Laura Banks was all smiles as she showed a guest around the split-level home in south St. Louis County that she and her and husband bought a year ago, days after returning from their honeymoon.
Built in the 1970s, the house has a lower level they’ve furnished with a big-screen TV and a vintage bar for entertaining. She grows herbs, tomatoes and sweet potatoes in the backyard.
Homeownership marks a major financial milestone for Banks, who graduated from college in 2009 when the unemployment rate was nearly 10 percent. It’s a sign that, like many millennials, she’s recovering financially after struggling to survive the Great Recession.
“I think we finally turned the corner. I mean we're sitting in my house,’’ she said. “So, that's really exciting.’’
But researchers say it’s possible that Banks and her peers will never catch up with older generations.
Banks was born in 1986 — midway through a decade that analysts at the Federal Reserve Bank of St. Louis say could become a “lost generation” when it comes to accumulating wealth.
Between 2010 and 2016 — when older age groups were recovering from the recession — children of the '80s lost ground, bogged down by credit card and student loan debt. The median wealth of families headed by millennials born between 1980 and 1989 remains 34 percent lower than earlier generations at the same age, the research shows.
The 1980s age cohort has not benefited from rebounding house prices and the surging stock market the way older households have because most aren’t invested in homes or stock, said Lowell Ricketts, lead analyst for the St. Louis Fed’s Center for Household Financial Stability, which produced the report.
“These families haven't had those tailwinds to their wealth accumulation,’’ he said.
The research hit home for Ricketts, who was born in 1987. He graduated in May 2009 from the University of Wisconsin at Madison.
“I had a lot of friends who had a hard time coming into that job market in 2009,’’ he said. “So I saw firsthand a lot of the difficulties people experienced trying to get their careers started and make those college degrees work for them.’’
Many college graduates were already deeply in the red when they entered the dismal U.S. labor market that had lost 8 million jobs during the recession. The cost of higher education doubled between 1987 and 2007. Average student loan debt was about $23,000 for graduating seniors in 2008.
On the other hand, it is education that might turn things around for the “lost generation,” the study concluded. The 1980s age cohort is the most educated of the groups studied, so it has the highest potential for earnings.
“One of the great strengths that this generation has going for them is their education,’’ Rickett said. “The past might not predict the direction that these families will go. I think there's a lot of anxiety amongst my generation — and rightfully so. But I'm hopeful. And I study these dismal numbers on a daily basis.’’
The “lost generation” study didn’t look at the racial wealth gap. But previous Federal Reserve research found that, as early as age 25, white college-educated adults have about $17,000 more wealth than young black adults who attended college. That’s because white parents were able to provide more financial assistance to children, enabling them to take on less student loan debt — and to pay it back faster.
Millennial survival stories
When St. Louis Public Radio asked millennials to share their experiences of graduating from college during the recession, many of them detailed years of working low-paying, survival jobs to make ends meet because there were no opportunities in their degree fields. The rate of underemployed college graduates who were working in jobs that don't require a college degree rose to nearly 50 percent in the years following the recession, according to the Federal Reserve Bank of New York.
Here are three perspectives from St. Louisans who graduated from college during the Great Recession:
Rachel Simon-Lee / Class of 2007
“We had to figure out a way to get by. We had to be creative, and we had to be flexible.’’
Rachel Simon-Lee, 33, graduated from Webster University in St. Louis in May 2007, expecting a long job search.
Although the Great Recession wouldn’t officially start until the following December, she knew the economy was in trouble. And her career field — video production — has traditionally required a certain amount of “paying dues.’’
“So I just took it as a part of the life we chose,’’ she said.
It would take four years of cobbling together freelance and part-time minimum-wage jobs before Simon-Lee would land her first full-time job.
In December 2011, after a 10-month internship with BJC HealthCare, she joined the company’s media production department.
Looking back, she recalls that her finances were so tight she had considered turning down the BJC internship because it meant quitting a part-time job assisting students in the video labs at Webster.
“I went back and forth because it was a pay cut — of like a dollar,’’ she said.
Simon-Lee is passionate about her job at Children’s Hospital: She edits and produces videos of children’s surgeries. The videos are used to educate doctors, as well as parents.
“I take all of the raw footage, and then I reduce it down to about a 10-minute video of the most essential parts of the case,’’ she said. “And then I can show a parent, ‘Here's what your child experienced.’’’
Simon-Lee recently launched her own company, Heartwork Videos, and produces freelance videos for surgeons across the country. She sacrifices free time with her wife to work on those projects at night and on weekends.
Millennials worked hard to survive the recession and deserve more credit than they often get, Simon-Lee said.
“We had to learn how to use skills in industries that we never thought that we would even go into,’’ she said. “I think the ingenuity and innovative thought that we were all forced into is our greatest asset.’’
Simon-Lee believes that entrepreneurial spirit will force changes in the workplace.
“We're not coming into jobs to stay for 15, 20, 30 years to sit at a desk and do something that we are not actively engaged in,’’ she said. “And we’re not afraid to work at small companies.’’
Simon-Lee, who grew up in Nashville, Tennessee, said there was never any question in her family that she would go to college, even though it meant taking out student loans.
“I didn't find out we were poor until this year,’’ she said, smiling. “Literally, I was at home and I was talking to my mom. And I was like, ‘Mom we were really poor,’ and she was like, ‘Girl, yes.’ ’’
Simon-Lee still makes a student loan payment of about $200 a month. She expects to pay it off in about five years.
Laura Banks / Class of 2009
Patrick Banks / Class of 2010
“We don’t trust that this isn’t going to happen again.”
In April, Laura Banks, 31, attended an educational session at the St. Louis Federal Reserve Bank, where researchers shared their “lost generation” study with the public. She related to the numbers, but suggested to the panelists that they should be taking into account another factor — how the recession changed the way millennials view the economy.
“We have less trust in employers because so many of our parents did lose their jobs, and they had been loyal to companies,’’ she said. “We have less trust in the stock market because it crashed. And I think that a lot of us are worried that it is going to happen again. We are either putting off big life moments and keeping money in our savings [accounts], or we're saying, ‘You know what? It could fall apart again tomorrow. Let's travel the world.'"
The national unemployment rate was nearly 10 percent when Banks graduated from St. Mary’s College in Notre Dame, Indiana, in May 2009. She moved back home with her parents while completing a four-month public relations internship with FleishmanHillard in St. Louis.
When she couldn’t find a job in St. Louis, Banks returned to Indiana and worked as an academic counselor at her alma mater. She shared a small apartment with two roommates but made just enough to cover rent and expenses.
“I had benefits. I got to travel. I got to represent my college,’’ Banks said. “I got to work with students, which I loved. But it was definitely below where I thought I would be with a college degree.’’
Eventually, she accepted a similar position at Saint Louis University, partly because she could return to her hometown and partly because free tuition was one of the benefits. After earning her master’s in business administration at SLU, Banks was hired this year as an account manager by Express Scripts. She’s excited about her job because it includes writing and editing, which uses her undergraduate degree, as well as her management skills.
Banks and her husband met at SLU, where he was also enrolled in the MBA program. Patrick Banks, 30, earned his undergraduate degree at SLU in 2010.
Because of the recession, Patrick Banks said he had to grow up quickly. He worked as a paid intern with Boeing while in college, and that led to a full-time job with the company when he graduated. He had to take out federal student loans but started paying them back while he was still in school because he was concerned about the accruing interest.
The recession affected everyone, but not to the same degree, said Patrick Banks.
“It was more traumatic for her than me,’’ he added.
The couple bought a home a year ago and plan to have children. But Laura Banks wants to build a financial cushion first.
“Biology is telling me to hurry up, but financially I'm scared,’’ she said. “That is something I think about a lot in terms of the lingering effects of the recession — how it has influenced my idea of financial stability.’’
Isaiah Melendez / Class of 2012
“I wouldn’t allow anything to stop me.”
Assistant principal Isaiah Melendez, 29, greeted students by name as he walked through the Normandy High School gymnasium during a recent volleyball game.
He makes it a point to know his students, he said. His goal is to be a role model for kids who are growing up without their fathers — like he did.
“Students reach back, and they tell me, ‘You made a difference. You inspire me. You believed in me when no one else did,’’’ he said.
Officially, the Great Recession had been over for three years, when Melendez graduated from Missouri Baptist University in St. Louis in 2012 with a degree in secondary education and honors. The university named him an outstanding student of achievement.
But the unemployment rate was still 7 percent in St. Louis, and teaching jobs were limited.
Melendez, who had been working at Walmart while he was in school, took a pay cut to begin his teaching career at a small Christian high school in St. Louis, he said.
“I made $22,000 at Walmart,’’ he said. “I made under $20,000 a year at the private school.’’
Melendez was born in 1988 and grew up on the south side of Chicago.
“My mom did all that she could to take care of me, but I was exposed to some of the violence in the city,’’ he said. “I had to learn how to fight at a very early age.”
Melendez moved to St. Louis to be near a woman he was dating and enrolled at St. Louis Community College. A professor there suggested that he consider a career in education.
“I reflected back on all of my experience and realized how education was key,’’ he said. “I don't remember one teacher throughout my high school experience asking me, ‘Hey, what's going on at home?’ ’’
Melendez wanted to work for the St. Louis Public School District, and said he became “hyper-vigilant” about networking. He was hired by the district to teach middle school in 2013. But he knew he wanted to be an administrator, so he earned his master’s degree at Missouri Baptist University.
Melendez loves his job, he said, but student loan debt is a challenge. He was able to use his father’s G.I. Bill benefits to pay his undergraduate tuition but used student loans to finance living expenses. He borrowed more to pay for his graduate degree.
As an educator, Melendez will eventually qualify for the public service loan forgiveness program, but he said it won’t cover all that he owes.
“I need to find a way to pay for that,’’ he said. “It is a weight that I carry.’’
Follow Mary Delach Leonard on Twitter: @marydleonard