OK, boomer

Millennials are widely assumed to be economically worse off than Baby Boomers. Explanations range from the younger generation’s experience of precarious employment, rises in cohabiting and single parenthood, and even their alleged overconsumption of avocado toast. At the same time, Millennial billionaires like Mark Zuckerberg and Sam Bankman-Fried have accrued early fortunes in fields such as tech and finance. So, are Millennials really the first generation to fare worse than their parents?So, are Millennials really the first generation to fare worse than their parents?

A new study published in the American Journal of Sociology by Rob Gruijters, Anette Fasang, and Zachary Van Winkle examines this claim. Using data comparing the work and family trajectories and wealth accumulation of early Millennials (born 1980-1984) and late Baby Boomers (born 1957-1964), their analysis reveals a complex story. The median Millennial does indeed have less wealth than the median Boomer at age 35, but inequality between the top and bottom of the wealth distribution has increased. So, while the poorest Millennials are worse off than the poorest Boomers were at 35, the wealthiest Millennials (hello, Mark Zuckerberg) are better off than the budding Boomer elites were at 35. The divergence stems from the fact that the economic advantages associated with typical middle-class lifestyles (pursuing professional careers, delaying starting a family) have increased since Boomers were coming of age. In contrast, the disadvantages associated with typical working-class trajectories (low-level blue-collar or service sector work, single parenthood) have persisted or worsened.

The study, which adds to our understanding of generational change and rising wealth inequality, includes a number of policy insights. The proposed interventions include measures to limit (and redistribute) wealth accumulation at the top of the economic distribution (e.g., tax reforms), as well as measures to promote wealth accumulation at the bottom (e.g., providing young families with access to stable housing). Encouragingly, the authors’ suggestions don’t involve cutting back on avocado toast.