Young Americans experiencing stress due to pandemic

During the last serious economic downturn in 2008, Evan Schade was in high school and the crisis seemed like a news event that happened to other people. This time, as the coronavirus has brought the economy to its knees, it has become personal.

When nonessential businesses were closed last month in Kansas City, Missouri, where he lives, Schade, 26, lost his job at a carpet store and almost all of the shifts in his second job at a coffee shop. His girlfriend, Kaitlyn Gardner, 23, was laid off from a different coffee shop.

The money they have in their bank accounts — a little more than $1,000 — is enough to cover only this month’s $800 rent check — forget about his $300 student loan payments or the health insurance he was hoping to finally sign up for. The couple have spent their time at home applying for unemployment and fruitlessly looking for new work.

“I know so many people my age who are going through the exact same thing,” Gardner said.

The youngest American adults are facing what is, for most of them, the first serious economic crisis of their lives.

By most measures, they are woefully unprepared.

While the past few years were largely good for the American economy, that did little to help set millennials up with a solid financial foundation.

Overloaded with credit card and student debt, and underrepresented in the housing and stock markets, they entered this uncertain period with significant obligations and few resources to fall back on.

Their position looks doubly precarious when measured against older generations today and relative to those generations when they were the same age, from 23 to 35 years old.

The sudden disappearance of paychecks, combined with a wide array of monthly debt payments and the declines in any investments, is forcing some millennials to take desperate measures. Social media has been filled with discussions about how to best take money out of 401(k) retirement accounts to pay rent.

“Over time, it is becoming more difficult for young families to accumulate wealth,” said William R. Emmons, the lead economist at the St. Louis Federal Reserve’s Center for Household Financial Stability. “We thought maybe they’d catch up later, but the current situation doesn’t give me much reason to believe that’s going to happen.”

These disadvantages are already shaping the long-term prospects of young Americans. They are much less likely to be married, have children or own a house than Americans of a similar age in decades past.

Gardner said she and Schade eventually wanted to have a family and a house. But she said, “We’re both going to be in debt for a while, and having kids is just not feasible.”

While there is a chance the downturn will be short, economists are assuming the turmoil that has already happened will have long-term consequences for young households.