Thanks to the recession, millennials born in the 1980s have vastly less wealth than previous generations, and are worse off than Gen X
It’s no secret that millennials get a lot of blame for a lot of things. If the headlines are to be believed, we’re responsible for the deaths of chain restaurants, napkins, diamonds, even divorce, as if that’s a bad thing. We’ve tried unsuccessfully to convince everyone we aren’t just murdering industries willy nilly; we just can’t afford that frivolous crap, Karen. Now, we have science to back us up.
A new study by economists from the Federal Reserve Bank of St. Louis looked at different generations, and how their wealth now compares to people of a similar age group in the past. While pretty much everyone born after 1960 is worse off than the people born before that year, the brokest generation by a lot is millennials — particularly, older millennials born in the 1980s.
Now, we know Gen X is gonna come for us with pitchforks raised and torches blazing over this. They got caught up in the housing bubble, and had to raise kids through the recession. They certainly didn’t come out of that unscathed. But the study showed that Gen Xers, born in and around the 1970s, have a median net worth 18 percent lower than past trends would predict for their age group. Households headed by millennials, though, born in and around the 1980s and early ’90s, are a whopping 34 percent behind in their net worth.
We don’t really need to be told that we’re poorer than previous generations. Boy, do we know it. But the numbers paint a starker and more shocking picture of what we’re actually up against. According to the study, the reasons are pretty much the housing market and our debt, namely, student debt. It’s not the Gen Xers have less debt than millennials do, it’s that a ton of their debt is in their homes, which have equity, especially now that the housing market has pretty much recovered from the bubble burst. Millennials, on the other hand, don’t own homes at the same rate as Gen Xers, but have mortgage-sized student loan debt with no equity. Isn’t that fun?
And it doesn’t sound like a situation that will come with a quick fix — in fact, it might never fully resolve for those born in and around the Reagan years. The study says 80’s babies could very well become “members of a lost generation for wealth accumulation.”
The authors behind the study do mention that they’re hopeful that millennials will be able to crawl out of this situation based on the fact that they’re also the most educated generation ever. But all that education came at a cost, which is what got us into this mess in the first place.
Anyway, hug a millennial today. There’s now scientific proof that we’ve got it pretty rough.