For years, the personal habits of millennials have been pored over as if the generation now between 21 and 35 years old had descended from outer space. Millennials have been accused of "killing" everything from malls to threesomes to golf to home ownership. Along the way, various theories about young adults have been floated—maybe they're spending too much on avocado toast to buy homes, maybe they aren't going to casinos because they can play games on their phones. But a new study from the Federal Reserve suggests a simple reason behind a lot of millennial consumption habits: We don't have as much money as previous generations.
The November study, which has been covered by NPR, among other outlets, notes that the "economic wellbeing of the millennial generation, which entered its working-age years around the time of the 2007-09 recession, has received considerable attention from economists and the popular press," but finds that "millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations." It also finds that "Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth." Adds NPR, in summarizing the Fed's work:
The study also noted newer financial obstacles for millennials. Broad economic trends depict a rise in health care expenditures, as well as a rise in college tuition that has outpaced general inflation that previous generations avoided in their young adulthood.
This isn't exactly news to millennials. As Michael Hobbes reported in his massive feature on millennials for HuffPost earlier this year, the world our generation has inherited comes with more hazards and fewer perks than the one our parents lived in. "Salaries have stagnated and entire sectors have cratered. At the same time, the cost of every prerequisite of a secure existence—education, housing, and health care—has inflated into the stratosphere," Hobbes wrote. "And the opportunities leading to a middle-class life—the ones that boomers lucked into—are being lifted out of our reach."
The Fed study isn't concerned with the causes of this generational inequality, but other sources have already mapped out the reasons for millennials' relative poverty, including a decline in unions and an uptick in policies favoring the wealthy. Additionally, many millennials graduated college during the Great Recession, when employment opportunities were scarce and the job market was flooded with laid-off workers who had more experience, an environment that likely contributed to a nasty generation gap: In 2017, it was found that millennials made 20 percent less than boomers did at the same age.
"It remains to be seen whether having reached adulthood during those unfavorable years will have permanent effects on their tastes and preferences," write the authors of the Fed study. But it seems clear that not having enough money, worrying about not having enough money, and comparing our lives to those of our parents has taken a particular kind of toll on millennials. Worries about financial instability may contribute to young people deciding not to get married or have children. As for homeownership, avocado toast explanations are self-evidently ridiculous: It appears that factors like student loans and high rent make it difficult for young people to save for a down payment.
As the Fed study found, these trends are likely driven by financial factors, not other cultural differences between generations. But millennials' lack of funds could wind up making us culturally distinct from our parents and children over time—maybe we'll be more responsible and frugal, less inclined toward hedonism and waste. Less optimistically, we could remain fearful of the future, worried about another crash, unable to properly put down roots because we never feel totally comfortable with our financial lives. Hopefully, either way we won't have to hear any more about how kooky we are.
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This article originally appeared on VICE US.