Millennials may be making less than previous generations but they’re just not about the money
Think you’re making more money than your parents when they were your age? Think again! A new study by independent British think tank Resolution Foundation revealed that millennials today actually have lower incomes than their Gen X predecessors had at the same age.
According to the report, the income progress younger generations have experienced is smaller than that enjoyed by previous generations, a slowdown that has been reported across 24 advanced economies when it comes to the pace of cohort-on-cohort income gains, due for the most part to the economic downturns following the 2007-2008 financial crisis.
And while the decline occurred all ages due to economic slowdowns across these economies, progress has reduced further for younger generations. “Millennials who had reached their early 30s by the early 2010s had incomes 4 percent lower than [those] enjoyed by generation
X when they were the same age, compared to 30 percent growth for generation X on
the baby boomers,” the report revealed.
But it doesn’t stop here. “There is a consensus across high-income countries that generational living standards progress has gone into reverse,” one of the headlines read. For Instance, when asked whether they feel today's youth will have a better or life than their parents, 71 percent of French respondents and 60 percent of Belgian respondents and half of U.K. respondents believed it would be worse.
However, such a mindset does not seem to translate to low/middle-income countries. “This pessimism is reported in many other high-income countries, but in many low to middle-income countries the optimists significantly outnumber the pessimists,” the report explains. “a majority of people in fast-developing countries like China, Peru and India believe that younger generations will have a better life than their parents did.”
To put things into perspective, millennials may be struggling more than its predecessors in terms of finances, but this does not necessarily affect their self-esteem. In fact, Gen Y conversely still views itself as more successful, responsible and forward-looking than older generations according to a recent survey.
This being said, it is no surprise that millennials tend to play it safe with everyday investments after witnessing the deteriorating impact of past economic crises on their older counterparts. “This anticipation may be driving millennials to take a conservative approach to their finances as they view themselves as more financially conservative than their parents (46 percent) and even their grandparents (35 percent),” the survey report explains.