- The millennial narrative often reads as contradictory.
- A millennial wealth gap and various nuances explain disparate notions of millennials both advancing and struggling.
- This matters because generations shape history. And right now, millennials are driving the economy.
- See more stories on Insider's business page.
If you're fed up with the millennial narrative, I get it.
It reads like a set of contradictions. Millennials can't afford homes, according to one headline, while another states that they're busy snapping up homes during the pandemic. Millennials are finally getting rich, per one article, but a different piece tells of millennials struggling to save money right now.
I know this, perhaps, better than anyone, having written about the financial behaviors and lifestyles of the generation for the past two years. My own articles, at first glance, seem at odds with one another.
Last April, I wrote about how the coronavirus recession was the latest blow to a generation that came limping out of the Great Recession. A few months later, I followed that up with a story about how millennials were socking away as much as $3,000 a month during quarantine. How can both be true? (The answer is the intragenerational wealth gap, which we'll get to in a minute).
Here's the thing: All of these portraits of millennials can coexist, and it's these seeming contradictions that paint the truest picture of millennials - a fragmented generation with sub-cohorts thanks to a wealth divide and many nuances.
The millennial wealth gap
The millennial generation happens to be both rich and poor. It's called a wealth gap, and it's intensified during the pandemic.
"This pandemic is widening economic inequalities within millennials, with some millennials relatively unscathed economically and others just completely financially devastated by unemployment losses, increased childcare costs, lost economic opportunities, and lingering health problems that they or family members are going to experience," Christine Percheski, demographer and associate professor of sociology at Northwestern University, told me back in January.
The intragenerational divide is marked by a cohort that feels left behind financially and professionally - one that's reckoning with an affordability crisis defined by two recessions before the age of 40, soaring living costs, and staggering student debt. But not everyone fits the mold of the economically blighted millennial. Another cohort of the generation feels financially ahead of the game, able to move forward with their career and aspirations.
Generational researcher Jason Dorsey, the president of the Center for Generational Kinetics, has coined these groups as "me-llennials" and "mega-llennials," respectively. These sub-generations explain the seemingly disparate notions of the progressing millennial and struggling millennial; why you might be reading about millennials upgrading their living situation during the pandemic, right after reading how the pandemic hit the generation the hardest financially.
There's also the prospect that the millennials who got a slower start could still fare well financially in the long run. Experts have said that while economic conditions have stalled some millennials, a baby-boomer inheritance, good savings habits, and time to earn and save means they can catch up.
Generations have nuances
As is the case with people, there are a lot of nuances to groups of people. It seems contradictory on the surface, but delving deeper into these nuances creates a more well-rounded story.
Consider these two studies from late 2018: A Fed report found that millennials have much less money than Gen Xers and baby boomers had at their age. A month later, the Pew Research Center published a study that found millennial households are earning more than previous generations did at their age nearly any time in the past 50 years.
Closer inspection shows Pew looked at data for a three-person-household income, while the Fed looked at data for individuals. And while the Fed found that individual incomes were falling for millennials, it did find that family incomes for married couples (household incomes) grew, similar to Pew's analysis.
Millennial individuals are earning less, but households are earning more, a difference explained by the increasing number of young females joining the workforce.
And as millennials age out of being the youngest generation (the oldest turn 40 this year), things change. Nearly three years ago, the St. Louis Fed declared those born in the 1980s at risk of becoming a "lost generation" for wealth accumulation thanks to a 34% deficit. But a follow-up study three years later showed that millennials gained more financial ground than anticipated, narrowing that wealth deficit to 11%.
But despite these leaps, the wealth divide still exists, signaling that millennials are not financially where past generations were at their age. And so emerges a story of millennials as a generation that's simultaneously advancing and lagging, creating a complex picture yet again.
Generations act as a voice of history and society
Now, you may be asking, who even cares? Why can't we just leave millennials alone?
First of all, in the same way that history shapes generations, generations shape history. The attitudes and actions of a demographic cohort says a lot about the evolution of society. Examining all this, as the Pew Research Center explains, helps researchers understand how differing experiences form people's view of the world.
There is no defense for misconstrued narratives about millennials being unable to afford a home because they prefer to spend on avocado toast or how they're a self-centered, lazy generation. But diving into their wins and losses, their quirks and behaviors - as we should with every generation - is helpful to making sense of the world.
Consider the aforementioned Pew and Fed studies that seemed conflicting at first, but ultimately revealed the heightened labor force participation among women. And consider the unique position of millennials find themselves in as the unluckiest generation in history - examining how we got here, what impact this will have, and how it has the potential to change society helps us find solutions to problems (like canceling student debt) and understand the how demography and the economy intersect.
For all the hype of millennials being "behind" other generations, they're really just setting new social norms, and that's something worth looking at.
Second of all, millennials have become an economic driving force. They're America's largest generation, represent the biggest percentage of the country's workforce, and hold the most spending power. For better or for worse, they're setting the tone for the economy until Gen Z takes over. Understanding their influence helps the economy spin, as brands employ new strategies to cater to millennial consumers and workplaces establish new perks and benefits to attract millennial talent.
Millennials - like every generation - change the shape of the economy in one way or the other. But that they entered both an economic crisis created by boomers and a new wave of technology has made them a guinea pig for public examination. If past generations grew up in a digital era the way millennials did, perhaps they would have encountered more scrutiny as well.