Every generation has the sense that what it’s faced has been unique. People born between 1999 and 2005, however, can rightly claim they’ve experience a great deal already. As the Federal Reserve Bank of St. Louis’ 2024 State of Economic Equity report points out, that swath of young people has lived through recent instances of historic economic precarity: the COVID-19 recession (aka the Great Lockdown) and high inflation, plus “the tightest labor market since World War II.”
Ana Hernandez Kent is a senior researcher who’s part of the Institute of Economic Equity team behind the St. Louis Fed report. She told St. Louis on the Air those phenomena have contributed to a troubling number of “disconnected” 18- to 24-year-olds who’re not working or in school and have comparatively high rates of depression.
“They're not acquiring retirement savings. They're not acquiring savings to save for a house, a down payment, or even future education. It's concerning because they're not potentially building for their future financial stability,” Kent said.
“Depression isn't just an isolated mental condition. … It has an impact on the economy if they are perhaps staying out of either education or having a job because they're depressed,” Kent continued. “Or if they have a job, we know depression and other mental illnesses are more likely to [cause] people to have lower productivity, to take days off. So [mental health] has a wider, broad spread economic impact.”
The 2024 report also shows disparities by race in how secure young adults feel about their financial well-being. While about 75% of white and Asian young adults said they felt they were doing “at least OK financially,” just over 50% of Black and Hispanic young adults reported the same.
Kent said capacity to handle a $400 emergency expense illustrates how that disparity can show up in everyday life.
“If you go to the emergency room and you don't have health insurance, that's going to blow that [$400] out of the water, and I have a car repair that's needed that's likely going to be more than that. The fact that so many young adults – especially Black and Latino young adults – said they would be unable to handle this kind of expense, that's very concerning.”
Kent said it’s important to focus on 18- to 24-year-olds because young adults are important to the economy at large.
“If we're not supporting these young adults, particularly by race, ethnicity, by gender — companies are missing out on a lot of that potential future leadership,” she said. “They're not going to be building retirement savings, they're not going to be building savings to be able to pay a down payment on a house. ... So the economy as a whole is not gaining from that, leaving economic potential on the table.”
To hear more about how factors like race and gender affect young people’s actual and perceived economic security and what practical support can do to help disconnected young folks gain stability, listen to St. Louis on the Air on Apple Podcast or Spotify, or click the play button below.
“St. Louis on the Air” brings you the stories of St. Louis and the people who live, work and create in our region. The show is produced by Ulaa Kuziez, Miya Norfleet, Emily Woodbury, Danny Wicentowski, Elaine Cha and Alex Heuer. Roshae Hemmings is our production assistant. Our audio engineer is Aaron Doerr.
