Below is a complimentary excerpt from a Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. Click here to learn more and subscribe.

How Will The Millennial Generation Face This Economic Crisis? - 4 17 2020 12 51 56 PM

Millennials who came of age during the Great Recession are facing their second big economic crisis, and many of them aren’t prepared. Now solidly into their working lives, they have bigger debts and fewer assets to cushion the blow than earlier generations did at the same age. (The New York Times)

NH: There is no question that Millennials are entering this economic crisis with less wealth than earlier generations had at the same age. In 1990, when Boomers were in their early to mid-30s, they owned 21% of US wealth. In Q4 of 2019, Millennials owned just 2.7%. I have been writing about the shift of net worth toward older age brackets for years. One result of this shift is that the young are more vulnerable during times of economic hardship. See "The Graying of Wealth" and "The Graying of Wealth in One Picture."

But I am less worried about Millennials than I am about Gen-Xers. Millennials are still young, and a lot can change economically and politically between now and when they retire. Gen-Xers, on the other hand, have meager retirement savings--and are themselves lagging in net worth--while getting very close to retirement. They have less time to recover their losses.

Additionally, Gen-Xers rely more on income from gig jobs than any other generation. See "Xers Rely on Gig Work Income." The pandemic has particularly hard hit the gig-economy as it relies heavily on face-to-face interaction, which social distancing has ended.

While the CARES Act opens up unemployment benefits for head-of-household gig workers, it's hard to see contract work recovering rapidly until the economic shutdown is fully lifted--and that may take a while. In another bow to Gen-Xers, the CARES Act allows workers to withdraw up to $100K early from their 401-k's and IRAs without penalty. That may help relieve the Xers' current income needs. But it will condemn many of them to even greater retirement hardship down the road.

*  *  *


Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.