Millennials are earning 20% less than baby boomers at the same age — despite being better educated, a new study has found.
Research published in a report by the nonprofit New America found that the Great Recession, which began in 2007, was largely to blame in the generational wealth divide.
“The data are clear that during the Great Recession, American families suffered widespread and deep income and wealth losses,” said the report issued late last month. “However, younger families were hit particularly hard; they experienced greater financial damage in percentage terms than did retirement-age families.”
Specifically, 18- to 34-year-olds earn less than that age group in the 1980s and a “volatile” flow of income could be why.
“A rise in freelance and contract work associated with employers’ drive for flexibility has shortened employment tenure, weakened access to employee benefits, and contributed to an overall decline in income,” researchers explained.
The study also found that millennials — those born between 1981 and 1996 — were more likely to be living in poverty than gen-Xers (1965-1980) and baby boomers (1946-1964) at similar ages with one in five officially classified as poor.
Lack of solid income has also affected other aspects of millennial life — the median age for a first marriage is currently five years older than it was in the 1960s and more millennials are choosing to live at home than previous generations, the study said.
Millennials are also putting having babies on hold, too. The overall birth rate hit a record low in 2018, with only 29 percent of women ages 18 to 29 having children — down from 41 percent in 1998, according to researchers.
“Millennials are going to be on a completely lower trajectory than previous generations,” Reid Cramer, director of the Millennials Initiative at New America, told CNBC, adding that the generational wealth gap as reached “historic proportions.”
The study found, however, that those born between 1980 and 1989 were part of the “most educated decade” — despite being saddled by rising college tuition costs and student loan debt.
Thirty-nine percent of millennials have a bachelor’s degree or higher, compared to about a quarter of baby boomers when they were the same age, according to a February report by the Pew Research Center.