Millennials Are Now Considered The "Lost Generation"

The Federal Reserve Bank of St. Louis published a new report examining the relationship between a person’s birth year, and measures of his or her family’s economic status, including income and wealth. Fed economists determined that substantial wealth declines were visible across the age spectrum around the Great Financial Crisis (GFC) but found that young families suffered the most.

The report suggested that millennials (born between 1981 and 1996) not be just broke, they are at most significant risk of becoming a “lost generation” regarding wealth accumulation. Coming of age post-GFC has been difficult. Many millennials are stuck in the “gig economy” with stagnating wages. On top of that, this avocado toast generation is fighting against a rapid surge in living costs coupled with mounting debt on their books via auto loans, credit cards, short-term loans, and student debt.

The net worth of a typical millennial household born in the 1980s is about 34 percent below what was expected, the report stated.

A Lost Generation?…Fed economists determined that millennial households lost even more financial ground between 2010 and 2016, falling farther down the economic hellhole and behind the typical wealth life cycle.

” This represents a missed opportunity because asset appreciation is unlikely to be as rapid in the near future as it was during the recent period. Two reasons for optimism are that the 1980s cohort has many years to get back on track and it is the most educated—hence, also potentially the highest-earning— group ever,” the report said.

The Wilshire 5000 Total Market Full Cap Index, a market-capitalization-weighted index of the market value of all stocks actively traded in the United States, outlines the rapid repricing of the market post-GFC. The index advanced +450 percent from 2010 to 2018 — leaving many millennials behind.

In total, just 54 percent of Americans are invested in the market, either through individual stocks, mutual funds, pensions or retirement plans like a 401(k). That is down nearly 11 percent post-GFC.

While Wall Street and Washington push propaganda pieces to attract millennials into the stock market casino, it is the belief that this generation is too broke to even participate in these financial games.

HERE ARE SOME OF THE CHARTS THAT RELATE TO MILLENNIALS, FROM THE FED REPORT:

Figure 1: Median Family Net Worth and Income

Figure 2: Change in Median Net Worth, Relative to 2007

Figure 3: Change in Median Income, Relative to 2007

Figure 8: Change in Estimated Age-Specific Wealth Levels since 1989

The report concludes: “It is far too soon to know whether families headed by someone born in the 1980s will become members of a lost generation for wealth accumulation. To be sure, there are grounds for optimism. Yet there are reasons to be very concerned about the financial outlook for many young Americans.”

Fragile millennials could soon be staring at the next recession with the economic expansion that started in mid-2009 and already the second-longest in modern economics most likely will end around 2020, as the Federal Reserve continues tightening financial conditions through interest rate increases and shrinking of its balance sheet.

Earlier this month, 59 percent of forecasters surveyed by The Wall Street Journal said to expect a recession by 2020. This is not what millennials want to hear.

“The current economic expansion is getting long in the tooth by historical standards, and more late-cycle signs are emerging,” said Scott Anderson, chief economist at Bank of the West, who was among those forecasting a 2020 recession.

When the next great recession/depression strikes, it could deliver the final deathblow to put this “lost generation” out of its financial misery. 

Comments

Son of Captain Nemo djsmps Fri, 05/25/2018 - 18:21 Permalink

Might as well GO OUT WITH A "BANG"?... Or is it a "BOOM"?!!! And join the United States Armed Forces?... Kinda fun to see that picture of all of them being "licked" by flames!!!

https://msutoday.msu.edu/news/2017/msu-scholars-find-21-trillion-in-una…

After all... It's where ALL the money has gone and will continue to go to our collective DEATHS anyway!!!

 

In reply to by djsmps

An Shrubbery johngaltfla Fri, 05/25/2018 - 19:27 Permalink

I know a millennial that seems to have it all figured out. He has learned to game the system. He has his own business, several, actually, which always seems to just break even. Never making any money, and never losing any money, so he pays no taxes. He lives the life of riley, working when he wants, doing whatever he wants, taking trips when he wants, paying child support when he feels like it...

Meanwhile I'm working 56 hours a week as a debt slave, for a few more yrs anyway...

Maybe it will catch up to him eventually, I don't know, and I don't wanna know...

In reply to by johngaltfla

Retired Guy Herd Redirecti… Fri, 05/25/2018 - 22:19 Permalink

"it is the most educated—hence, also potentially the highest-earning— group ever, "

Maybe college education isn't that great when everybody does it. I made my money doing lots of blue collar things to run my business. I know a high school graduate who ended up richer than his college grad. sister. When you don't know how things work you end up paying everybody to fix your stuff. You have to pay top dollar for new. With the current price of cars that is a big deal. And living in a high rent city to work a professional job makes saving very difficult. Really, it isn't how much you earn, it is how much you can save and invest. 

In reply to by Herd Redirecti…

Son of Loki Retired Guy Fri, 05/25/2018 - 23:13 Permalink

I find my peers to be lazy for the most part. I was taught by Father Loki to expect 12-16 hour days when I began working so it's no big deal to me. However, many of my peers I graduated with are outraged and some even quit when told by their manager or boss they have to work past 5 pm.

I look around and most of the wealthy, successful people I see work long hours whether they are engineers, doctors, electricians or plumbers.

The lazy ones complain.

In reply to by Retired Guy

GreatUncle An Shrubbery Fri, 05/25/2018 - 20:54 Permalink

Hey that guy is my nephew ... :-) Figure this ... if the system goes into stagnation (and it is) or even worse maybe a recession / depression why the fuck you working so hard? Do you have a FED CTRL-P abilitiy if not then no matter how hard you work in the system you are going nowhere.

No CTRL-P then best to just say fuck it, not starving but let other cunts do all the work.

THERE IS NO INCENTIVE TO WORK IF THE SYSTEM STEALS IT ALL.

That stolen also includes all 0% ROI on savings since 2008.

In reply to by An Shrubbery

Son of Captain Nemo El Oregonian Fri, 05/25/2018 - 19:07 Permalink

Well I guess it really was an American that coined the phrase that "children should be seen and not heard" after all?...

No wonder our kids are so fucked up?...  Mummy and Daddy are too busy earning the bread to keep them hidden in that basement along with the meds and the distractions that tell them who to hate and go to war with when their government tells them to...And not enough time educating them to develop critical thinking skills they will need to form a necessary insurrection when it's an "emergency"!

Oh well... Too late for that I guess?...

You are just pointing out more reasons why the North American landscape will be deserving of a battery of Russian and Chinese hypersonic nukes when the time comes!

In reply to by El Oregonian

curly Stan522 Fri, 05/25/2018 - 20:31 Permalink

don't know how to quantify "work hard".

all three of mine do.  all three self-sufficient or on the way.  one getting a wake-up call about personal finance after getting sucked in to the NGO scam (hint:  who funds the NGOs for personal tax breaks)

at least two of them are confused and demoralized by the media BS with the message that "millenials suck", and they're starting to get unconfused and PO'ed as they learn more.

starting with deeply confused by the educrat pablum propaganda of "you need to make the world a better place", instead of making yourself financially sound and then doing what you can to improve the world.  The ones that can't make that transition will continue to be teat-sucking Democrats, and the ones who do make the transition will be ruthless fiscal conservatives, like the '30s depression generation w/o the FDR socialism.

just one anecdotal view, I know.

 

 

In reply to by Stan522

Robocop5626 Stan522 Fri, 05/25/2018 - 22:16 Permalink

As a parent of two, one of each type, I can state unequivocally they are a different breed. One lives pillar to post in a shitbox house while spending thousands yearly on cruises, spectacles, the Disney parks, etc. The other lives in an apartment. After a decade plus long string of failed jobs, it is apparent work is a torture rather than a livelihood. While my children lived at home, i always worked 2 jobs to make ends meet. The need to work an off day causes a borderline hysteria replete with text messages that would do Marx proud. Apparently being compensated based on what you know or what you can do, is some type of extreme imposition on the workforce solely to enrich some at the expense of others.

In reply to by Stan522

Robocop5626 Stan522 Fri, 05/25/2018 - 22:16 Permalink

As a parent of two, one of each type, I can state unequivocally they are a different breed. One lives pillar to post in a shitbox house while spending thousands yearly on cruises, spectacles, the Disney parks, etc. The other lives in an apartment. After a decade plus long string of failed jobs, it is apparent work is a torture rather than a livelihood. While my children lived at home, i always worked 2 jobs to make ends meet. The need to work an off day causes a borderline hysteria replete with text messages that would do Marx proud. Apparently being compensated based on what you know or what you can do, is some type of extreme imposition on the workforce solely to enrich some at the expense of others.

In reply to by Stan522

NoDebt Son of Captain Nemo Fri, 05/25/2018 - 18:30 Permalink

Speaking as either the world's youngest Baby Boomer or the world's oldest Gen X'er (depending on where you drop the bar between the two) I have the misfortune of landing right smack in the demographic middle of nowhere.  There isn't a fucking person on the planet who gives a flying fuck about people my age.

You muddle through.  You find a way.  There are no guarantees in life, least of all those provided by lying politicians in government.  And stop listening to your Marxist college professors.  Nothing they will teach you will EVER help you.

Sorry you aren't going to do as well as your parents did.  Despite the fact that I'm a medium-successful guy, I won't do as well as my parents did, either.  So we have that in common.  This is nothing all that new, so I really have only modest sympathy for the plight of those that this phenomenon affects.

Get off your ass and TRY SOMETHING.  It almost doesn't matter what.  If you try on a regular basis you will find a way to be successful in some aspect of your life that you will be proud of.

 

In reply to by Son of Captain Nemo

takeaction djsmps Fri, 05/25/2018 - 18:38 Permalink

Most don't get it....

There is a reason for that.....and that is the SCHOOLS don't teach Entrepreneurial ANYTHING....

They don't teach kids the REAL WORLD.

I can teach somebody in a matter of hours how it works.....then it is up to them to either do it...or do nothing.  

Lack of motivation is huge....

 

In reply to by djsmps

shovelhead Parrotile Fri, 05/25/2018 - 19:59 Permalink

It ain't supposed to be OK. It's hard fuckin work. My route looked like West Virginia with all the hills.

With a one speed bike it built some damn sturdy legs. That helped humping a mini toboggan in a New England winter. White out blizzard? who cares? They want their paper and they ain't paying unless it's in their door. Hurricane with rain? Same thing. I bought the papers whether I sold them or not. Independent business. I had to run off route poachers, thieves and deal with assorted scammers who didn't want to pay for the papers. Only a wily boy made it through. A well trained loyal dog was a necessity and I had one of the best.

Some pretty good lessons on what's what and who's what were learned there.

In reply to by Parrotile

sparky139 shovelhead Fri, 05/25/2018 - 21:11 Permalink

Agreed!
I inherited my brother's paper route when I was 11 (he developed leukemia). Hilly western Pennsylvania, daily paper--Sunday edition was a bear! (I was a petite girl; the route was around 60-70 papers). The only saving grace was that I had the afternoon edition rather than the morning... Learned a lot about human nature and perseverance.
It was a great experience.

In reply to by shovelhead

itstippy shovelhead Fri, 05/25/2018 - 21:15 Permalink

My Dad grew up in the Great Depression and had a paper route.  Very early every morning Pa would swipe one of Grandpa's Chesterfields and a couple of Grandma's stick matches from the kitchen.  The newspaper truck would stop at his house, Pa would load his bundles of newspapers into his coaster wagon, and head off to deliver.  On his route was a neighborhood baseball field with an outhouse.  Pa would take a break in the outhouse, enjoy his illicit cigarette, and continue on.

One brisk Fall day some workers did some painting, cleaned their brushes in solvent, and dumped the waste down the hole in the outhouse.  Overnight the privy pit filled with volatile solvent fumes.  That morning when Pa lit his stolen cigarette and dropped the match down the hole between his legs he touched of an explosion that lifted the outhouse off its timbers and blew Pa out the door.  People rushed out at the sound of the boom and found Pa lying next to the overturned outhouse, pants at his ankles, completely dazed and half deaf.  They trundled the boy home to recover.  His biggest concern was for his newspapers, which his little sister finished delivering, having done the route with her big brother a few times in good weather.

In reply to by shovelhead

one ping only takeaction Fri, 05/25/2018 - 19:42 Permalink

You are quite correct, our schools do not teach one iota of entrepreneurship. When I was in middle-school in the late 70s, our school district had a program sponsored by a tool manufacturer and a few other heavy industries. The program was akin to an unpaid apprenticeship and taught great skills ranging from conceptualizing a product (a new style of claw hammer, perhaps,) creating an efficient tool-and-die process (in the case of the tool manufacturer,) to running the ROI numbers, to developing a marketing strategy and eventually bringing it to market. [All conceptually, unless the idea was really good.]

That was back in the day when girls took Home Economics and guys took Wood Shop or Auto Shop for their high school electives. Yeah, we had plenty of pickup trucks in our high school parking lot that had gun racks with guns in place. I count my lucky stars that I grew up in the same cohort as NoDebt and not any later.

In reply to by takeaction

fattail one ping only Sat, 05/26/2018 - 08:07 Permalink

Our high school kids run an in house coffee bar.  Every fall we have an endless line of children selling items door to door to raise money for school or their organizations. 

What I have noticed about the millinenials is they value their time and experiences more than Xrs and boomers.  And they are demanding.  Maybe the people complaining about them are not used to their employees not putting up with their bullshit.

In reply to by one ping only