America has always been the land of upward mobility. Impoverished immigrants struggled at any jobs to support their families. Their children reaped the benefits and enjoy greater opportunities. A college education, frequently enjoyed by the grandchildren of those immigrants, completed the upward spiral to a better life. Generational upward mobility was the American dream.
Today, millennials find themselves in a unique quandary. According to a study by Credit Suisse, the millennial generation will find it harder to simply to keep up with their parents, despite having a superior education and better training.
Most millennials will struggle to earn more money and find better jobs than their parents did at the same age, despite being better educated and more highly trained, according to a Credit Suisse study. No longer is a secure job and a house after graduation a given. Fifty percent of millennials are renting instead of owning their own home; more than 10 percent live in their parents’ house.
Baby boomers are working longer instead of retiring, thus blocking the jobs at the top. The best job prospects for millennials are in the tech industry, where their technology training is seen as an advantage. Otherwise, opportunities for millennials are narrowing.
In 2017, global wealth was estimated at $280 trillion. However, a mere one percent of the population owns 46 percent of that wealth. Seventy percent of global households have assets of only $10,000. Instead of closing, the income gap is widening, and many millennials are on the losing side of that chasm. They are less well off financially than their parents at their stage in life. And they face an uphill battle for the future.
Instead of a bright future, many millennials are facing a long financial struggle. They are encumbered by unprecedented student debts and high inflation. The average student loan is over $35,000. The price of a new home keeps climbing, and millennials will pay approximately 40 percent more for their first home than their parents did. Unlike past generations, millennials are starting out in the red. It will take them longer to save up for a house or retirement. Fewer millennials own their own home than prior generations at the same age, and high rents make saving more difficult.
The average millennial has around $2,500 in savings, while many have no savings at all. Some are still dependent on their parents for financial assistance, despite having a job.
A major problem is that millennials are experiencing the backlash of the Great Recession of 2007, with its resultant tight labor market and tighter credit regulations. In addition, they are facing higher health care cost than previous generations. Millennials have jobs, but their wages may not cover all of their debts and living necessities. Wages are down while the cost of living is soaring.
The good news is that millennials are better educated than prior generations, and education has always been the stepping stone to upward mobility and a better life. Millennials will merely have to wait longer to achieve their parents’ dream.
Millennials are delaying major life milestones, such as marriage, home ownership, and having children. Those most affected by financial disparity are from middle-income families. Lower-income millennials are more concerned with paying bills, while upper-income millennials already have the advantage of birth.
While middle-income families have traditionally encouraged their offspring to strive for a better life, the new millennials may be the first generation facing downward mobility.