It’s Hard Out Here For A Millennial
12:30 pm, March 26th | by Colette McIntyre
In a recent New York Times article, economists express major worries for Generation Y, the type of worries you would’ve preferred that they kept to themselves; I mean, you don’t really need it right now — you just cracked your iPad screen, the guy you’ve been kind of seeing isn’t answering your texts, you forgot to make a payment on your student loans this month, you have an audition in three hours and now, on top of all that, you’re being told that you have “financial melancholy?” Great. PERF.
“[Millennials] look at the house their parents live in and say, ‘I could work for 100 years and I couldn’t afford this place,’” said Neil Howe, author of the 1991 book Generations. “If that doesn’t make you focus on money, what would? Millennials have a very conventional notion of the American dream — a spouse, a house, a kid — but it is not going to be easy for them to get those things.”
Just how hard is it going to be for young millennials to have their white picket fence and 2.5 children? Urban Institute research found that even as the country has grown richer, Generations X and Y have amassed less wealth then the previous generation, their parents, had at the same age. While the average net worth of 56-to-64-year-olds has more than doubled since 1983, the average net worth of someone 29 to 37 has fallen 21 percent. As The Times‘ Annie Lowrey writes, “For the first time in modern memory, a whole generation might not prove wealthier than the one that had preceded it.”
The trend isn’t without precedent: economists have started comparing recent graduates during the millennial recession with recent graduates in the 1981-82 recession. The results have been grim. “My inclination is pessimism,” said Lisa Kahn, a labor economist at the Yale School of Management. “If anything, these guys might experience something worse.” Something worse than graduates who joined the work force during the 1980s recession is pretty bad — not only did higher unemployment rates upon graduation mean less earnings for 80s grads but “the effects were still present 15 or 20 years later,” Khan said. “They never made that money back.” After comparing initial wage losses, Khan feels the trend is set to repeat.
Other economists predict that Generation Y will spend less and save less. “I was talking with a mom who has a son in his mid-20s and told her the generation is not on the same wealth-building path,” said Signe-Mary McKernan, an Urban Institute researcher. “She had this look of terror on her face; our children are in trouble, and that’s such a worry for a parent.” Ugh; now we have economists and our parents worrying about us? We need a drink…
[Photo via CinemaBlend]