Only now is it becoming clear, 10 years after the start of the 2008 financial crisis, just how much the crash impacted millennials. Its effects were not limited to the bank accounts and investment portfolios of the generation’s parents. Instead, the crisis has wreaked a more long-lasting trauma on the younger generation, pitting millennials against the establishment consensus on finance, wealth management, and politics. As it stands today, there is some good and bad news about what millennials learned from coming of age during the recession.
The average millennial was completing high school or beginning college at the time of the crash. For those headed to college with no real estate or retirement funds tied up in the fortunes of Wall Street, the immediate impact was a strained job market and a greater need for financial aid. In some cases, young people stayed in school longer, building their credentials while the economy bounced back — but that came at a high cost.
Indeed, the debt-to-income ratio for millennials isn’t pretty. In terms of individual net worth, your average 20-something is deep into negative numbers. For my graduating class of 2014, the number is -$23,704. And, in a study by The College Investor, the only class shown to be above water is the class of 2008. This is not a coincidence.
Fortunately, millennials have proven to be an incredibly self-reliant generation. If you think the millennial and elder grandparents in your life don’t have anything in common, think again. In fact, as The Atlantic made mention of in 2013, there is a shared “depression mentality” between these two seemingly divergent generations. This means millennials’ penny-pinching, do-it-yourself sensibilities, and skepticism of institutions, is nothing new. What your great-grandparent might call “self-sufficiency,” a millennial would call a “lifehack.” And younger people are quite effective at saving. For all the signs millennials are inclined to like big government (more on that later), millennials consider their personal savings to be their most reliable fallback — more so than Generation X and baby boomers, who look to Social Security, pensions, and 401ks. The generation’s distrust in Big Banks and Big Government’s ability to protect their financial interests is commendable.
Many an article has focused on the businesses millennials are supposedly “killing.” Be they barred soap, Applebee’s, homeownership, napkins, or taxicabs, the carnage is everywhere. Yet the rapid expanse of Uber in big cities, or the rise of electric scooters, is not something you would see unless people under 30 were trimming their spending and eliminating waste. Between the decrease in emissions and automobile congestion, and the availability of supplemental income for gig workers, this has been a positive development for cities.
The same goes for millennials’ housing and travel habits. Millennials have spent more time living with roommates in apartments, and they’ve cut out big expenses like cable television. When they travel, it’s with Airbnb. These solutions are innovative, and stem from a feeling of necessity more than desire. A room at the Hilton might sound better to most, but when your formative years overlapped with a financial crash, this is how you’re wired to think. Saving money is superior to creature comforts.
But, unfortunately, the financial crisis also spurred millennials to overcorrect in their politics. In the piece “The Millennial Socialists Are Coming,” The New York Times profiled millennial politicians running with the organizational support of the Democratic Socialists of America. And they are coming. Dues-paying members of the DSA have sky-rocketed in recent years and positive impressions of socialism have grown steadily in studies of millennial politics by Gallup. Interestingly enough, Gallup’s findings actually showed more of a decline in support for capitalism than a clear spike in favor of socialism.
This presents an opportunity. The “Greatest Generation” endured the Great Depression by developing a spirit of independence and skepticism about Big Business. But they also slipped into an irreversible government dependence in the form of Social Security and welfare expansion. Millennials are modeling a different path in their habits. It is true that they espouse an affinity for socialism, but that could instead be seen as an intense focus on fairness. In practice, millennials live out the ideal of financial self-reliance and personal responsibility. But financial crises are turning points for fringe political movements led by the cash-poor and desperate. Millennials savvy at saving money and disrupting old business models may well be holding our own politics back from the brink. Ten years beyond the 2008 financial crisis, the challenges for millennials are very real, but much of value has been learned.
Stephen Kent (@Stephen_Kent89) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the spokesperson for Young Voices and host of Beltway Banthas, a Star Wars & politics podcast in D.C.
