If you thought that Americans today are worse off financially than previous generations, you’re not off the mark. The feeling that the cost of living is increasing while the ability to buy things we previously took for granted is decreasing has been demonstrated by survey data that shows that Americans today are not doing as well as they used to.
Recent survey data of millennial households showed that they have an average net worth of $12,500, as measured in 2017 dollars. Similar data from the past showed that Generation X households had a net inflation-adjusted worth of $15,100 at the same age in 2001, while Baby Boomer households had a net worth of $20,700 at the same age in 1983. That means that millennials are about 40% poorer than their parents were at the same age.
Higher levels of debt are partially to blame, as millennials carry more student debt and more credit card debt than previous generations did. But earning power is also to blame, as earnings for young workers have been basically flat for the past 50 years. Lack of salary growth combined with higher debt levels and more expensive goods and services isn’t exactly a recipe for accumulating wealth.
That’s probably best summed up in a study that assessed the likelihood of Americans today to do better than their parents. Whereas baby boomers born in the 1940s had a 90% chance of doing better than their parents, children born in the 1980s have only a 50% chance of doing better than their parents. In other words, millennials have only a 50/50 chance of improving their quality of life. For many, their best and most comfortable years may have already passed them by.
That doesn’t make for very happy people, and will result in many unhappy voters who will likely look to political saviors to bring back the prosperity they once had. But with politicians in Washington content to spend like drunken sailors and continue burdening the economy with restrictive taxes and regulations, that ship of prosperity may have long since sailed. The US is showing more and more signs of a fading empire that will never regain its lost glory.