February 2, 2023

San Antonio Report
Nonprofit journalism for an informed community
The U.S. economy contracts as markets tumble. Russia’s invasion of Ukraine keep energy costs high and geopolitical nerves on edge. Inflation strains families and spurs repeated interest rate hikes.
It sure is starting to feel like a recession to this boomer.
Are we there yet? Economists who say yes and economists who say no can be found aplenty. I tend to gauge the mood of the middle class to render my judgment.
For millennials with only vague memories of the Great Recession, or Gen Z workers too young to remember, it’s worth thinking about how this next recession will affect you. The last one that hit 15 years ago, the Great Recession was the worst economic downturn since World War II. Recessions bring pain and spread it widely.
Many highly educated millennials graduated with university degrees during the Great Recession, which officially began in December 2007 and ended in June 2009, though most of us felt its severe impact before and after those dates. Good jobs were hard to find, and many found refuge in graduate school, acquiring new skills and learning while taking on even more student debt.
The more fortunate young professionals started their careers, found partners, and even saved enough to buy their first homes. A minority have even been confident enough to start families.

Many more millennials and Gen Zers, however, have found themselves in lesser-paying jobs, and they’ve shown no fear in dumping those jobs for new ones where the pay, benefits and culture suit them better. Marriage and children are topics they’d like to stop hearing about from their parents. Rescue dogs make more sense right now.
Student debt, steep rents and shocking utility bills have made saving for a down payment on a first home increasingly difficult, if not a pipe dream. A scarcity of affordable housing has caused entry-level home prices to rise beyond the reach of many even as they struggle to pay more in rent.
Last week, the U.S. Federal Reserve raised interest rates for the fifth time this year in a continuing effort to cool the economy and slow inflation. People struggling to understand the positive and negative impacts of the Fed’s monetary policy will find this Forbes Advisor article to be a helpful tutorial.
The recent announcement by President Joe Biden’s administration of a plan to forgive up to $20,000 in student debt was welcomed with mute recognition among the young professionals I have spoken with. For many, it represents only a fraction of what they owe. More immediate cash-flow challenges are the focus of their attention.
How to gird yourself to best survive a recession? First, stay employed. Companies already are shedding jobs as profit expectations dim, supply chain problems persist, and inflation eats into people’s purchasing power.
Second, spend less. Older Americans who have experienced one or more recessions already have been tightening their discretionary spending. Those of us approaching or entering retirement are watching life savings shrink. We will conserve resources until markets recover. That could be a long wait.
Spending less is not what everyone wants to hear. The hospitality industry, for example, is just beginning to recover from two years of pandemic chaos. Younger people spend a disproportionately higher percentage of their income on dining out, coffee shops and entertainment. In order to save, they’ll have to stay home more.
Third, save more money. Many young professionals are carrying so much student debt and paying such a high percentage of their take-home pay in rent and utilities that they cannot save much money.
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It may seem counterintuitive, but now more than ever you need a savings plan. Money tucked away now will grow over time, notwithstanding cyclical recessions. The compounded value of those savings over a period of decades, along with home ownership, have been the two pillars of wealth creation for my generation.
This next recession, unfortunately, isn’t just about the state of the economy. Here in the United States, the failure of Republicans to accept the results of the 2020 presidential election, the resulting Jan. 6 insurrection at the Capitol and the rise of far-right nationalists threaten American democracy. Russian President Vladimir Putin elevates anxiety levels everywhere with his threats to use nuclear weapons. And only the most ardent deniers can ignore the perils of a rapidly changing climate.
My fear as we enter this next recession is that we boomers leave our sons and daughters a far less secure nation and world. Let’s hope we ride out this storm, too.
Robert Rivard is co-founder and columnist at the San Antonio Report.


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