Millennials Face a Major Financial Hurdle That Has Nothing to Do With Student Debt
If you thought student debt is the reason a growing number of millennials have nothing saved, think again. A new report from the Resolution Foundation, a British think tank, finds that people in their 20s and 30s are earning significantly less than they did a generation ago.
Across eight high-income countries like the U.S., Germany and the U.K, millennials in their early 30s have household incomes four percent lower than members of Generation X (born between 1966 and 1980) had at the same age. In the U.S., that number is slightly worse: American millennials are making five percent less than Gen Xers were at the beginning of their careers in the U.S.
Developed countries once boasted of growing wealth and wages, but those days appear to be over. When they were in their early 30s, Gen Xers were making 30 percent more than the baby boomer generation that preceded them. But as the Foundation writes in the report, “the 20th century growth story that has seen each generation enjoy higher incomes than the one before them has ground to a halt in nearly all advanced economies in the 21st century.”
The Resolution Foundation is clear on the cause for this stark drop in income. “It’s no secret that the financial crisis hit the vast majority of advanced economies hard, holding back millennial income progress in countries around the world,” Daniel Tomlinson, policy analyst at the Resolution Foundation, writes.
Sure, young working Americans today spend more money on luxuries and comforts than other generations have. But the Resolution Foundation report shows that in addition to the burden of outstanding college loans, which ran an average of $37,1172 in 2016, millennials still struggle with the lasting impacts of the global recession. Maybe this knowledge will make older Americans think twice before blaming their financial woes on avocado toast in the future.