Even millennials with good jobs end up diverting much of their income to student loan repayment, rather than investing in the stock market or buying a home. (Photo: Shutterstock)
Millennials are way behind previous generations on a number of key financial metrics. Those born between 1981 and 1996 are burdened by significant student loan debt and the fact that many of them spent their first working years in the midst of an economic downturn.
Millennials are way behind the two preceding generations –– Generation X and baby boomers –– on several key financial metrics, according to an analysis by the Wall Street Journal. Their wages are lower, they have less money saved and they are less likely to own homes than their parents were at the same age.
In 2016, the average net worth of a household headed by those age 18 to 34 was roughly $92,000. In inflation-adjusted dollars, that was 40 percent lower than that of young households in 2001 and 20 percent lower than that of young households in 1989.
Similarly, only about a third of millennials owned homes in 2016, compared to half of young people in 2001 and just under half of young people in 1989.
The lackluster economic situation comes despite the fact that millennials are the most educated generation in history. A larger percentage of the generation has a bachelor's degree or a graduate degree than members of previous generations. A smaller percentage did not graduate from high school.
However, those degrees have come with a heavy cost. Between 2004 and 2017, the average student loan debt balance roughly doubled, to $10,600.
As a result, even those with good jobs end up diverting much of their income to loan repayment, rather than investing in the stock market or buying a home. This process has denied them much of the fruits of the past decade of economic growth.
Unfortunately, those who forgo higher education do not face good economic prospects either. More so than any time in the past, those without college degrees struggle to find good-paying jobs. Millennial households with college degrees have a median family income of about $105,000, which is more than twice that of households with only high school diplomas.
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