Millennials (those born between 1980 and 1997 or so) have had major economic troubles despite being the most educated generation in American history. Over the past several years blaring headlines have announced that things like napkins and restaurants like Applebee’s are closing at an accelerated rate because younger people just aren’t buying those things. The headline always announced that Millennials are killing the item (food, diamonds, etc.) and it has become part of internet comedy where people make fun of what is being killed next by a generation firmly in their 30s.
However, the Federal Reserve has given us some fresh insight into the economic situation of this generation. Their conclusion? Poverty. The study shows that consumer behavior isn’t that divergent from older generations, however low wages and a lack of earnings from people who entered the economy during the last downturn have effected their trust in banking institutions as well as their ability to spend money. They just don’t have it.
Supporters of Bernie Sanders can take heart because the report goes on to blame income inequality and the rise of concentrations of wealth among the wealthy as problems that are holding this large generation back from participating in the economy. Things are starting to change in small ways. Car purchases have finally recovered. This may ultimately mean that the economic growth expected from this generation will simply be delayed for many years. The study shows that homeownership rates are not effected by avocado toast but by high student loan payments and high rents which making saving for a downpayment nearly impossible for all but the most well-paid millennials. Many people who have bought homes have relied on loan programs or help from family.
This will have long-term implications on the economy, especially as many are foregoing getting married to having children because it’s simply too expensive.
As it turns out the problem with Millennials is what they had been saying all along: they just don’t have the cash.