- In 2018, the Federal Reserve Bank of St. Louis published a study, which found that households headed by people born in the '80s, AKA millennials, had accumulated less wealth than previous generations had at a similar age, 34% less on average.

Yikes.

- Over the next few years, there were a torrent of articles and videos, including one of ours, examining how and why this so-called lost generation ended up with such a bum economic deal.

Were they screwed over by the boomers or an addiction to avocado toast?

- Then, in 2021, the same researchers took another look at the millennial financial forecast with new methods and fresh data, and found something surprising.

Somehow, over the last few years, millennials had made remarkable financial gains.

- Bae, does that mean we can eat real Tide pods again instead of the generic brand?

Can the lost generation finally start adulting?

- The data is a bit more nuanced than lost or found, but maybe, just maybe, we can call a truce in the intergenerational warfare.

- Cool beans.

(bright music) The 2016 data looked pretty grim for millennials.

Not only had they accumulated less wealth than Gen Xers and boomers at similar points in their lives, they were earning less income, had a lower rate of home ownership, and possibly as a result, were delaying big life milestones like marriage and kids.

- A lot of factors were suggested.

The soaring cost of college tuition had saddled the generation with unprecedented student debt, rising healthcare costs made it difficult to save for retirement or build an emergency fund, and a chronic housing shortage kept home prices too high for millennials to afford.

- [Julia] But the big reason was the Great Recession of 2008.

Many millennials were just entering the workforce when the economic landscape was at its bleakest state since the Great Depression.

The unemployment rate for young people was substantially higher than other age groups, meaning many millennials had no choice but to stay at their parents' homes using whatever income they could get to try and pay down big student loans.

The one thing they weren't doing was building wealth, a handicap that persisted for years.

- So, what turned things around?

Well, it took a while, but basically the economy improved.

Starting in the mid-2010s, unemployment fell, businesses recovered, and the demand for young professional labor rose.

By 2019, the median millennial household was making around $10,000 more a year than previous generations did at the same age.

And yes, that's adjusted for inflation.

- Wealth accumulation is still lagging a bit, but the gap has closed significantly, from 34% to only 11%, as millennials finally start paying down their student loans and investing money into stocks and real estate.

Home ownership rates from millennials are now at 52%, still below, but not far from boomers 57% at the same age.

It's almost like a rubber band effect, where the millennials were held back during the Great Recession, but then catapulted ahead by the Great Recovery.

- Education has a lot to do with that.

Millennials are much more likely to have a four-year college degree than previous generations which not only burdens them with debt, but also delays entry into the workforce.

But, as we've said in previous videos, that degree does pay off later in life.

Now, millennials are in their peak earning years at a time when the labor market is pretty favorable to them.

- Skrt!

Those numbers are totes on fleek, but there's something sus about it.

If things are so lit, then why is the vibe so off?

Is the struggle real?

- It's true.

Despite the positive data, millennials are still feeling a bit salty, at least if the platform formally known as Twitter is an accurate representation.

- Psychologist Jean Twenge hypothesizes that FOMO may play a part in this generational negativity.

Humans don't assess their status in a vacuum, but in relation to others.

If you perceive that your neighbors are doing better than you, you may experience what psychologists call relative deprivation.

- Now, that's been going on since the dawn of man, but thanks to social media, millennials may be the first generation exposed to an endless slideshow of wealth, luxury, and privilege, constantly reminding them of what they don't have.

Coupled with the general trend of news headlines on the right and the left, getting more angry, pessimistic, and fearful, this may have created a sense of economic despair that's hard to shake.

- This may seem like a dismissive take, but it's not like other generations didn't have their share of hardships.

Many Gen Xers also entered the workforce during a recession, had a higher rate of poverty than millennials, and lost a ton of wealth when the housing bubble burst in 2007.

And if you think this bout of inflation is bad, you don't wanna know what boomers had to live through in the '70s.

- This is not to say that all millennials have it easy.

We've been using words like median and average to describe a generally positive economic trend, but that may obscure a concerning financial divide within the millennial generation, and the main fault line seems to be education.

- While millennials with a four-year degree have enjoyed the benefits of a rising economy, those with only a high school diploma have actually lost ground compared to previous generations.

The same goes for millennial men, probably because of their lower rates of college attendance relative to millennial women.

With many women now outearning their male partners, it starts to make sense why millennial couples are delaying parenthood.

- Another group that is not enjoying a proportional share of the generational recovery is Black millennials who, while making slightly more than black Gen Xers and boomers did at a similar age, are a staggering 50% behind when it comes to accumulating wealth.

Much of this can be attributed to student debt, which tends to be much higher for Black graduates.

- [Julia] And if you're one of those millennials who managed to buy a house before home prices and interest rates shot up, you're probably sitting pretty right now.

If not, this ongoing housing shortage is a true financial nightmare.

- What all this suggests is that despite the headlines, the real economic dividing line in America isn't about generation, but generational wealth.

- If your parents helped you go to college without taking on a suffocating amount of student loans, if they could afford to support you during the recession so you didn't rack up credit card debt, or if they helped you buy a house when you were still in your 20s, you're probably ahead of them when they were your age.

- And that's kind of how it's always been, whether you were born in 1987 or 1947.