By Dora Mekouar
The 2020s might be the decade faltering millennials finally roar to financial health and lifestyle after a tough start brought on by the Great Recession, which lasted from 2007 until 2009.
Coming of age during the worst economic downturn in the United States since the 1930s meant that many of these young people, who are now in their mid-20s to late-30s, experienced a delayed entrance into the job market or accepted lower-paying jobs for which they were overqualified.
Many millennials were hard hit due to a variety of factors, including high unemployment, student loan debt, and an increased cost of living, particularly if they graduated from high school or college during the downturn.
“Since then, we’ve really had a lot of wage stagnation, particularly given that so many millennials started behind where they thought they would be,” says Jason Dorsey, president and lead millennial researcher at the Center for Generational Kinetics. “And it’s taken them longer to recover — if they have recovered.”
Experts also say U.S. millennials are the first generation to feel the full impact of decades of rising inequality in America.
A recent study found millennials are significantly financially worse off than previous generations were at the same age. Since 1996, the net worth of people under 35 has dropped by more than one-third, or 34 percent.
But things could be looking up for these younger Americans now that the average U.S. millennial is over the age of 30 and poised to enter the wealth-accumulation stage of their life.
“They’ve had a lot of time to learn about what it takes to succeed? What are the kinds of decisions that lead to the outcome that you want?” Dorsey says. “And for many millennials, boomers [people aged 55 to 75] are finally going to transition increasingly out of the workforce, which is going to create opportunity for them to actually move up into more management-style roles.”
Millennials are at the age when Americans traditionally buy homes, start saving for the future, and invest for their retirement. It also will help that many have paid down their student debt now that they’ve been out of college for a number of years.
“And at the same time, many of them will become potentially two-income households and that’s also really helpful for many of them,” Dorsey says. “It’s sort of a perfect storm. It just happens to align with the 2020s. It’s not that the 2020s are this famous decade, but more so that millennials are hitting the times when they should start really saving and investing, and earning higher incomes relative to their spending.”
And if millennials blame previous generations for their current financial straits, it might cheer them up to know this is also the time many of them can expect to start inheriting wealth from their more well-off baby boomer parents or other relatives. (VOA)