Could the millennials make up this lost ground? Perhaps, if wage growth suddenly and dramatically accelerates, urban cores start to build millions of new homes, and Congress announces a student-loan debt jubilee. But financial experts consider it unlikely. Millennials missed out on the big asset boom that occurred between 2010 and the present, and “appreciation is unlikely to be as rapid in the near future as it was during the recent period,” argue economists at the Federal Reserve. “With the baby boomers occupying most of the top jobs and much of the housing, millennials are doing less well than their parents,” concluded Credit Suisse. “We expect only a minority of high achievers and those in high-demand sectors such as technology or finance to effectively overcome the ‘millennial disadvantage.’”
The next recession — this year, next year, whenever it comes — will likely make that millennial disadvantage even worse. Already, millennials have put off saving and buying homes, as well as getting married and having babies, because of their crummy jobs and weighty student loans. A downturn that leads to higher unemployment and lower wages will force millennials to wait even longer to start accumulating wealth, making it far harder for them to accumulate any wealth at all. (Compound interest is magic, after all.) Their trajectory, already terrible, might get even worse.
And millennial suffering won’t just hurt millennials. There is accumulating evidence that the economy is more sclerotic and slower-growing than it might be if the millennials were able to buy homes, have families, start businesses, and spend like other generations — if the young were not existing just to pump up asset values for the old. Which reminds me — there’s one generation that might fare even worse than millennials: Generation Z.
Annie Lowrey is a staff writer at The Atlantic, where she covers economic policy.