Millennials that are in or approaching their high earnings years are finding out that they are not as prosperous as previous generations. The problem is high debt and the effects of having lived through two deep recessions early in their careers. From the Wall Street Journal:
Older millennials in their high-earning years are also still working to recover lost ground from previous bouts of unemployment or underemployment caused by the 2008 financial crisis, according to a 2020 study from the National Bureau of Economic Research.
“You carry that with you for a long time, maybe your whole career,” said William Gale, one of the authors of the study and a senior fellow in the Economic Studies program at the Brookings Institution.
Do you, or does someone you know, expect the late 30s to early 50s to be the high-earning years? Join the conversation below.
The study—which examined household wealth across generations using data from the Survey of Consumer Finances, a survey conducted every three years by the Federal Reserve—found that the 2007-09 recession significantly reduced wealth for all age groups, and younger cohorts in particular. In 2016, millennial households held around 12% less wealth than did households headed by a person of the same age in 1989.
In 2019, the Federal Reserve Bank of St. Louis found older millennials’ debt-to-income ratios to be 23% higher than expected, based on previous generations at similar ages.
The overall real average wage of 2018 had the same purchasing power as it did 40 years ago, Drew DeSilver, a senior writer at Pew Research Center, wrote in an article. That means despite the strong gains in earnings and a growing post-pandemic labor market, many millennial households may not see more flexibility in their budgets, according to Mr. DeSilver.
No comments:
Post a Comment