By Janet Adamy and Paul Overberg, May 19, 2019
American millennials are approaching middle age in worse financial shape than every living generation ahead of them, lagging behind baby boomers and Generation X despite a decade of economic growth and falling unemployment. New data show they’re in worse financial shape than every preceding living generation and may never recover.
Hobbled by the financial crisis and recession that struck as they began their working life, Americans born between 1981 and 1996 have failed to match every other generation of young adults born since the Great Depression. They have less wealth, less property, lower marriage rates and fewer children, according to new data that compare generations at similar ages. Even with record levels of education, the troubles of millennials have delayed traditional adult milestones in ways expected to alter the nation’s demographic and economic contours through the end of the century. Millennials helped drive the number of U.S. births to their lowest levels in 32 years. That means fewer workers in the future to support Social Security and other public programs for the ballooning population of retirees. Social Security last month estimated that in 2035, after nearly all baby boomers retire, there will be 2.2 workers per beneficiary. Last year, there were 2.8. The current birthrate of around 1.8 children per woman is expected to create a Social Security deficit of nearly $2 trillion over the next 75 years.
As it approaches middle age, the millennial generation lags behind previous generations in building assets as it pays down student debt and defers marriage and home ownership. Prospects for a quick turnaround aren’t good. Men and women in their 30s are marring at rates below every other generation on record.
Growth in property values and the stock market this past decade helped older households regain ground since the recession. Millennials, though, have made little headway. “If I can’t afford a home, I definitely can’t afford kids,” said Joy Brown, 32 years old. She is a renter who is single and earns $75,000 a year. She also owes $102,000 in student loans and $100,000 in credit-card debt.
Mike Maughan, head of global insights at Qualtrics in Provo, Utah, which researches millennials, said the financial pictures of the generation is rosier than it appears:”Millennials are much scrappier than we give them credit for.” Employers have told Mr. Maughan that the desire of millennials for on-the-job feedback shows they are eager to improve their skills.
On the other bright spot: Millennials are entering their prime earning years just as baby boomers retire. That should fuel demand for their skills and lift their earnings. “The job market is so much better, so much stronger than it was 10 years ago,” said Mr. Emmons, of the St. Louis Fed. “That’s a huge benefit.”