Minnesota's largest generation, millennials, face a third round of economic uncertainty

NINA MOINI: Millennials are Minnesota's largest generation by population and are the largest portion of the workforce right now. That's according to the most recent state data from 2023. The generation is around ages 29 at the youngest and in their early 40s at the oldest. They're an important part of our economy, but they faced a lot of economic setbacks-- the 2008 Great Recession, COVID-19, and now economic uncertainty ahead that we have all been hearing about.

So joining us now to help understand the importance of this generation and what the possibility of another economic crisis could mean is Janna Johnson. She's an associate professor at the Humphrey School of Public Affairs at the University of Minnesota. Thank you so much for your time this afternoon, Janna.

JANNA JOHNSON: Thank you, Nina. It's great to be here.

NINA MOINI: Well, as a millennial, as a deep millennial-- I'm not sure if you are-- there have been some setbacks along the way. I guess I didn't realize millennials had grown so much in terms of generation and workforce. Why are millennials really kind of important to the economy right now?

JANNA JOHNSON: That's a great question. And, yes, Nina, I am a millennial as well. I'm on the older side of the generation. But, yeah, I am a member of it.

As your introduction said, and as you're saying, millennials are now the largest current working-age population since the baby boomers have really mostly started to reach retirement. And the reason why the boomers-- or, excuse me, millennials are larger than, say, Gen X, our immediately older generation, is that our parents were the baby boomers. So one of the earlier terms for millennials were the echo boomers. So since our parents' generation was so large, we are larger as well. But now, instead of being called the echo boomers, we're the millennials.

NINA MOINI: OK, I think I like millennials better.

[LAUGHTER]

So, again, taking it back to 2008-ish, around then, I was in college. I was just kind of entering college. And then by the time I remember I left college in 2011, things had really changed. The job market had changed and all of that. Did it really start with that 2008 financial crisis and the Great Recession? Is that still lingering?

JANNA JOHNSON: Yeah, that's a really important point to go all the way back to 2008 in terms of thinking about millennials' economic standing. So you're right. Millennials were around the ages of 13 to 28 when this recession hit. So a lot of us were just entering the job market, whether it was we had just graduated college or finishing college or were finishing high school.

And there's been a lot of research that shows that entering the job market during a recession isn't the greatest. A lot of times, you end up unemployed for longer, or you end up in a job that you didn't necessarily want or expect because of the economic conditions at the time that you were looking. And when you face a setback like that in your early career, it's a lot harder to recover than, say, if you were a more experienced worker who experienced the recession-related job losses.

And so a lot of millennials faced this issue when they were coming out on the job market. And there's been work that shows that they have experienced what's called scarring in terms of their economic trajectory. Their overall earnings have been lower. So it's just really hard to catch up when you face that sort of thing right away.

Another interesting thing-- the same work shows that at least among college graduates, the later-entering cohorts-- so, say, the younger parts of the millennials, they entered the job market significantly after the Great Recession-- but even their earnings and employment haven't really recovered the way that we would have expected it to. So something has changed pretty significantly since the Great Recession.

NINA MOINI: Yeah, and then, of course, COVID, which we all know. We don't even need to get into to all of those hardships. But this is kind of impacts everybody, though, across generations when one generation changes their life choices or habits or what they can do. What are you seeing in terms of how millennials' life trajectory is going?

JANNA JOHNSON: Well, yeah, I mean, you're right. So, yeah, COVID, we know COVID, millennials were parents of young kids. They really experienced the brunt of the disruptions there. But you're right. There's some broader trends that have really begun to emerge and have really affected millennials perhaps more in terms of thinking about rising housing prices.

Millennials have much significant lower levels of wealth compared to previous generations. The age at home buying is a lot older. And a lot of that is-- I mean, of course, it's rising housing prices. But a lot of that price rise, it's not just millennials want to buy houses. It's that there's just fewer houses to buy.

And in a lot of cases, because boomers have generally hung on to their houses a lot longer than previous generations-- they've been encouraged to age in place, which is a great thing, but it just means that there's fewer houses coming on the market. Another thing that millennials have experienced probably more than other generations is rising levels of debt related to education. And that, of course, can place a damper on being able to achieve what are still considered to be markers of making it into adulthood, like buying a house.

NINA MOINI: Yeah, and you also have research that focuses on fertility and choices around having children or not having children.

JANNA JOHNSON: Exactly, yeah. My current work looks at how there's been a lot of coverage in the media recently about falling fertility rates in the United States. And I particularly look at the difference between fertility between Gen X and millennials. And there really does-- I mean, again, generational labels are arbitrary. Just because we cut them-- they're pretty arbitrary.

But even still, if you look at the fertility of Gen X versus millennials, millennials is just rapidly, rapidly falling compared to Gen X. And a lot of that is due to delaying first birth among millennials. And so it really remains to be seen. A lot of millennials, they're not quite done with their childbearing. And so perhaps it is just delay, that they're going to make up their fertility compared to previous generations by having kids in their 30s and maybe in their early 40s.

But it would take a lot to get there, given how much their fertility-- or how much lower their fertility has been in their 20s compared to, say, Gen X.

NINA MOINI: Mm-hmm, and then when they're waiting longer to have children, then their parents are older as well. People are living longer. So it creates strain on both ends, all the different ends of the generations. But so, I mean, this is kind of tough. It's not surprising, necessarily, to a lot of people. But we're hearing so much right now about economic uncertainty, economic uncertainty.

What are you going to be watching for, or what do you think is going to happen to millennials in particular? Or have they already kind of seen it all and they'll probably just continue on the trajectory they're on? What do you think?

JANNA JOHNSON: Yeah, that's a great question, I mean, and it does remain to be seen. But what's going to be very interesting to me is what's going to-- I mean, particularly, of course, given my work, is I'm going to be thinking a lot about the millennials who are thinking about having children, who haven't started their families yet and still maybe want to have kids.

When you face uncertainty, just generally, uncertainty means people are going to be less likely to have kids. If we're not sure if we're going to have a job next year, probably not going to want to necessarily add another child. But a lot of millennials are reaching the limit in terms of how much longer they can actually delay their childbearing.

And so the fact that we're facing this uncertainty now could lead to even lower fertility among millennials than they maybe would have had otherwise because they're going to be delaying long enough that the delay may actually turn into a true fertility decline.

NINA MOINI: Yeah. And before I get emails from the Gen Xers and the Gen Zs, we know everybody's struggling. But--

JANNA JOHNSON: Oh, yeah.

NINA MOINI: --it's data. Everyone's like, well I had debt and blah, blah, blah. But it's interesting to see how the biggest part of the workforce right now is faring. Really appreciate your time and your work, Janna. Thank you for stopping by Minnesota Now.

JANNA JOHNSON: Absolutely. It was a pleasure. Thank you, Nina.

NINA MOINI: Thank you. Janna Johnson is an associate professor at the Humphrey School of Public Affairs at the University of Minnesota.