Or more accurately, generations, plural, though this bleak Zero Hedge article only mentions Millennials.
“There was a great deal of interest [in millennials], but there wasn’t as much due diligence around that group,” she said. “We’ve generalized them as a certain type of person, [but] the reality is the rubber is meeting the road. Companies are starting to understand, ‘Wow, we’re not getting the ROI we thought we might’.”
It’s a mystery.
But now that millennials have been part of the labor market for over a decade, the sad reality of their buying power has hit potential sellers like a ton of bricks. Spending, per se, isn’t the issue: Millennials spend about $600 billion a year and are on track to spend $1.4 trillion by 2020, according to Accenture data. The problem is that they are saddled with large and unavoidable expenses that reduce their overall purchasing power. These expenses primarily include housing and student debt.
The home ownership rate for Americans aged 25-34 was 37% — 8% below the rates for Gen Xers and baby boomers, according to the Urban Institute, in 2015. Ron Cohen, VP of product strategy for consumer analysis firm Claritas said: “Of the 13.5% of millennials that are heads of households, only around 50% of them own their own homes. The other half are renters—many likely with roommates to share rent and other expenses.”
Astute readers will note that the Urban Institute defined Americans aged 25-34 years old in 2015 as Millennials. However, that range includes on the first year of the Millennial generation. People aged 26-34 as of 2015 are really members of Generation Y.
I concur with Zero Hedge that Millennials are financially screwed. However, if you buck the nonsensical trend of lumping the Millennial Generation in with Generation Y, the latter are shown to be much worse off than Millennials in regard to financial metrics such as home ownership.
Ys are in many ways another Silent Generation, in that they’re suffering silently while the media myopically focus on Baby Boomers and Millennials.
We’re coming up on the third generation to enter the workforce saddled with unserviceable debt while facing stagnant wages and grim asset accumulation prospects. This type of situation is what’s known to historians as a powder keg.
The powers that be would be well-advised to stop playing with matches.