(NEXSTAR) — Millennials areoften stereotypedas lazy, entitled, and less wealthy than baby boomers. But the younger generation is not uniformly worse off, a new study claims.
They are, however, facing a widening wealth gap.
“The wealthiest millennials now have more than ever, while the poor are left further behind,” said the study’s lead author Rob Gruijters, an associate professor of education and international development at England’s University of Cambridge.
Millennials in their mid-30s are more likely to work low-paying service jobs and live with their parents, researchers found, but those with affluent middle-class lifestyles often have more wealth than boomers did at the same age.
The study, published in the American Journal of Sociology in September 2023, examined the work and family life trajectories of more than 6,000 boomers and 6,000 millennials in the U.S. It compared how these life decisions impacted their wealth by the time they turned 35.
Researchers from the University of Cambridge in the UK, Humboldt University in Germany, and Sciences Po University in France analyzed data from theNational Longitudinal Survey of Youth, a program of the U.S. Bureau of Labor Statistics, for the study.
Here are some of their key findings:
- Wealth:Millennials at the 90th percentile of wealth distribution in the U.S. possessed about 20% more wealth than boomers did at 35 ($457,000 vs. $373,000). However, the median millennial had 30% lower wealth than the median boomer at that age ($48,000 vs. $63,100).
- Career:Boomers were more likely to land high-status jobs, like lawyers or surgeons. Around 17% of boomers moved into “prestigious” career paths after graduating college, whereas just 7.3% of millennials did so.
- Homeownership:About 62% of boomers had become homeowners by 35, contrasting with the 49% homeownership rate among millennials at that age. Additionally, 10% of millennials lived with their parents at 35, compared to only 6% of boomers.
- Marriage:Millennials tended to postpone marriage. Approximately 27% of boomers got married and had children earlier, while only 13% of millennials followed a similar path.
- Debt:Millennials were also more likely to be in debt: 68% held any kind of debt at 35, compared to 43% of boomers.
- Net worth:About 14% of millennials had negative net worth by 35, which means their debts exceeded their assets, compared to only 8.7% of boomers.
Researchers claim the distribution of wealth among millennials is so uneven because the economic rewards for middle and upper-class lifestyles have increased, while those for the working class have either remained the same or declined.
“Individuals with typical working class careers, like truck drivers or hairdressers, used to be able to buy a home and build a modest level of assets, but this is more difficult for the younger generation,” said Gruijters.
According to the National Association of Realtors, the median age of first-time home buyers in today’s market is 36 — the oldest since the agency started collecting this specific data in 1981.
The NAR said that even though millennials are currently the largest American generation, they saw a “shrinking share” of buyers in the housing market last year. The agency said low inventory, high interest rates, and rising home prices are factors that could turn away potential buyers.
As for the wealth gap, researchers said progressive measures like wealth taxation, universal health insurance, a higher minimum wage and access to stable housing may help tighten it.
“We need to make it easier for those who are currently being left behind to accumulate wealth in the first place,” said study co-author Anette Fasang, a professor of microsociology at Humbolt University. “A slow and tentative approach won’t suffice. Significant action is needed to build a more equal society, where more people can experience some form of prosperity.”
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FAQs
14% of millennials had a negative net worth by 35 compared to just 8.7% of boomers whose debts exceeded their assets. By 35, just 43% of boomers held debt of any kind compared to 68% of millennials. About 49% of millennials owned a home by 35 compared to 62% of boomers.
Which generation has it the hardest financially? ›
Gen Zers are having a harder time making ends meet, let alone building wealth. Roughly 38% of Generation Z adults and millennials believe they face more difficulty feeling financially secure than their parents did at the same age, largely due to the economy, according to a recent Bankrate report.
Which generation holds the most wealth? ›
In the fourth quarter of 2023, 51.8 percent of the total wealth in the United States was owned by members of the baby boomer generation.
Are millenials worse off than boomers? ›
Millennials are not all worse off than their baby boomer counterparts, a new study from the University of Cambridge found after analyzing major differences in the life trajectories and wealth accumulation of the generations in the U.S. However, a stark and growing wealth gap exists between the two groups.
Are millennials less wealthy? ›
According to the study, the average millennial has 30% less wealth at the age of 35 than baby boomers did at the same age.
Which generation is struggling the most? ›
Data Dive: Gen Z women are struggling the most with stress, mental health issues | Ipsos.
Which generation quits the most? ›
Gen Z workers also report the highest rates of wanting to quit their jobs within the last three months compared to all other generations. In addition to feeling the least engaged in work, Gen Z also finds their responsibilities uninspiring.
Which generation is better off financially? ›
Millennials were between the ages of 23 and 38 in 2019, prime earning years. But their wealth grew much faster than how boomers and Gen Xers fared at that age. Millennials had a few things break their way, though. First, a strong post-pandemic job market allowed them to amp up their earning power.
What generation is in the most poverty? ›
Millennial and generation X cohorts are likely to face the highest working-age poverty rates to date, with almost a quarter of the 1991-95 cohort expected to be in relative poverty in their late 20s.
Which generation is the smartest? ›
A growing discourse suggests that Generation Z (Gen Z) is endowed with higher cognitive abilities compared to their predecessors, the Millennials. This assertion prompts an exploration into the unique characteristics and experiences that might contribute to the perception of heightened intelligence within Gen Z.
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Do millennials age slower? ›
Millennials ageing faster than their parents, studies and experts say; here's why — and how they can slow the process. Millennials – those born between 1981 and 1996 – are more health-conscious than preceding generations but are seeing their health decline faster than that of their parents as they age.
Which generation had it the easiest? ›
The supposition is that boomers had it easier: Homes could be had for a dime and a handshake, a single paycheck supported three kids with two cars and a white picket fence to boot, and you could work your way through college without going into debt.
Why do Millennials struggle financially? ›
Key Takeaways. Millennials are confronting the distinct financial challenges they have, such as a post-recession job market, high student loan debt balances, a more expensive housing market, and growing credit card debt.
What generation will inherit the most money? ›
However, over the next twenty years, Millennials are poised to inherit some $90 trillion of assets and become the richest generation in history – but only the ones who already come from affluent families, potentially deepening wealth inequality further.
Do Millennials have a lot of debt? ›
Americans — particularly Millennials and those with lower incomes — are becoming increasingly overextended financially: Credit card and auto loan delinquencies have not only surpassed pre-pandemic levels, they're the highest they've been in more than a decade.
What generation is the least financially literate? ›
Key Insights. Financial literacy tends to be low within each of the five generations, but particularly so among Gen Z. Two-thirds of Gen Z could answer only 50% or less of the index questions correctly. Within Gen Z, financial literacy tends to be lowest among those who have never attended college.
What generation is currently in the most debt? ›
The latest data shows that Generation X has the highest average amount of credit card debt at $8,134, and this is predicted to increase to $11,734 by 2030.
Which generation cares most about money? ›
Aligning on money is all the more pressing for younger generations, who are earlier on in their relationships and careers—nearly half (49%) of Gen Zers view financial compatibility as more important than physical compatibility. That's compared to 40% of millennials, 35% of Gen Xers, and 30% of baby boomers.
