American millennials are having a tough time economically. The 2008 crisis and now the 2020 covid-19 crisis have greatly harmed their effort to build wealth. Federal Reserve data from 2019 show that millennials own only only 3 percent of the nation’s wealth despite being 22 percent of the population. When baby boomers were at the same age, they owned 21 percent of the nation’s wealth.
In addition to the two economic downturns, millennials have also suffered from high levels of student debt. That indebtedness forces them to postpone independent living and family formation, which means they are not buying houses and all the furnishings that go with them. All of which puts a drag on economic growth while it makes worse the inequality gap between rich and poor.
As a result of the covid-19 crisis, the US Department of Education has announced that federal student loan borrowers will be able to suspend their payments with no interest penalty until October of this year. Now, the $3 trillion HEROES act, which passed the House of Representatives, proposes to extend the period until September 2021. The idea is to relieve financial strain, especially on young Americans, until it’s believed the worst of the crisis will be over.
Under the HEROES act, economically distressed borrowers of private student loans will be eligible for $10,000 of debt forgiveness and they will also get their monthly bills covered by the government until September 2021.
April 2020 saw unemployment among US youth jump dramatically to 27.4 percent, far above the February 2020 rate of 10.3 percent and far higher than 14.7 percent total unemployment figure. Unless a strong, speedy recovery happens, millennials are condemned to have even less than 3 percent of national wealth in their future.