Personal Finance

Published: October 26, 2024 8:30 a.m.

Millennials have been called “the unluckiest generation” by the Washington Post. and not without reason. This generation has experienced massive economic disruption, including more recessions and slower economic growth than any other generation in history, record levels of youth unemployment, high levels of student debt, child care costs, raised children and much more.

They are the children of Baby Boomers and older Generation X and the parents of Generation Alpha. They are the first generation to have grown up with the Internet and the first to be described as a global generation.

By almost every metric, millennials are the first generation in living memory to do worse than their parents.

But what other surprises await millennials around the corner? As this cohort takes over the reins from the Gen X and Boomer generations, what landmines have been placed in their path?

Stock market and retirement

Statistically, the job market in the United States has been stagnant since 2000 and the number of people under the age of 20 continues to grow, eliminating older people from the job market. As a result, the youth unemployment rate in the United States reached a record 19% in 2010, hitting millennials in the gut.

Moreover, as people live longer and right-wing governments erode worker protections and industrial regulations, unemployment has become a bigger problem than ever. In the last decade alone, half of all college graduates report being underemployed or unemployed.

Of all the generations that experienced the Great Recession, Millennials benefited the least, seeing their average income fall twice as fast as the rest of the population and working more hours with fewer benefits. social benefits for lower wages than baby boomers and Generation X.

All of this has prevented Millennials from taking advantage of the strong stock market and economic growth in the United States. In the United States, two-thirds of Millennials say they cannot save enough for retirement. The reason? Student debt and expensive housing. Companies are also increasingly hiring for short-term and freelance roles, meaning Millennials have less money to invest in the stock market or for retirement.

In 1995, the average net worth of a head of household under 35 was $20,000. Today it’s $11,000. In 2016, the average Millennial owned $162,000 in assets, while Generation X owned $198,000 at the same age in 2001.

What does this mean? This means that many Millennials I may not be able to retire at all.and in fact, most Millennials are already planning to delay retirement as long as possible. Since most Millennials have no retirement savings, to retire with 50% of their pre-retirement salary, Millennials will need to save 40% of their income over the next 30 years.

With the rising cost of groceries, rent, housing and almost everything else, this goal seems unachievable.

The cost of higher education

It’s no secret that Millennials have been the least advantaged when it comes to college. With record-high tuition costs and low wages, many Millennials will pay off their student loans until they die (even if they file for bankruptcy since student loans are forgiven).

However, what many people are starting to realize is that the problem is about to get worse as the children raised by Millennials get older. They will also be faced with the choice of attending college, and if current trends continue, none of them will have a choice. will be able to afford it.

The United States has one of the most expensive higher education systems in the world. Most college was free until the 1960s, when right-wing politicians began defunding colleges (led, of course, by Ronald Reagan in California). This effort to eliminate public funding of schools continued until in 2011, America’s public universities made more money from tuition than from state funding, for the first time times in history.

Today, the weighted average cost of a year of college in the United States is $11,260 for a public school and $41,540 for private schools. This of course does not include accommodation, food, books or other costs.

Already, 43% of students do not attend the school of their choice due to costs, and studies show that poor students are more likely to drop out of college to avoid accumulating debt and that families in the middle class will be disadvantaged because they cannot afford it. the kind of education that will help them succeed among their peers.

Rising tuition costs have also been shown to be directly responsible for the rise in student suicides. Mental stress, anxiety and the mental and emotional consequences of such debt have become a public health problem that is beginning to worry many governments.

So how are millennial parents going to pay their children’s college tuition when they haven’t been able to pay their own? Excellent question. If things stay as they are today, they won’t be able to do it.

The housing market

Initially, Millennials were the driving force behind the strong growth of cities and metropolitan areas, but as corporate landowners raised rent prices beyond reasonable levels, they were forced to live in mini-apartments ( spaces of 300 square feet or less) to be able to afford to rent.

As rents continued to rise but wages remained stagnant, millennials began leaving big cities, like previous generations, but had not been able to save enough money to buy a home like previous generations. In 2018, only 34% of people under 35 owned a home while the national average was around 64%.

This is largely due to large corporations buying thousands of single-family homes and holding them or renting them out at exorbitant prices.

Today, about 28% of Millennials are still renting while 12% still live with their parents or other family members. The most common reason they all gave is that they can’t save enough money for a down payment. Millennials are even less likely to own a home than any previous generation.

What does this mean? It’s well known that owning a home and growing your net worth is one of the best ways to save for retirement. Without housing, Millennials are missing out on these savings and the economic growth and benefits that come with them. As housing prices continue to rise and worker protections erode, Millennials (and their children) will be forced to accept more expensive housing while enjoying fewer amenities than their parents.

Inflation/Greed and wage stagnation

Most of the laws that regulate our labor market were written between 1935 and 1974, and right-wing politicians, with corporate support, have never stopped trying to erode the rights these laws were supposed to protect.

The federal minimum wage reached its maximum purchasing power in 1968 at $1.60 (about $14.50 in 2023) and was last increased to $7.25 in 2009. It has not followed inflation and has not been adjusted since.

Roosevelt’s New Deal created a thriving American economy from which the Baby Boomer and Gen X generations benefited and prospered. However, much of the progress made in labor protections has been erased over the years, leaving Millennials struggling in a backward and stagnant job market. Republican presidents steadily increased unemployment after the war and Democratic presidents reduced it and implemented labor protections while Republicans (with the help of the Supreme Court) rolled them back.

Today, job security laws in the United States are the weakest of any developed country. As our government erodes the bargaining power of unions, limits employee power, and allows corporations to exploit and even kill their employees, Millennials find themselves underpaid and overworked.

While wages remain stagnant, the same politicians who eroded worker protections and refused to raise the minimum wage have relaxed regulations on our businesses, meaning they can inflate their prices, exploit foreign workers and avoiding taxes while federal agencies are almost powerless to stop them. U.S. companies have posted record profits since the COVID-19 pandemic, far outpacing inflation and business growth, with the main driver of those profits being high consumer prices, making joining the ends become more and more difficult every year, even if we ignore everything else.

This means that while the need for Millennials to earn enough money for retirement becomes more and more pressing, the ability to do so is increasingly difficult.