Generational Perspectives on the New Economy
Much of the world is looking towards young adults to stimulate the economy when the regulations around social distancing are lifted. While young adults have fewer personal health concerns in regards to the coronavirus, financial concerns tell us a different story. Conversely, our older generation is the least financially affected by the crisis, yet are the most at risk from the virus itself. This illustrates the difficulty with reopening the economy. How do we get people to engage in economic activity?
Surveys studying economic attitudes of the Coronavirus Crisis have consistently reported that Millennials and Gen Zers have the most uncertainty about their financial stability during the pandemic. An example is a survey from mid-March by the Pew Research Center which reported that Americans in their 20s and 30s are the least sure about keeping their jobs and being able to pay their expenses.
This trend is likely to continue as the economy remains closed. KFF Tracking Polls showed a 44 percentage point increase in respondents reporting that they have been affected by the outbreak from mid-March (40%) to early April (84%).
As a young professional (23 years old), my personal plans to spend money in the near future have changed in the past few months. I have paused to reconsider what I can afford due to the medium to long term uncertainty of my own financial stability. This ranges from not ordering take-out, to deciding against planning a vacation sometime this year.
Prior to the economy suddenly coming to a halt, I didn’t think twice about going out on weekends and spending more freely. However, now I hesitate to spend money that I otherwise may need later. Until there is more certainty in the market, I have to continue adjusting my spending habits. I will still go out, but just not spend as much. I may even look for more deals or offers that stretch my spending further.
I point this out to address the idea that young people will be able to bring back the economy. The notion that young adults will be able to stimulate the economy back to normal just isn’t likely. Decreased consumer demand is an economic problem that will take time to rebound.
If I only had to worry about my own personal health, my behavior would be much less affected. Unfortunately, I have concerns around paying my bills, the health of friends and family, and the restrictions imposed by the social distancing guidelines.
My grandmother, who has not been affected financially from the virus, is experiencing the opposite problem. She hasn’t adjusted her behavior due to financial uncertainty. Instead, she has changed her behavior due to fear of illness.
Unfortunately, health officials say that it is unlikely that we will have a safe vaccine by the end of the year. Aside from abiding by social distancing regulations, businesses have a vested interest in making sure that they are safe for consumers. People are looking towards different levels of government to guide the U.S. through the Coronavirus crisis, but they will feel more comfortable to be in public as new business techniques are developed and hopefully help to restore a sense of normalcy. Innovation in business practices will establish much of what “the new normal” looks like. Developing safe ways to open the economy will help to bring back demand on the macro-level. This can only happen by reducing perceived risk in public environments.
Consumer preference varies by generation. Understanding the expectations of target markets can optimize business strategies. Appealing to younger consumers alone is likely not enough. Enhancing hygiene practices and innovation in the customer experience are just a few ways that businesses can appeal to at-risk demographic groups. Placing an emphasis on protecting the most vulnerable in a population will allow more people to participate in the economy in a post-quarantine world.
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