Millennial Generation Faces Unemployment and Debt Crisis Amid COVID Shock (Comprehensive)

Highly Educated and IT-Savvy Yet Facing Employment Difficulties Since the Global Financial Crisis
Fear of Unemployment and Wage Cuts Due to COVID-19

[Asia Economy Reporter Kim Min-young] Kim Yu-min (pseudonym), a college student on leave of absence, quit the restaurant where she had worked for over six months at the end of last month. Due to the sharp decline in customers caused by the novel coronavirus disease (COVID-19), the number of part-time coworkers was halved, and the owner notified her of dismissal, saying the store would soon close. Kim has many expenses such as rent and living costs, and with the second wave of COVID-19 spreading earlier this month, finding a job has become even more like "picking stars from the sky." Kim lamented, "In the past, competition for part-time job openings was fierce, but now there are no job postings at all," adding, "Except for early morning parcel delivery or rider jobs, opportunities are completely dried up."

The economic shock caused by COVID-19 has been found to be greater for the millennial generation. This generation is experiencing a double economic hardship of unemployment and wage cuts, and analysis shows they are even deprived of opportunities to accumulate wealth due to COVID-19.

According to a report released on the 31st by Hana Financial Management Research Institute, the millennial generation born from the early 1980s to the early 2000s faced the fear of unemployment and wage cuts from COVID-19 before they could recover from the employment difficulties caused by the 2008 global financial crisis.

In fact, in the United States, millennials graduated from college around the time of the financial crisis and experienced employment difficulties, and recently their careers have regressed due to unemployment and wage cuts caused by COVID-19. According to the Pew Research Center, a U.S. public opinion research organization, as of May, the unemployment rate for millennials was 12.5%, higher than that of Generation X (born 1965?1980) and the Baby Boomer generation (born 1946?1964). This indicates that the economic recession had a greater impact on young people.

Impact on Service Industry Workers Vulnerable to COVID-19

The Pew Research Center attributed this to the fact that most young people work in vulnerable sectors such as accommodation and food services. Indeed, as social distancing became routine and the government enforced strict lockdown policies due to COVID-19, many young people employed in service jobs lost their positions.

Despite acquiring specialized knowledge and having high educational attainment, millennials who entered society after the global financial crisis faced difficulties such as reduced employment and deteriorating job quality. Before they could recover their economic foundation from the financial crisis, COVID-19 again deprived them of opportunities to accumulate wealth, pushing them aside.

According to the report, due to rising unemployment rates since 2007, millennials have experienced a total income reduction of about 13% (an average of $25,000) over ten years. This is about twice the reduction experienced by the Baby Boomer generation (7%).

Even those with graduate-level education recorded lower employment rates than previous generations of college graduates, and it is expected that total income will decrease due to career setbacks in early working years. According to the Federal Reserve Bank of St. Louis, millennials have less wealth compared to previous generations at the same age, and 25% have more debt than assets.

In the U.S., unemployment insurance claims surged to 6.87 million in the fourth week of March. Earlier that month, claims were only around 210,000 to 220,000. Currently, new claims still reach about one million per week.

Unable to Save Money and Achieve Economic Independence

Due to two economic shocks, millennials have found it difficult to secure financial independence for marriage, home purchase, and childbirth after employment. Millennials are likely to become the "lost generation" in terms of wealth accumulation. The domestic situation is similar. In a recent survey on unemployment rates by age group in Korea, the youth unemployment rate (9.6%) was more than three times higher than that of middle-aged (3.1%) and elderly (2.8%) groups.

Researcher Jo Soo-yeon stated, "In uncertain economic conditions, it is important for financial companies to play a responsible role by developing services and content that actively contribute to integrated personal financial management and resolving financial issues," emphasizing the role of financial institutions.

This content was produced with the assistance of AI translation services.