Millennials are often judged by baby boomers for being at different stages in their lives compared to them. I know I've been to countless family dinners where the boomers in my family say things like "well, I had a house by your age" or "I would never have had that much debt" or "maybe you shouldn't be buying so many avocados, we didn't." While they might be right about them owning a house, it's not entirely our fault we can't afford it. A new report shows that millennials are making less money than baby boomers did at the same age.
Overall, millennials are earning 20% less than baby boomers did at the same stage of life, according to "The Emerging Millennial Wealth Gap," a new report from the nonprofit, nonpartisan think tank New America. For those aged 18-34, median earnings are lower than they were in the 1980s. To make things worse, the flow of today's paycheques is less predictable due, in part, to the effects of the Recession and a rise in contract and freelance positions (a.k.a. the new "gig" economy) that are often less consistent in hours and pay.
The worst part of it all is that we're earning less money, but we're more educated than the boomers were at our age. Nearly 40% of millennials aged 25 to 37 have at least a bachelor's degree, compared to only a quarter of boomers and 30% of Gen X when they were the same age, according to Pew Research Center.
These lower income levels are having long term impacts on millennial's ability to accumulate wealth, either through savings or home equity. The average millennial's wealth in 2016 was 41% less than those who were at a similar age in 1989, the report says.
"Millennials are going to be on a completely lower trajectory than previous generations," says Reid Cramer, director of the Millennials Initiative at New America. "There's just less available to do everything else with, including build wealth and save."
Part of the issue for older millennials can be attributed to the Great Recession and its aftereffects. There were fewer job opportunities, lower wages, and higher college tuition costs, which led to higher student loans and debt rates.
All of these income and wealth challenges not only give us daily stress and anxiety, but they also transcend into other parts of our lives that you may not even have realized. There are fewer people in this generation that are getting married, buying homes, starting families, and just generally experiencing delays in these life milestones. Marriage rates for millennials are estimated to drop by 70% and a record number will still be unmarried by age 40, according to the Urban Insitute.
Now next time you're at a family gathering and they're all judging you hard for your position in life, you can follow your "ok, boomer" with these facts about how we're smarter and working harder, yet still behind in wealth. You can't just blame the avocados people!