The debate over financial matters between the Baby Boomers (1946-1964) and the Millennials (1981-1996) isn't ending anytime soon. While Baby Boomers constantly tell the younger generation to work harder and embrace the 'hustle culture,' Millennials argue that they face greater financial challenges than their predecessors. Though the discussion is far from straightforward, there is a consensus that Baby Boomers enjoyed a more robust financial foundation compared to the current generation, which struggles with weaker economic stability.
Robert Reich, an admitted Baby Boomer and former Secretary of Labor in the Clinton Administration, took to the Internet to explain this difference. "Millennials aren't teenagers anymore," Reich said. "They're working hard, starting families, and trying to build wealth. But as a generation, they're way behind," he said, adding that the younger generation is half as likely to live in poverty than their parents. In the video and the blog post, Reich lists four main reasons why this difference exists.
He begins by saying that the Millennials are no longer teenagers and are working pretty hard and earning well. Yet, "as a generation" they are behind. He said that the generation is pretty deep in debt and is more likely to live in poverty. Reich said that one of the major reasons why they are falling behind is "stagnant wages." He said the median wages grew only 0.3% between 2007 and 2017. The millennials were starting their careers during these years. He then compared the median wages to that of the mid-80s and '90s when the wage growth was over three times what it was between 2007 and 2017.
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Then he said that the previous generation was able to build wealth through real estate, as the housing costs were not as exorbitant as they are today. "The median home price in 1980 was $147,000 in today's dollars and then $178,000 in 2000," he said. He also talked about the fact that the younger generation is already deep in debt. Most millennials have huge amounts of student loan debt, and that an average young adult carries around $5,000 in credit card debt.
"Education costs have soared. Adjusted for inflation, the average college education in 2018 cost nearly three times what it did in 1978," he said.
Lastly, he talked about how it has become very difficult to save, all because of the sky-high cost of living in the US. "All of this means that fewer Millennials are entering the middle class than previous generations. Most have less than $1,000 in savings. Many young people today won't be able to retire until 75, if at all," he writes in his blogpost.
Reich says that there's still time to take steps and improve the financial stability of the millennials which is to lessen the huge wealth gap between the two cohorts. He says how debt relief, universal healthcare, affordable housing, and a more equitable tax code for renters are ways in which the government can help the younger generation gain stronger financial footing.
This article originally appeared 1 month ago.
