Millennials might become the first generation to fare worse economically than their parents, new research shows.
Whoopi Goldberg recently blamed Millennials’ financial woes on their work ethic, saying they only want to work four hours a day and just don’t “bust their butts” like her generation did.
“I’m sorry, if you only want to work four hoursit’s going to be harder for you to have a house,” the Baby Boomer Sister Act star with an estimated net worth of $60 million said on last Wednesday’s episode. View.
But in reality, new research shows that millennials in the UK are actually worse off than their parents.
It is according to the Resolution Foundation Annual Intergenerational Auditwhich found that millennials – which the study defines as those born between 1981 and 2000 – still bear the “economic scars” of the 2008 financial crisis.
Historically, young people earn on average more than their parents at the same stage of life, but according to the researchers, this trend has been broken for the first time since records began.
“Millennials born in the late 1980s earned on average 8% less at age 30 than members of Generation X, born 10 years earlier, at the same age,” the report said. “Millennial cohorts were the first to see no income progression across cohorts for much of the decade before the financial crisis. »
In the UK, people born in the late 1980s and early 1990s still earn no more than those born in the 1970s at the same age, the think tank said.
People now in their 30s have experienced more than two decades of lost progress in wages, the report says, with UK millennials now on lower incomes than before the financial crisis.
But across the Atlantic, American millennials are doing much better.
Despite a ‘rough start,’ millennials in the US are ‘thriving’
The 2008 crash also significantly dented the earning capacity of American millennials, but they are now starting to catch up with their parents.
The income of this generation was 21% higher in 2021 than in 2007. “It is possible that, despite “a difficult start, the generation is prospering”, welcomes the Resolution Foundation report.
But, with an age gap of almost 20 years between the oldest and youngest millennials, research suggests that these gains are felt primarily by the “oldest” in the group.
In 2016, older millennials – those born in the 1980s – were 40% below wealth expectations, based on the wealth trajectory of previous generations. Today, this gap has narrowed considerably: in 2019, they faced a deficit of only 11%.
“Young people in advanced economies have been hit by the financial crisis, reversing decades of progress. Fifteen years later, this ‘crisis cohort’ is no longer young,” said Sophie Hale, senior economist at the think tank. Guardian.
Even in Britain, millennials are doing better as they age: at age 29, the cohort born between 1981 and 1985 had 14% less wealth than those born between 1976 and 1980, at the same age. But by age 33, this gap had narrowed to 2%.
But homeownership remains a pipe dream for many.
While Oscar winner Goldberg insisted that young people can’t access housing because they’re lazy, research shows otherwise.
As Goldberg’s Millennial co-host Alyssa Farah pointed out, her generation is waiting to have children and must live with their parents until adulthood because it’s very expensive to buy a house and to start a family.
“You gave us all a housing crisis,” Farah told the baby boomers – and she’s not wrong: Today’s young people are much less likely to own their own homes than previous generations.
At the turn of the millennium, 67% of households aged 30-34 in the UK were homeowners, but by 2021 this figure had fallen by 20%. By comparison, in the United States, homeownership among this age group declined much less, from 56% to 50%.
However, as the researchers point out, “historically lower homeownership rates among baby boomers and Gen for American Millennials to catch up with previous generations than for the United Kingdom. » counterpart.”
Ultimately, declining homeownership rates among millennials despite the narrowing wealth gap (at least in the U.S.) suggests they are missing out because the housing market is outpacing growth wages – not because they are a generation of job cheats, as Goldberg suggested.
Separate search, based on census data, found that although house prices jumped 118% over the past 50 years, after accounting for inflation, incomes rose only 15%. Moreover, if housing prices had increased at the same rate as incomes since 1985, the median house in the United States would cost about $261,650 instead of $433,100.
At the same time, with mortgage rates around 8% and house prices rising, housing affordability is actually worse today than during the 2008 financial crash.
