Millennials and baby boomers have been positioned as generational contrasts: One benefitted from a period of unprecedented economic growth and government programs that transferred trillions from the public sector to the private, enriching workers who happened to be at the right place at the right time. Meanwhile, the other can’t afford homes, can’t get out of debt, and can’t build wealth. But new research finds there is more financial difference within generations than between them.
It’s long been said that millennials, currently aged 28 to 43, are the first generation in modern American history that is, broadly, worse off than their parents. The costs of housing, health care, childcare, education, and more have all exploded, while wages haven’t kept pace. The oldest members of the generation famously entered the job market during the Great Recession, and millennials of all ages are also on the hook for paying for more of their inflated retirement costs out of their own pocket than their parents. All of these financial factors have pushed back the average age at which millennials have gotten married, started having kids, and bought homes.
But the research, published by the University of Chicago Press, finds that positioning millennials as solely worse off than the generations before them is slightly misleading. When looking at baby boomers—currently aged 59 to 78—the researchers found economic outcomes a bit more mixed. While it’s true the average millennial has 30% less wealth at age 35 than boomers at the same age, the richest 10% of millennials have 20% more wealth than the richest boomers did.
That’s because “late” baby boomers, now in their early 60s, also came of age during “major economic upheaval and adverse labor market conditions,” the researchers write. They were also hit hard during the Great Recession.
Other research has pointed out discrepancies in baby boomer wealth. The oldest members of the generation, now in their mid- to late-seventies, hold far more wealth than their younger counterparts, according to Federal Reserve data. In fact, Americans over 70 (both baby boomers and members of the Silent Generation) held 30% of the country’s wealth at the end of 2023, though they account for just 11% of the population.
In fact, late boomers—those born from 1958 to 1964—have “surprisingly low levels of retirement wealth compared to earlier cohorts,” reads a report from Boston College’s Center for Retirement Research. That’s due in part to Social Security’s Full Retirement Age being increased, the shift to using primarily 401(k)s and other defined contribution plans to save for retirement, and the financial hit they took during the Great Recession.
‘Concentrated at the top’
That doesn’t mean all is well for millennials. In fact, the University of Chicago Press researchers write that “concerns about the millennials’ economic well-being are generally well founded.” The wealth gap for this generation is representative of the larger increase in wealth inequality across American society over the past few decades. “Growth in aggregate wealth has been concentrated at the top of the distribution, with stagnant or even declining wealth for most of the population.”
While average U.S. household wealth almost doubled from 1989 to 2016—from $353,000 to $689,000—the median increased only marginally, from $87,000 to $97,000, the researchers note. Household wealth at the 90th percentile increased from $686,000 to $1,187,900, while remaining around $0 for the 10th percentile.
High-earning millennials (think tech workers) have been able to accumulate unprecedented wealth due to their skills, according to the report. “The returns to high-status work trajectories have increased, while the returns to low-status trajectories have stagnated or declined,” the researchers write.
Meanwhile, those without those specific skills, such as some blue-collar workers, are indeed worse off than previous generations. Millennials on average also have much more debt than other generations—much of it student loans and credit cards—lower levels of home ownership, and lower marriage rates, all of which greatly affect wealth accumulation.
“While millennials in advantageous work-family trajectories accumulated more wealth than their baby boomers counterparts, millennials with typical working-class life courses did no better, and sometimes worse, than those with equivalent lives in their parents’ generation,” the researchers write.
But there is some good news: Millennial wealth has increased significantly since the start of the pandemic. Recent reports from the Federal Reserve and the Center for American Progress find wealth is at all-time high for this generation, and that it grew faster for younger generations than older during this time period thanks to investments in stocks and other fast-growing assets. (That said, they still hold significantly less.)
The inflation-adjusted wealth for Americans under age 40 grew by an astounding 80% between Q1 2019 and Q3 2023, according to the New York Federal Reserve. During the same time period, wealth for those ages 40 to 54 grew 10%, while wealth for those 55 and older grew 30%.
The Center for American Progress’s report notes young Americans have benefitted from the strong labor market and “rapid wage growth.” Though inflation has taken a bite out of some of the gains in wealth made since the pandemic, millennials as a whole are still far better off than they were in 2019.
