Millennials have spent the majority of their adult lives haunted by the specter that they’re doing worse than their parents. If true, this would be a tragic result for the more than 72 million Americans born between 1981 and 1996.
Thankfully, it’s not.
While Millennials have endured their fair share of economic turbulence and hardships, including graduating into the worst economy since the Great Depression, they have managed to endure, and even prosper, especially in recent times.
It’s time to shed this misbegotten Millennial stereotype.
Myth 1: Millennials Make Less Than Their Parents
The idea that Millennials are doing well might be surprising to you if you were born in 1988.
These now 36-year-olds had the misfortune of entering the workforce in 2009, as the unemployment rate was flirting with 10%, the stock market had just bottomed out and the housing sector was still reeling from its bubble bursting.
A few years into their career, they were still struggling.
In 2013, median income was a little more than $68,000 (in 2023 dollars) for those households helmed by someone between 25 and 34, per the Census. That was about $10,000 less (accounting for inflation) than a similar family in 2000.
But as the economy began to recover through the latter part of the decade, so did their paychecks.
Those between the age of 25 and 34 earned an average of $84,600 in 2023, while those between 35 and 44 took in nearly $101,000; both figures far outstripped what earlier generations earned at similar ages, even adjusting for inflation.
The Truth
In the aftermath of the Great Recession, Millennials made less than earlier generations at a similar age. However, as the economy has recovered, so too have millennial earnings, so much so that they even out earn their parents. It’s worth remembering, too, that earlier generations struggled with recessions in the early 1990s and 2000s.
Myth 2: Millennial Wealth Is Lower Than Their Parents
The 1988ers have a similar story to tell with regard to net worth.
Things got off to a rocky start for Millennials thanks to an abysmal housing market that cratered at the end of the 2000s and took years to recover. For instance, the median home sales price peaked at $257,400 in the beginning of 2007 and then didn’t reach that level again until six years later.
Given the slowly convalescing labor market, it’s not surprising that Millennials fell behind. For instance, the median net worth of households led by someone under 35 was just $13,000 in 2013, per the Federal Reserve, compared to $22,000 in 2004. Millennials were poorer than earlier generations at a similar age.
With time, though, Millennials’ balance sheets improved dramatically.
Take housing.
Data from the Atlanta Fed Home Ownership Affordability Monitor showed that thanks to low interest rates and a growing economy, home prices were basically affordable, if not especially so, for most of the time between 2010 and 2020.
Moreover, the stock market has been on a tear since 2009, only letting up for a brief period during 2022. The S&P 500, for instance, has delivered an average annualized return of 11.80% over the past 15 years, according to Morningstar, boosting 401(k) balances.
The result is that Millennials (both older and younger) have more assets than their parents at a similar age.
The Truth
Millennials, who comprise the largest share of homebuyers, have a higher net worth than earlier generations at a similar age as home prices, and the stock market, soared for much of the past 15 years. Even after starting from behind, a 2024 report by the St. Louis Fed found that Millennial wealth was “37% above expectations” based on the experiences of previous generations.
Myth 3: Millennials Are Drowning In Student Loan Debt
Millennials have had to deal with college costs, and subsequent debt, in a way that their parents just didn’t.
The average yearly all-in cost for all 4-year institutions in 1980 was a little more than $12,200 (in 2022-2023 dollars), per the National Center for Educational Statistics, compared to about $29,200 in 2010.
In fact, it was about 240% (in constant dollars) more expensive to graduate from a four-year college in 2013 ($120,400) as it was to do so 30 years earlier ($50,400).
And millennials have the debt to show for it.
The average cumulative debt in the 2011-2012 school year for undergraduate borrowers at four-year institutions was about $33,000 (in 2022 dollars), according to the College Board, while 60% of graduates took out loans to pay for their college.
While this debt is real, it’s manageable for most millennials. Only 7% of those with a college degree said they’re behind on their student loan payments in the 2024 Federal Reserve Report on Economic Well-Being.
No one wants to start off their career with a big IOU, but conventional wisdom says that you should only borrow as much as you expect to earn once you enter the workforce. The median salary for those between 15 and 24 in 2023, per the Census, was $48,680, much more than the typical amount borrowed.
The Truth
While most millennials had to take on debt to finance their education, the cost to do so has been reasonable for most borrowers. This is especially true given the low interest rates at the time the debt was taken on, and the fact that those with a college degree earn more and have better employment prospects. Moreover, the federal government allowed federal student loan borrowers to pause payments interest-free for more than three years between 2020 and 2023, freeing up borrowers to save their payments or spend them elsewhere.
Not All Millennials Are Prospering—But Most Are
There are, of course, millennials who are struggling.
It’s not difficult to imagine that our person born in 1988 struggled to find gainful, rewarding employment for years after. Perhaps they missed out on affordable real estate prices in the latter half of the 2010s because they hadn’t yet had time to build up savings for a down payment.
Perhaps they had to go to graduate school, taking on yet more debt, and had only established themselves in their career when the pandemic struck and they were laid off.
They’ve been able to scrape by with the help of friends and family, as well as plush Covid-era benefits, their 401(k) is negligible because they’ve never been at a job long enough to meaningfully save.
This story, or at least parts of it, isn’t uncommon.
But it’s not the experience of the typical Millennial who has seen their wages and net worth spike as the economy fully recovered from the Great Recession.
The typical Millennial enjoys higher wages, and a bigger net worth, than their parents did at a similar age.
Like generations before, Millennials have struggled through tough times. But they’re no longer behind, and are instead, prospering.
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