The wealth gap between generations in the US has nearly doubled in the past 20 years

The wealth gap between generations in the US has nearly doubled in the past 20 years — and the Great Recession, an unaffordable housing market, and astronomic student-loan debt are to blame says Business Insider. link

The average American millennial household today (ages 20 to 35 in 2016) has an average net worth of $100,800, while the average American baby boomer household today (ages 52 to 70 in 2016) has a net worth of $1.2 million

That makes sense my older friends would argue; Boomers have had a lot more time to accumulate assets and savings. And this is very true but it neglects to consider that not only is there a gap (which is expected) but that the gap has widened significantly over the last 20 years.

In 1998, the average household aged 20 to 35 had a net worth of $103,400, while households aged 52 to 70 had a net worth of $747,600, MagnifyMoney found - roughly seven times more than the younger households.

That means the wealth gap between older households and younger households has nearly doubled in the past 20 years, climbing from seven to twelve times the net worth.

In that time frame, the average net worth for households ages 20 to 35 has declined by $2,600, while households ages 52 to 70 have seen a $452,400 increase in net worth.

And this is only a 20 year study; I wonder what the gap would be if they looked over the full generational 50 years (70-20); probably a lot worse.

Ofcourse the usual suspects are to blame; Sky rocketing cost of higher education:

Much of that debt takes shape in student loans, thanks to college tuition that has more than doubled since the 1980s - the national student-loan debt total is more than $1.5 trillion, and the average student-loan debt per graduating student in 2018 who took out loans is $29,800.

Housings affordability:

Meanwhile, as Mitra reported, rising housing costs also play a role. First-time homebuyers today will pay 39% more than first-time homebuyers did nearly 40 years ago, 

But there are also other more insidious reasons for the widening gap.

There's also the aftermath of the Great Recession, which created a financial domino effect for millennials that put them on a slow path to wealth accumulation. It hit millennials born in the 1980s especially hard: Their wealth levels are 34% below where they would most likely have been if the financial crisis hadn't occurred, according to a report by the St. Louis Fed.

The recession also made millennials wary about investing, Mandi Woodruff, executive editor at MagnifyMoney told Mitra.

This new generation has lost some of the most productive working years of their lives and there not coming back. On top of that they are gun shy to invest the money they do have.

Oh and yes Millenials have more cell phones than their older counterparts and are probably on average lazier. Those are important contributing factors.

I feel bad for the millenials. They always get a bum rap. People point out things like wealth disparity and end it all by saying it's the millenials fault.

No it's not.

This is simply the way the times are changing and the millenials are catching the brunt of it. It's bad enough we dont have the jobs available to them to make more money to afford college because greed shipped them overseas, it has to be THEIR fault as well.

People just need to tone down their spending for college, quit thinking you HAVE to spend $70,000 for a degree that may or may not be relevant by the time you get it, start a 401k when you're 20 and remember that it doesn't have to be job sponsored, and if enough people quit buying houses temporarily, it dries up the market decreasing the costs. That's just the way it works.

Times are tough and the wealth disparity grows because of the greed driven sector of corporate America. Not the millenials. Please quit blaming them.

Obama's crappy economy definitely set them back. But at least things are now looking good on that front.

They also didn't help themselves by getting useless liberal arts degrees majoring in Beyonce studies.

a reply to: DanDanDat
Interesting stuff Dan. I think we also need to consider that the boomers were the first generation to be raised and then to enter the work force in the aftermath of World War II. The world they inherited was a world where the entire industrial stength of the western world was situated on US soil, Europe and Japan being bombed the hell out of.

That America offered that generation of boomers careers of their choice in many cases. Unions had arisen do to the strength of the labor market and good wages were to be had.

Boomers had excess money to invest which I don't know if later generations had. Those investments in many cases continue to return to boomers money to live on.

There is a lot to the old adage, that money comes to money. Oh, as well there all the very very rich that are now boomers and it is very likely that the figures you posted reflect not only the wealth gap of age but the over all wealth gap between rich and poor.

a reply to: DanDanDat

I think there are a lot of different reasons for it, and some of it is actually good.

A lot of younger generation are less materialistic in general. They don't have collections, they don't care about name brands as much, or shopping at the mall.

They seem much more interested in experiences, in food, in culture.

One thing that's different is that people are getting married much older than before or not at all.
There is also the instant microwave burrito mentality of younger generations.
They buy everything on credit so as to have it right now instead of saving like the boomers did.

$1000 I phones and $200 air buds...

None of that helps the situation.

a reply to: DeepImpactX

Me too Deep. Boomers like myself took the easy access to work and the plethora of materialistic oppertunities as if they were a birthright and accumulated '' stuff'' all over the place. Boomers were also fell prey to the credit card heaven, buying over our heads today and paying for it in the future. This has snowballed so that now almost no one can pay for today, today and everyone buys today and pays for it tomorrow.

This reflects in the national debt. It reflects in insurance programs and medicare, social security and all the rest of the schemes that rely on being paid for in the future. Problem there is that boomers are not dying in their 40s and 50s anymore, we are living into our 70s and 80s and the future is here NOW and we must live alongside those people that we placed those debts upon. We gave to younger generations an economy that thrives only on feeding on it's children.

a reply to: JAGStorm
You make a good point here Jag. My children are not materialistic to a crippling degree. In some ways I think that not being materialistic is an indication of strong character, but it could also be that they just have not had the opportunities to be materialistic that were available to boomers before them.

a reply to: JAGStorm
I agree a bit. Materialistic people though have a drive and does what it takes to acquire what they desire. Nice big house? Nice fancy car in the driveway? People will work several jobs or learn a trade, study a skill to make that happen, or marry a sugar daddy who has done the hard work already.
Non-materialistic people in my opinion live more free, but to me, have less motivation to work. What’s that old saying? “The more things you own, the more things own you”.

a reply to: JAGStorm

You're right about the food and cultural thing.
Millennials drink the expensive beer and eat the fancy food.
Money that could have been invested for the future.

I do disagree on the name brand opinion though.
Apple products, micro brews, name brand clothes are all big in my area.

a reply to: DanDanDat

How can you make a fair comparison of peoples wealth when one group has been around to amass more for a good 30 years longer? Duh of course they have a higher net wealth.

Edit: Also how does one accurately extrapolate that data as I doubt wealth accumulation is linear.

a reply to: RickyD

The comparison is not that there is a wealth gap, that's to be expected, it's that the wage gap has widened tremendously.

a reply to: Bluntone22

Ok that's fair although I feel like its more of an inflation gap than wage gap really.

a reply to: RickyD

Yes, it's not wages as much as assets.

a reply to: 38181

For me the question of materialistic is is it intrinsic to our human nature or is it something that we are trained to be.
Certainly the rich of old were more materialistic, the kings and all, accumulating and owning but poor people in most cases did not have the opportunity.

I think that the current epidemic of materialistic belief comes from two places. One the abundance of available work for a couple of decades following WWII but more than that the push to buy buy buy and own own own by the advertising industry. Gotta have gotta have. Beat the Jones next door.

With the advent of mass production the ability to outstrip demand for product keep profits for the owners of the production facilities stable. So advertising became more than just presenting your name and product, it became a mass indoctrination into materialist culture so as to utilize the potential of mass production and to increase the profits for the owners of the manufacturing industry.

People were turned into consumers and the economy and culture was flipped from a culture of need to a culture of want.

originally posted by: watchitburn
Obama's crappy economy definitely set them back. But at least things are now looking good on that front.

They also didn't help themselves by getting useless liberal arts degrees majoring in Beyonce studies.

However no matter what happens now; post "Obama's crappy economy" does not make up for the 15 years of stagnation they just went through. Like all investing the money you put in at the start has a much bigger contribution to the end product than moneys that come in later.

Also "useless liberal arts degrees" is any easy lament; an easy way to write off this generation. But is that a logical significant contributing factor to the 7 to 12 time wealth gap described in this artical? That's a hudge difference, hard to write off as a whole generation picking the wrong degree.

originally posted by: TerryMcGuire
a reply to: DanDanDat
Interesting stuff Dan. I think we also need to consider that the boomers were the first generation to be raised and then to enter the work force in the aftermath of World War II. The world they inherited was a world where the entire industrial stength of the western world was situated on US soil, Europe and Japan being bombed the hell out of.

That America offered that generation of boomers careers of their choice in many cases. Unions had arisen do to the strength of the labor market and good wages were to be had.

Boomers had excess money to invest which I don't know if later generations had. Those investments in many cases continue to return to boomers money to live on.

There is a lot to the old adage, that money comes to money. Oh, as well there all the very very rich that are now boomers and it is very likely that the figures you posted reflect not only the wealth gap of age but the over all wealth gap between rich and poor.

That is a good point to contribute to the problem. Makes a lot of sense. The next logical question would be what are we as a society going to do about it?

Simplistic buy this is a message board, to further discussion; maybe its time to cut off social security for boomers. If they had such a great leg up as you described, maybe its time to let the less fortunate next generation keep more of their earnings to make up the difference.

originally posted by: JAGStorm
a reply to: DanDanDat

I think there are a lot of different reasons for it, and some of it is actually good.

A lot of younger generation are less materialistic in general. They don't have collections, they don't care about name brands as much, or shopping at the mall.

They seem much more interested in experiences, in food, in culture.

But those are coping mechanism. Because they can't accumulate wealth like their parents could they have found ways to cope with it by shifting priorities. 100 years from now we may look back on this and think it was a positive change; but that doesn't negate that this generation is living through the turmoil. I wonder what the effects are going to be in the short term. More suicides? More mass shootings? Ext.

a reply to: TerryMcGuire

This reflects in the national debt. It reflects in insurance programs and medicare, social security and all the rest of the schemes that rely on being paid for in the future. Problem there is that boomers are not dying in their 40s and 50s anymore, we are living into our 70s and 80s and the future is here NOW and we must live alongside those people that we placed those debts upon. We gave to younger generations an economy that thrives only on feeding on it's children.

Another thing that isn't talked about much yet because it hasn't hit hard yet is as the boomers live into their 80s they are encountering debilitations that are much more costly to take care of than the heart attack at 60. Hopefully the Boomers are going to use their increased wealth potential to pay for the care themselves; but the millennials will undoubtedly have another burden that their parents didn't have. Both in lost inheritance to medical expenses and/or in having to pick up the slack if their parents didn't put money aside for their end of life needs.

Removed - already answered