Did 9/11 make millennials much less rich?

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Michael Froggatt, now 38, had simply began his freshman yr at Millersville University in Pennsylvania when he, like tens of millions of different Americans, watched on tv because the second airplane hit the South Tower of the World Trade Center on the morning of September 11, 2001.

“I remember it very clearly. I was getting ready for class in my dorm, watching the reaction on TV and then the second plane hit,” Froggatt advised Al Jazeera. “Later in class, my professor looked really shaken, and confirmed for all of us that this day would change the world in a horrible way.”

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Kristin Buhagiar, who was 18 and living in Irvine, California on the time of the assaults, stated her mom woke her up screaming.

“I was asleep and woke up to my mom screaming ‘Wake up! Our country is under attack!’. I didn’t quite understand what was happening until I walked downstairs, saw the TV, and watched in horror as the second plane crashed,” Buhagiar advised Al Jazeera.

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Millennials, the era born between the early 1980s and the mid-2000s, have been younger adults, teenagers and youngsters as they watched the collapse of the World Trade Center towers and the dying of 1000’s of individuals on reside tv.

But did the trauma make millennials extra danger averse and due to this fact much less financially well-off?

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Some economists say ‘yes’, though they add that it’s troublesome to quantify how.

“Disasters do make people more risk avoidant in their choices,” Karna Basu, an Associate Professor of Economics at Hunter College and The Graduate Center on the City University of New York, advised Al Jazeera.

“This could be partly because people become fundamentally more aversive to risk, and partly because they now think the possibility of a future disaster is higher. Both these effects could indeed be subconscious,” he added.

With the world wanting much less safe, millennials might need been inclined to take measures equivalent to sustaining precautionary financial savings that they in any other case may have invested into riskier property like actual property or the inventory market.

“I felt an uncertainty that I hadn’t felt before,” Buhagiar stated. “What was going to happen next? Was this the first of many attacks? I was scared. I have never equated this uncertainty to my spending habits, at least on a conscious level. But perhaps it has been a factor. I can’t say either way with any certainty.”

Millennials have been youngsters, teenagers and younger adults as they witnessed the collapse of the World Trade Center towers and the dying of 1000’s of individuals on reside tv [File: Shannon Stapleton/Reuters]

Economic reasoning may also help us organise ideas about how disasters could have an effect on behaviour, says Basu, although he did level out that many of the physique of analysis carried out on monetary danger aversion and risk-taking behaviour focuses on the affect of pure disasters equivalent to earthquakes and floods or the loss of a kid.

Disasters do make individuals extra risk-avoidant of their selections.

Karna Basu, an Associate Professor of Economics at Hunter College and The Graduate Center on the City University of New York


Basu additionally underscored the distinction between danger aversion and risk-taking behaviour. The former is an outline of individuals’s preferences (i.e. what their elementary perspective in the direction of danger is), whereas the latter is an outline of the alternatives individuals really make.

“These choices are determined not just by our risk aversion, but also by our view of the world, our predictions for the future, and our guesses about the probability of future disasters,” he advised Al Jazeera.

Froggatt, who was in his first week of school on 9/11, says that whereas that occasion was probably the most remembered, it was not the one tragedy that formed how millennials view the world.

“Millennials not only dealt with 9/11 but the aftermath: the war on terror. Suddenly, we were told everyone hated us for wars and conflicts started by previous generations. On top of that, at home we were dealing with school shootings, taught to hide under our desks. We literally became a fearful generation,” he stated.

Generational wealth hole: ‘We’re standing outdoors wanting in’

Millennials are identified for suspending main life milestones equivalent to shopping for a home, getting married and beginning a household.

Families of these born within the 1980s and 1990s have much less median wealth than earlier generations on the identical time of their lives, based on the Federal Reserve Bank of St Louis.

“Younger families today simply have less wealth than younger families did in the past, while older families today have more wealth than older families did in the past,” Ana Hernández Kent, senior researcher for the Institute for Economic Equity on the Federal Reserve Bank of St Louis, advised Al Jazeera.

Millennials grew up in a world fairly completely different from that of the white-picket-fence preferrred of the Boomer era – these born into the affluent and social-safety-net period after World War II.

Younger households as we speak merely have much less wealth than youthful households did previously.

Ana Hernández Kent, senior researcher for the Institute for Economic Equity on the Federal Reserve Bank of St Louis

Older millennials, these of their mid-to-late 30s and this yr turning 40, who grew up within the period of mass college shootings and got here of age in opposition to the backdrop of 9/11 and the US “war on terror”, have been dealt one other whammy simply as they have been graduating from faculty with unprecedented ranges of pupil debt.

The Great Recession of 2007-2009 left the inventory market, actual property – and, most significantly for millennials, the roles market – in utter disarray.

And now one other cataclysmic occasion could lock many millennials out of rising their funds. Since March 2020, inventory and housing costs have skilled a historic rally because the coronavirus pandemic ravaged the US.

Those who have been positioned to benefit from swelling asset costs have seen their wealth develop. For those that weren’t, it’s yet one more financial hurdle with lifelong penalties, Hernández Kent advised Al Jazeera.

“This could make it more difficult for them to invest large amounts of money in the stock market or buy a house. These assets have appreciated rapidly in recent months, which is advantageous if you already have those assets, but makes it difficult to acquire them if you don’t,” she stated.

And millennials have but to expertise a decade with none main political or financial upheaval.

“We’re the first generation since the 1900s to deal with mass death on US soil, from 9/11 to the epidemic of gun violence and now a global pandemic,” Froggatt stated. “Of course, we’re cynical about investing because we’re standing outside looking in at earlier generations that practically closed the door behind them.”


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