By: Lucy Erika Ann Magat
Photo Courtesy of millennials-vs-boomers-home
Millennials or Generation Y are adults born from 1981 to 1996. This generation has 73 million people living in the United States alone and surpasses the baby boomer generation as the largest generation in terms of numbers, according to www.pewresearch.org. Van Dam states that “They are also the second most educated generation next to Generation Z.” However, statistics show that despite their large numbers and better education, this generation is the poorest by only holding three percent of the country’s wealth compared to the twenty-one percent wealth held by baby boomers, according to www.federalreserve.gov. It is shown that even Generation Z (those born between 1997 to 2012) controlled six percent of the nation’s wealth. In addition, millennials have also been amassing a great deal of debt in comparison to their ancestors. How and why is this happening?
According to Van Dam, one of the major factors that puts the millennial generation at a great disadvantage is their entering the workforce during one of the slowest economic growth periods in comparison to other generations. This is also evident among their wages. From 2007 to 2017 the median income only rose about 0.3 percent per year but during the 1980s and 1990s, it rose almost one percent annually, states Reich. Their working years also coincide with the Great Recession (2007-2009) when the average millennial lost about thirteen percent of their earnings in contrast to the seven percent loss of the average baby boomer and nine percent of the average Gen X, which are those born from 1965 to 1980. The odds are stacked against the millennial generation as their stagnant incomes come with extreme increases in costs for necessities like housing, food and health care.
Moreover, this generation has been raised with the teachings of “The better the education you get, the higher salary you will make.” While this is true, the cost of education has made it impossible for some to catch up financially after graduation, or even get a degree to begin with. The student loan debt of 1.5 trillion is now considered a crisis that millennials are suffering from the most as the cost of college has increased 68 percent from what it used to be since the year 2000, according to www.newamerica.org. To make matters even worse, well-paying jobs often require a master’s degree. This only further contributes to student loan debt. On average, a millennial is $33,000 in debt by the time they reach 30, according to Lowrey.
How does this affect the nation as a whole?
The financial issues of one generation may not seem like a big deal to others but because of the millennial generation’s size, its impact is felt across the nation. Due to their debt, data shows that many millennials are hitting pause on the “milestones” of an average American life. Fewer millennials are getting married, buying homes or having children (at least until later). According to a Pew Research Study, about 52 percent of the American millennials are living with their parents instead of being homeowners, which is a statistic that has not been reached since the Great Depression. This lower percentage of homeowners among millennials (in comparison to previous generations) is affecting the housing market. Pushing off big decisions like this to a later time also means decreasing population growth for the United States. Data shows from 2018 that the American population has hit a stagnant wall as the population growth is at its lowest, which has not happened since 1937, according to Frey. This means that there will be a smaller workforce that will have to offset the larger aging population but Frey indicates that this can be achieved with the number of immigrants the United States receives yearly.
The millennial generation has gained a stereotype of prioritizing unnecessary items with memes relating back to spending absurd money on avocado toast and iced coffee (which were commentaries from millionaires). With actual necessities costing more than they can afford, millennial hardships are unending, especially with the pandemic still occurring. There seems to be no end to their financial misfortune. Where will this leave future generations? Only time will tell.