’s been a grim wealth-building journey.
But these aren’t the only economic forces behind millennials’ economic plight.
A November Deutsche Bank Research report stated that younger generations have been hit hard while older generations have reaped benefits from the economy. Boomers, it said, saw an increased value in assets thanks to low interest rates and inflated housing prices. They didn’t have to pay as much for education as millennials have, nor will they face the cost for environmental damage caused by the carbon emission-releasing companies in which they’ve invested.
Boomers have been questioned by authors like Filipovic and news outlets ranging from Vox to the Guardian for their role in bankrupting the rich economy they inherited, leaving millennials to pick up the pieces. And they’re not actively setting up a framework to fix this.
Neil Howe, the economist, historian, and demographer who coined the term “millennial,” told Insider that boomers refuse to pay for institutional upkeep, preferring to spend money on things that change people’s lives now. He said this is a result of their coming-of-age experience, in which their parents, the GI generation, cared about building strong institutions and looking into the future. Boomers took that for granted and developed a “live-for-today attitude,” he said.
Consider when boomers entered the same life stage millennials are in now, in the 1980s. They supported the increasing financialization of the economy and a massive reduction of taxes, causing financial asset speculation to become both disconnected from and controlling of the real economy, Kurt Andersen, author of “Evil Geniuses: The Unmaking of America,” told Insider in February.
Millennials need a game plan and room at the table
Biden promised to “go big” on a stimulus package, and he delivered with a progressive historic bill that some have likened to FDR’s “New Deal” agenda of the 1930s. As Insider’s Juliana Kaplan wrote, it has the potential to inject the government into American life in unprecedented ways, while Insider’s Ben Winck reported that’s part of $US5 ($6) trillion in stimulus going back to the early days of the pandemic during the Trump administration.
Putting cash in pockets and fattening unemployment benefits will inevitably be a leg up for many millennials suffering from economic hardships. But it needs to be followed up with longer-term action.
“Millennials would like to see a real game plan,” Howe said, adding that they ideally want to see society move in a more constructive way that ensures their future. The older generation, he said, is more focused on getting through the next six months than investing in a structural solution for the future.
Take the question of student-loan debt, for example. Biden has advocated for canceling up to $US10,000 ($12,853) of it while resisting the more progressive agenda to cancel up to $US50,000 ($64,266). Biden claims he lacks the legal authority to do it.
Sen. Elizabeth Warren disagrees, and she was a cosponsor of a tax exemption in the stimulus on student-loan forgiveness through 2025. She argues it sets the stage for student loan forgiveness. While this would wipe out debt for 15.3 million Americans, it doesn’t solve the problem of the rising cost of tuition that leads to such massive student-debt burdens.
But millennials are by and large waiting for a political class from another generation to make these decisions.
Boomers have held tremendous political, cultural, and economic power for the past several decades, Filipovic said. “What millennials need is not just boomers imparting their wisdom and experience, but really making room at the table for us,” she added.
While the number of millennials in Congress rose slightly this year by 1%, they still only make up 7% of Congress with 31 out of 532 voting members, per the Pew Research Center.
“Unless millennials are at the table, we’re really not going to see the issues that are most important to us addressed,” Filipovic said. “You need people who are actually going to live in the future, who have a stake in the future, at the decision making table.”