Millennials Financially Worse Off Than Their Parents Were As Young People
While President Barack Obama is leaving office claiming victory on the economy, millennials are financially worse off than their baby boomer parents were at the same age.
A new report looking at the economic situation of young people ages 25-34 found that millennials own and earn significantly less than their parents’ generation did as young people in the late 1980s.
“Millennials make up the greatest share of the workforce and the largest generation in history, so in many ways the situation facing young adults today forecasts the financial challenges ahead for the nation,” said Tom Allison, deputy director of policy and research for the millennial advocacy group Young Invincibles, which published the report.
According to the study, millennials are less financially secure than the baby boomers, amassing half the assets and half the net worth their parents’ generation.
In 1989, boomers between the ages of 25-34 had $61,277 in assets compared with the $29,350 in assets millennials had in 2013. Boomers, in that same timeframe, had an average net worth (or the difference between assets and liabilities) of $25,035 compared to millennials’ net worth of $10,900 in 2013.
Notably, millennials earn 20 percent less than the baby boomers did as young adults.
According to the report, which used data from the Federal Reserve Board of Governors, in 1989 Americans between the ages of 25 to 34 made an average of $50,910. In 2013, that same age group made $40,581.
The report chalks some of the disparity up to the fact that many millennials entered the workforce during the recession.
“Incomes earned early in one’s career often set the stage for lifetime earnings, with the highest growth occurring in the first decade of work,” the report reads. “Entering the job market during an economic downturn, essentially staring on a lower rung on the economic ladder, projects lower earnings for today’s young adults throughout their working lives.”
Homeownership among millennials is also down slightly compared to the baby boomers, according to the report. In 1989, 46 percent of 25 to 34-year-olds owned homes compared to 43 percent in 2013.
Those millennials with college degrees, however, were more likely to own homes than their baby boomer parents. Homeownership for those millennials without a college education was 22 percent lower than the ownership rate of baby boomers without a college degree, according to the report.