Covid-19 decimates household income, especially among millennials

Covid-19 decimates household income, especially among millennials

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The Covid-19 pandemic is causing significant financial hardship the world over, with the biggest impact felt among millennials and Generation X.

The latest weekly TransUnion global report, which compares the impact of the pandemic on household finances of 9 215 respondents in seven regions on five continents, found that household incomes of 84% South African millennials have been hurt by the pandemic, compared with the global average of 76%, while 79% of all other generations in South Africa are affected and 64% are globally.

Millennials make up a third of the world’s labour force, and their consumption habits contribute significantly to economic demand. Typically, they would have entered the job market during the last global recession and, compared with other generations, they entered the Covid-19 crisis with less income, assets and wealth – as well as more debt. The pandemic has hit this generation during their peak-earning years, when they were already on track to be the first generation in history to earn less than their parents, TransUnion says.

In South Africa, the financial choke-hold is tightening, as nearly a third of workers say their work hours have been reduced and 88% of consumers say they are concerned about their ability to service their debt. On average, respondents will be short about R7 000 in the near future and they expect to experience a shortfall in less than four weeks.

The survey, comparing South Africa, Canada, Colombia, Hong Kong, India, the UK and the US, tracks how consumers are affected differently by the economic fallout of the pandemic based on employer size, generational differences, government interventions and income dynamics.

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