ó When Julius Givens moved to Chicago after graduating
from college in 2013, he spent six months delivering
sandwiches by bicycle while living with two other
roommates in a studio apartment.
had no money" and more than $20,000 in student
loans after earning a bachelorís degree from the
University of Missouri, said Givens, who aspired to be a
firefighter at the time. "Itís tight living with
three people in a studio, but you figure out how to
was a way of life for Givens, and it still is for some
in his generation. Through a fluke in the timing of
their births, 75 million young adults in the millennial
generation entered adulthood as the economy was in or
coming out of one of the worst recessions in U.S.
history. And thatís left an indelible financial mark
on todayís 25- to 34-year olds. Most have found jobs
since the harsh days of unemployment, but their incomes
are 20 percent lower than what baby boomers earned at
the same age, according to a new study by Young
Invincibles, an advocacy group for millennials. They
also have half of the net wealth the baby boomer
generation had accrued by roughly the same age.
fall short in other ways as well. Numerous studies point
out that millennials have fewer cars and homes, less
savings and other assets, and a lot more student loans
than their parents had when they were young.
doesnít begrudge the situation. He says heís doing
better than his mother did at his age, since she worked
and raised six children on her own in St. Louis. He
feels fortunate to have a professional job in the
medical products industry and backing for a business heís
starting. He now lives comfortably in a two-bedroom
apartment with a roommate in Chicagoís Wicker Park
not hurting for anything," Givens said. "I donít
need a car or a house."
many millennials will struggle to achieve the financial
wherewithal their parents had.
study by the New York Federal Reserve in 2015 showed
that a recession early in a career can drag down
earnings at the time and then continue to stunt paycheck
growth as people move on to other jobs through a
lifetime of work.
research by the St. Louis Federal Reserve attributed the
tremendous increase in 25-year-olds living with parents
to the fact that 40 percent of graduates around the time
of the recession ended up being underemployed. In other
words, they started jobs that required fewer skills and
provided lower pay than would be expected based on the
level of their education. During 2012 to 2013, almost
half of millennials were living at home, compared with
only a quarter of the same age adults in 1999.
earned early in oneís career often set the stage for
lifetime earnings," said Tom Allison, deputy
director of policy and research for Young Invincibles.
"When you start from a lower rung, itís harder to
negotiate a higher salary."
U.S. government data from the Survey of Consumer
Finances, Young Invincibles researchers found that young
adult workers earned $40,581 in 2013, compared with the
average $50,910, adjusted for inflation, that young
adults earned in 1989.
canít earn 20 percent less income and have the same
standard of living as the baby boomers," said
Downers Grove financial planner Adam Glassberg, 30.
more you save early in life, the more flexibility you
have later," Glassberg said. "The impact of
lower income and lower net worth will be millennialsí
redefining retirement ó working longer; maybe into
their 70s; not 65."
millennials are delaying home purchases because they donít
have down payments, but by putting off home purchases to
their late 30s, they will likely find themselves with
the burden of house payments in their retirement years,
Glassberg said. In addition, he notes, this generation
ó with mortgage loans first taken late in their 30s
ó wonít have the luxury of borrowing from the equity
in homes to send children to college.
because they were unemployed or underemployed after the
recession, many millennials missed the chance to buy
homes when prices were cheap. Consequently, they didnít
get the advantage of building wealth effortlessly
through sharply rising values during the housing
recovery, the St. Louis Federal Reserve found.
parents made homes possible for some millennials. A
Harris poll after the recession, sponsored by the
National Endowment for Financial Education, found that
29 percent of parents were helping their children pay
for mortgages or rent.
the burdens left on millennials by college student
loans, the Young Invinciblesí study made it clear that
obtaining a college degree is more necessary for
millennials than it was for baby boomers.
a young adult needs a college degree in order to reach
earnings that are equivalent to what an individual could
earn without any college degree in 1989, federal data
Cummings, 22, who grew up in the Englewood area of
Chicago, has watched friends with no degree lose jobs
repeatedly as businesses closed or scaled back during
search of financial security, Cummings went to college
and earned a bachelorís degree in sociology, but she
hit a brick wall with her job hunt.
didnít get a job, and I was really scared," she
$40,000 in college loans and a 2-year-old daughter,
Cummings didnít dare take a chance on a continued
search for a job that might fail to support her and her
child. So she decided to work on a doctorate and become
a college professor. The program she chose in African
studies at the University of Illinois at
Urbana-Champaign is covering her tuition and rent, and
she can delay paying her student loans. Sheís living
in an apartment covered by her fellowship, and working
17 hours a week as a receptionist so she can pay for her
daughterís day care.
hopes there will be a job at the end of her graduate
school studies. "I know people who went to school
and canít find a job," she said. "Itís
to college and finishing without any debt, however,
doesnít put millennials on par with their parentsí
generation. Recent college graduates without student
loans are trailing the 25- to 34-year-olds of 1989 who
also had graduated from college without debt. The median
net worth of this group in 1989 was $125,572 compared
with just $75,000 for millennials with degrees,
according to the Young Invincibles report.
reason for the difference may not be entirely income.
Millennials also tend to be making lifestyle choices
that are different from their parentsí generation.
Minaglia, who is now 26, lived with his parents in the
suburbs for 2 1/2 years after graduating with a business
degree from DePaul University. His goal was to save
enough money to buy a home.
once heíd accumulated enough for a small down payment,
he decided he "wanted to be carefree." He left
his parentsí home in the suburbs at age 25 and moved
to a one-bedroom apartment in the cityís ritzy Gold
Coast neighborhood. Now he has the city life he craved
while commuting to work, and no home or car payment will
limit his choices if he decides to move for a job or a
new neighborhood, he said.
Givens, 26, also isnít interested in the burden of
owning a home or car. Buying a home seems antiquated for
young adults now, he said. "This is not like the
past, when you got married in your 20s, bought a house
and worked at the same place for 30 years."
STORY CAN END HERE)
I want a family? Sure I do," he added. "But a
lot want to date around and live their life. I donít
see the rush."
past generations, marrying and having children has been
a driver behind buying homes and other household assets.
But the nationís marriage rate has been declining,
especially among the youngest adults, according to
census data and the Pew Research Center. In 1960, 82
percent of 25- to 34-year-olds were married. But in
2010, only 44 percent of 25- to 34-year-olds were
group with the highest proportion of married people ó
62 percent ó is now those aged 35 to 44, according to
Pew. But even in that middle-aged group, marriage is
down compared with past decades. It had been 86 percent
married in 1960.
millennials generally are behind their parentsí
generation in building up wealth, the one area where
they have more than young baby boomers is retirement
savings. But Allison said he thinks thatís simply a
result of changes in the workplace. Baby boomers often
had pensions from employers, rather than the 401(k)
savings plans that have taken their place in the
workforce. Now employers often remove money
automatically from paychecks and deposit them in 401(k)
accounts for each employee, forcing individuals to get
an earlier start on retirement saving.
people save for retirement on their own if they donít
have 401(k) plans at work, according to the Employee
Benefits Research Institute, which has raised concerns
about these young people eventually arriving at
retirement with deficient savings.
is among those with little saved. "I donít need
to save now. Iím not someone in their 50s, investing
so I can go on vacations all over the world."