Unluckier Than The Rest?: The impact of COVID-19 on European Millennials
May 15, 2020
2 min read
What's going on here?
Despite not being the most medically susceptible to the perilous virus, research suggests that millennials may be one of the greatest economic victims of the pandemic.
What does this mean?
Even before the coronavirus outbreak, millennials (those born between 1981 and 1996) were beginning to be referred to as the “unlucky” or the new “lost generation”. This refers to the impact of the last severe economic downturn in 2008/09 on this particular age group. Whilst no generation is completely immune to crises, research from the International Monetary Fund (IMF) suggests that those who completed their education amid the last recession are still more likely to be financially fragile in 2020.
Recent events have only exacerbated this anxiety. Statistically, younger workers are most likely to be laid off or participate in gig or contract work without protections. They are also more likely to work in hospitality and retail; some of the sectors hardest hit by COVID-19. Numerous accounts of millennials have emerged about their continued struggles with unemployment, underemployment and underpayment over the last decade. This is particularly pronounced in southern European nations, such as Spain, Italy and Greece, where youth unemployment recently stood at around 40%.
What's the big picture effect?
Experiencing two major economic downturns is sure to have an impact on nations’ economies and one’s individual economic trajectory. Luis de Guindos, the Vice President of the European Central Bank, has even predicted that Europe is likely to experience a “severer recession than the rest of the world”. This, in turn, is likely to result in weak wage growth and a generation who is less likely to take financial risks than their older counterparts. It is highly probable then, that there will be a decline in the number of start-ups or new SMEs (small or medium-sized enterprises) due to the limited cash flow. Ultimately, millennials are likely to be the first generation in history to be worse off than their parents.
This heightened generational discrepancy together with the latest crisis is likely to facilitate a transformation in political attitudes amongst the youth. A key example is millennials’ frustration about struggles with home ownership, placing the blame on the current establishment. Indeed, it is reported that two-thirds of Spaniards are dissatisfied with democracy in their country.
Repeated misfortunes may lead young voters to be more proactive in what they see as protecting their future, shifting towards more radical politics. The effect of changing values is evident when looking at post-2009 election results, from the rising popularity of far-right French politician Marine Le Pen to youth support for Italy’s left-wing Five Star Movement. One can expect to see the rise of more European populist parties (appealing to ordinary people who feel forgotten by established parties). The unprecedented mobilisation of young people in China, showing resistance to the Chinese Communist party’s approach to COVID-19, provides a glimpse of what the future may hold.
Whilst no one can be sure of where politics will take us next, rest assured that with something as shocking as a global pandemic, it is likely to merit an equally surprising political and economic reaction.
Report written by Katrina Hughes
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