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Economics

Young Americans Are Giving Up on Getting Rich

Despite debt, stagnant wages, and sluggish economic growth, young people may yet find a path to prosperity.
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Are Millennials Financially Screwed?

Young Americans’ incomes are depressed, their retirement nest eggs are microscopic, and their rate of employment is weak. The trend lines aren’t promising, either, which likely explains why there’s no shortage of pessimism out there. In a Bloomberg poll of Americans age 18 to 35—the millennial generation—47 percent said they do not expect their cohort to live better than their parents. For one thing, it’s hard to imagine outdoing your parents if you’re still sleeping under their roof. According to U.S. Census Bureau data, 15 percent of people age 25 to 34 were living with their parents last year, up from 10 percent 30 years earlier. High home prices and strict mortgage lending standards are prime reasons for many millennials’ failure to launch. “They are priced out of the kind of housing that they grew up in,” says Richard Portes, an economist at London Business School.

Living at home, or living away from home but depending on help from Mom and Dad, keeps many young people from learning how to manage their finances, says Vicki Bogan, an associate professor at Cornell University’s Dyson School of Applied Economics and Management. “You don’t have any ownership, any force to push you to become financially literate,” she says.