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Millennials have been dubbed “the lost generation” because of how far behind they are on building wealth compared to older generations at this stage of their lives. The Federal Reserve Bank of St. Louis reported that millennials (especially those born in the 1980s) would accumulate less wealth during their lives overall.
These predictions come at the heels of the collective experience of unfavorable macroeconomic trends and economic instability that the generation has faced. It’s safe to say that millennials, who fall between the ages of 26 and 40, have had far from smooth sailing when it comes to building wealth.
A sizeable chunk of millennials graduated college at the start of the 2008 financial crisis and bore the brunt of an economic meltdown right when they were entering the job market. The last decade has seen a widening wealth gap, with the younger generations clustering at the bottom. Many things can be blamed for the rise of inequality: Student loan debt burdens, increased cost of living, high housing costs and stagnant wages. Now largely indebted and delayed in building their careers, being a millennial is almost synonymous with having money anxiety.
The economic fallout of the Covid-19 pandemic has again presented many millennials with more financial difficulties and introduced another type of crisis — a growing collective discontent leading to what many are calling the ‘Great Resignation.’ These events threaten to push this generation permanently off course when it comes to building wealth.
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But there’s still time to catch up. Millennials had gradually started to recover from the decade-long struggle following the 2008 economic crisis. As early as 2018, research by the Pew Research Center showed that working adults in this generation earned more than young adult households did in the past 50 years. A reason for this growth in household earnings was that millennial women were working more, and being paid more, than women in previous years.
Though millennials have faced another setback, largely due to the economic fallout of the Covid-19 pandemic, if previous recoveries are any indication, they can catch up again.
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