Photo: Flickr / JAHPEACEFUL666
In a society where success is often equated with being financially better off than the generation prior, young Americans today are way behind the pack. The under-40 crowd in the U.S. has seen its wealth come to a standstill even as the average American household income grew, according to new research from the Urban Institute’s Opportunity and Ownership Project:
“Average household net worth, even with the fallout from the Great Recession, nearly doubled from 1983 to 2010, but not for those born after 1970. Their average inflation-adjusted wealth in 2010 was 7 per cent below similarly aged individuals in 1983.”
For millennials, the situation is even more grim. Compared to their parents at their age, the under-30 sect is worth only half as much.
And while this is a sobering reminder of the scale of the Great Recession’s impact on younger generations, it’s not the whole story.
These households were actually falling behind even before the stock market and housing crash, researchers found.
Young people not only saw their wages either stagnate or drop, but fixed costs are killing them. They leave college with an average $27,000 debt load and have a harder time finding jobs that pay well, while facing more expensive health care and housing costs.
“If these generations cannot accumulate wealth, they will be less able to support themselves when unexpected emergencies arise or when they eventually retire,” the study authors said. “This financial uncertainty could reverberate throughout the economy, since entrepreneurial activity, saving, and investment tend to build on a base of confidence and growing wealth.”
Here are a few sobering charts from the report.
Gen X and Y are way behind the back in terms of spending power.
And they’re not gaining any ground. Their wealth growth has pretty much hit the skids.
“Lost Generations?Wealth Building among Young Americans”While older generations have been able to save and build their wealth, younger generations have a negative net worth.
“Lost Generations?Wealth Building among Young Americans”
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