Millennials Lag Behind Baby Boomers in Income and Net Worth

Millennials Lag Behind Baby Boomers in Income and Net Worth

The Associated Press highlights a new analysis confirming that millennials in the US today are worse off than their baby boomer parents were at the same stage of life a generation ago:

With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles. The analysis being released Friday gives concrete details about a troubling generational divide that helps to explain much of the anxiety that defined the 2016 election. Millennials have half the net worth of boomers. Their home ownership rate is lower, while their student debt is drastically higher. …

The analysis of the Fed data shows the extent of the decline. It compared 25 to 34 year-olds in 2013, the most recent year available, to the same age group in 1989 after adjusting for inflation. Education does help boost incomes. But the median college-educated millennial with student debt is only earning slightly more than a baby boomer without a degree did in 1989. … The median net worth of millennials is $10,090, 56 percent less than it was for boomers.

Much ink has been spilled over the supposed differences between millennials and their predecessors, and many of these supposedly inherent differences are severely overblown, but one that appears to be real and significant is that millennials have come of age in a period of major economic uncertainty and disruption.

To the extent that millennials have distinctive attitudes and behaviors, these derive from financial insecurity as much as anything else. For example, one recent study suggested that the reason millennials are a bit more interested than their elders in work-life balance is that they have relatively low levels of wellbeing.

(CEB Corporate Leadership Council members can read more here about how to manage millennials without falling for the myths.)