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NextGen Magazine

 
 

Young People Moving Back Home in Record Numbers

By:
Chris Gaetano
Published Date:
Jul 27, 2020
Data from real estate information firm Zillow indicates that, as of June, 3 million young adults have moved in with a parent or grandparent; over 80 percent of them could be classified as "Gen Z," those born after 1996, said CNBC.

Young people, along with women and people of color, have been disproportionately impacted by the pandemic's economic chaos, as they have tended to have jobs in sectors that have been especially hurt over the last few months, such as retail and restaurants. The Bureau of Labor Statistics calculated that the unemployment rate among those aged between 20 and 24 was 25.7 percent in April, more than 10 percentage points higher than the national average of 14.7 percent. What's more, many are graduating into one of the worst job markets in generations, and so many will need to put a pause on career development as they simply try to survive. This delayed start can have longer-term impacts on their careers, as they are then missing out on the time they could have been using to make contacts, develop skills and otherwise further their career. This setback, in turn, means they will be building less wealth, which can have effects years down the road.

A similar thing happened with millennials in the wake of the last financial crisis, in 2008, which saw many moving back in with their parents as the economy collapsed around them, which had the effect of postponing financial independence and career development, to their ultimate detriment. A 2018 Federal Reserve study found that, generally, the most rapid wealth accumulation happens earlier in life, with later wealth building upon it. Given that millennials' prime earnings years happened in the middle of a financial crisis, this means that they have less to build upon than those who accumulated their assets beforehand. If Gen Z is having a similarsetback happen to them  during the pandemic, it is possible they too will have long-term damage to their career development and consequent lower earnings as well.