Millennials have often been accused of destroying industries from golf to home ownership, due to what analysts had previously assumed to be pickier spending habits. Most recently, the Wall Street Journal reported that canned tuna brands are struggling because of millennials.
However, a new report from the Federal Reserve has concluded that millennials actually display the same spending habits as their parents’ and grandparents’ generations. The difference is that millennials have less money to spend.
The Federal Reserve report, which considered millennials to be those born between 1981 and 1997, compared the generation’s spending habits to those of Generation X, baby boomers, the silent generation and the greatest generation at similar ages. While the overall habits at a side by side age comparison proved to be similar, millennials have less money to work with and therefore spend in smaller quantities.
“Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets and less wealth,” the study reported. The millennial generation has a net worth 20 percent lower than members of previous generations.
Even compared to Generation X, the demographic directly senior to millennials, the Federal Reserve noted a drastic difference. In 2001, young adult households of Generation X held an over 52 thousand dollars in financial assets. This is nearly 22 thousand dollars more than millennial households in 2016. Millennials have higher student loan debts, as well. In 2004, only 20 percent of Generation X members had a student loan balance, compared to over 33 percent of millenials with a balance in 2017.
It isn’t millennials’ faults
There has been a “generational blame game” over whether millennials are actually destroying the economy or if they entered into an economy that was already flawed. The anti-millennial argument says that the generation is spoiled, entitled and can’t find jobs. The pro-millennial side argues that baby boomers had already hurt millennials’ chances through hurting the housing market or retiring later, thus preventing millennials from buying homes or joining the workforce.
The argument can be settled once and for all. It isn’t the millenials’ faults, according to the Federal Reserve.
For one thing, there are more members of the millennial generation than any other. “Millennials became the largest generation in the United States in 2015, overtaking the baby boomer generation, which had been the largest for roughly 60 years,” the report stated, “Interestingly, Generation X never attained the status of being the largest generation.”
Millennials came to age during the Great Recession. This caused the generation a weak labor demand and tight credit conditions. Plus, new economic trends, such as higher healthcare expenses and a rise in college tuitions, have created further obstacles. The Federal Reserve report confirms that millennials are just like every other generation, they just didn’t have the same financial opportunities as those who came before them.
Millennials are not destroying industries by choice. They are simply victims of circumstance.