Christian García (32 years old) seeks at all costs how to escape from the clutches of inflation. He says that traveling by car has become a luxury and that subscriptions to platforms have been reduced. streaming. It even keeps track of all the expenses you face from month to month. “500 euros for rent, 150 for gasoline, 120 between electricity and water, 37 for internet, 120 for mental health therapy and… food!”, She details. He considers himself lucky because he has a steady job as a computer scientist, but he admits that if prices don’t relax, it will become more and more difficult for him to get ahead and meet his personal expectations. “How can I expand my family when the salary is just enough to pay the rent, the car and the household bills?” he wonders.
Millennials — as the generation born between 1981 and 1996 is known — are used to living in uncertainty. Especially the older ones, those who are now 40 years old. They witnessed how the great financial crisis of 2008 narrowed their access to the labor market, reduced their aspirations and reduced their income. Just when the waters of the economy seemed calmer, the outbreak of the coronavirus pandemic cut short their dreams again. And there the whole group between 25 and 41 years old already suffered. In fact, a report prepared by the CaixaBank research service indicates that the income of the youngest fell by more than 20% at the start of this crisis, in 2020. The proportion is four times higher than that of adults .
To the bill of the pandemic is added these days another one that they had never seen. Now, in the form of price escalation. What’s more: millennials were used to an environment of very meager rises, if not deflation. That’s history. Inflation is close to double digits — in March it was 9.8% — the highest since 1985, and it threatens to erode his savings. The cocktail that drives prices up brings together numerous bitter ingredients for millennials. Going to the supermarket, refueling at gas stations, or even having a beer after work is more expensive and difficult to assume, especially for those who have just become independent or save little by little to take this step.
The millennial generation has been plunged into a world they did not expect. Pedro Rey, a professor at Esade, explains that high uncertainty entails two opposing phenomena. “On the one hand, there are young people who tend to slow down their purchases and are more forced to save. There have been so many hits against the wall that they are now much more aware of their expenses and more prudent. On the other hand, fearing that prices will continue to rise, others prefer to spend today and not tomorrow. But this is a more sophisticated behavior, in which the consumer’s ability to anticipate these phenomena and know how to accommodate them comes into play, ”he says.
Housing, the biggest expense
According to a Fedea report, before the pandemic, millennials already claimed to have lower pay than the previous generation. According to that study, in 2019, the real monthly salary of young people between 18 and 35 years old was lower than in 1980. With differences: it was 26% lower for those between 30 and 34 years old, but until 50% for those between 18 and 20 years old. That salary today suffers the bite of inflation. According to the National Institute of Statistics (INE), in 2020 the house ate a quarter of its payroll. Alberto Mollá Gómez, 25, has been sharing a flat with a colleague for a year in the Valencian neighborhood of Benimaclet. “Now living alone is unaffordable due to all the expenses that accumulate on a day-to-day basis. Between rent, water, electricity and the shopping basket I have to pay at least 1,000 euros every month. A year ago the electricity bill cost us 65 euros, while now it is worth more than double, ”he laments. The economic difficulties also cover his professional sphere. His freelance occupation as director of photography forces him to renew the team to guarantee the quality of service to clients. Still, you can’t afford to change your video camera and lenses every two years. “It would be an additional cost of between 6,000 and 8,000 euros,” he calculates.
He knows in depth all the sides of the coin.
Another 14% of millennial income went before this crisis to fill the fridge. Christian García goes to different supermarkets and pays attention to the prices to identify the foods that have become more expensive. “Tomatoes, potatoes and all products that contain flour or cereals have risen tremendously. I don’t eat croissants, but I’ve noticed that on Monday a bag can be 90 cents and on the weekend you can find it for 2.40 euros”, he adds. Consulting the applications of the distribution chains to compare and accumulate coupons has become essential before picking up the shopping cart.
The consultancy Kantar considers that millennials are not a group especially fond of sales. Even so, it has observed a 2% growth in promotional purchases in the last year. Among the purchase channels that have expanded the most (8%) among younger consumers, discount stores stand out. As a last resort, they give up whims that were previously indulged in more often. José Sánchez (30 years old) has cut buns and chips from his shopping list to prioritize basic products. “Sometimes it seems that you are not taking anything, but you are paying a fortune,” he notes.
Another of the habit changes to contain spending is to limit leisure. “If before the pandemic I went out to dinner with my girlfriend three times a week, now we do it half. But I would never give up Friday rods and play paddle tennis. That cannot be negotiated”, jokes José Sánchez. “Despite their desire to return to normality, young people have gotten used to going out less [por la pandemia]. Inflation will slow down the way out of the previous crisis, which was already strong and lasting”, adds Rey, referring to the blow suffered by the leisure and restaurant sector.
For those who have a vehicle, the rise in fuel prices is particularly painful. Millennials spend around 7% of their salary filling the tank and maintaining the car, according to the INE. But with the crisis, that proportion is increasing. At least for Carmen Tejeda, 27, who uses the car to go to work. She lives with her parents in the countryside in Badajoz and almost every day she travels about thirty kilometers to go and return with her fingers crossed so as not to remain in reserve. “My car is already 22 years old and I am forced to refuel every two weeks or sooner,” she says. With the rise, the fuel eats almost half of her salary.
A generation with less stability
Tejeda dreams of his independence. She has a part-time contract as a transportation monitor and is preparing an exam for Early Childhood Education. Her goal is to find a more stable full-time job as soon as possible that allows her to live on her own, although she believes that in the face of such an uncertain and changing scenario, her future hangs in the balance. “We are a generation with much less stability than that of our parents when they were 20 or 30 years old. The current system forces us to slow down the pace of life”, she complains. In Spain, barely three out of twenty young people between the ages of 16 and 29 have been able to emancipate themselves, according to the Spanish Youth Council.
The difficult economic times push this generation to rethink their scale of priorities. Adapt immediately. Change plans. The summer vacations continue, for the moment, among those of Sánchez. However, if prices do not stop rising, he does not rule out going back. “All expenses add up and the amount they add up is very large. But the real concern is not knowing where the end of this escalation is”, he ditches. For his part, Christian García, who now lives alone in an apartment in Valencia, is thinking of sharing a house with his partner. “We haven’t been here for a year, but if prices don’t go down, maybe we’ll move sooner to split the bills,” he says. Another option, he warns, would be to find a second job at night or on the weekend, as a cook or a computer teacher. In the face of uncertainty, this generation seems willing to grit its teeth in order to move forward.
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