We’ve been told for years that millennials could be the first generation to be poorer than their parents. This was supposed proof of the end of America. This was the biggest indicator we were in late-stage capitalism. This was…maybe not true.
Rachel Louise Ensign over at The Wall Street Journal reports that Americans in their 30s are starting to bridge the wealth gap with prior generations.
- Closing The Gap: “In 2019, the net worth of households headed by people born in the 1980s was about 11% below where researchers expected it to be based on older Americans’ wealth at the same age, a huge improvement from the 40% gap in 2016.”
- Homeownership Goals: “The researchers also found that millennials now owned homes at rates similar to prior generations at the same age”
- The Same But Different: “…patterns of establishing wealth may have permanently shifted, Dr. Kent said. Young people now start off with more debt in their 20s but then start to pay that off, buy homes and build savings in their 30s.”
It turns out the college wage premium still holds its own. Many feared the skyrocketing cost of college and then the subsequent servicing of student loans had wiped away any long-term benefit of higher education. That does not appear to be the case. It’s kind of like our national debt. We keep thinking it’s gotten too high and then it turns out to not be a problem. That doesn’t mean it won’t be a problem in the future. It just means right its not as bad as we thought.
Millennials might be building wealth in a different way at a different pace, but they are getting there and in the end, that’s all that really matters to the economy.