The question of whether Millennials — individuals born between the early 1980s to mid-1990s — are doing economically better or worse than previous generations remains a highly debated subject. Millennials are widely seen as the “precarious generation,” bearing the brunt of increasing inequality and instability in American society. In 2017, the Financial Times described them as “the first generation that is worse off than their parents.” 

However, these gloomy narratives are contradicted by recent reports suggesting that young Americans’ wealth is booming, with Millennials set to become the richest generation in history. Most of these reports are based on newly released data from the Federal Reserve Board’s Survey of Consumer Finances (SCF).

Held every three years since 1989, the SCF is the most comprehensive survey of American households’ income and wealth. By comparing the same age groups in different survey waves, we can assess how the distribution of wealth changed across generations. For example, people who were 30-39 in 1992 belong to the (late) Baby Boomer generation (born 1953-1962), people who were 30-39 in 2007 belong to Generation X (born 1968-1977), and people who were 30-39 in 2022 are Millennials (born 1983-1992). 

The figure below shows the average household wealth of 30- to 39-year-olds across years with the three aforementioned generations highlighted in blue, red and yellow.

The graph confirms the recent increase in young households’ wealth: after a long period of stagnation and decline, the household wealth of individuals aged 30-39 increased by an astonishing 62 percent between 2019 and 2022. As a result, Millennials in 2022 had substantially higher levels of average wealth than previous generations at the same age. So, is it time to revisit the narrative of the “broke Millennial”?

Framing the question in this way is somewhat misleading. It suggests that there is a typical or average Millennial, who we can compare to the average Baby Boomer. However, Millennials are a heterogeneous group, and it is therefore not particularly meaningful to talk about the ‘average’ Millennial experience.

There are some Millennials who are doing extremely well — think Mark Zuckerberg (1984), with a net worth of $164,500,000,000 — while others remain mired in debt. Comparing generations in terms of their average economic outcomes overlooks the vast discrepancies within generations. Instead, we should ask how the distribution of income and wealth has changed across generations. Fortunately, the SCF allows us to do just that.

The figure above divides each generation in ten equal-sized groups, ranked by their average wealth. In each generation, the bottom 10 percent have negative net worth: their debts are larger than their assets. In each generation, most of the wealth is held by the wealthiest households, especially those in the top 10 percent of the distribution. Those in the middle of the distribution have rather modest levels of wealth: median household wealth — referring to the middle point in the distribution — was 58k among Baby Boomers, 73k among Gen-Xers, and 100k among Millennials.

The graph below shows how the share of wealth held by the top 10 percent — a classic measure of wealth inequality — increased from 61 percent among Baby Boomers to 69 percent among Millennials. In contrast, the poorest 50 percent of Millennials held less than 2 percent of total ‘generational’ wealth. 

In sum, although average Millennial household wealth now exceeds the average wealth of previous generations, wealth has become even more unequally distributed within generations. Addressing extreme wealth inequality requires urgent policy intervention.

Policies to address inequality can be divided into those that ‘lift the bottom’, such as a higher minimum wage and increased employment security, and those that ‘level the top’, such as wealth and inheritance taxes. Access to stable housing and universal health insurance would also make it easier for those who are currently being left behind to accumulate wealth in the first place.

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