Month: November 2025

The stereotypical millennial plight goes something like this: A guy or gal staring down 40 is trapped in a perpetual struggle to launch. They’ve finally moved out of their parents’ homes, but later than their judgmental relatives expected. They’re getting around to marriage and kids, but they’re forever screwed on housing, still trying to shake the ghosts of the post-Great Recession job market, and drowning in student debt. They’ve developed a strange animosity toward their baby boomer parents, who seemingly had it all and won’t let go.

Much of this stereotype, however, is more feeling than fact, especially when it’s repeated by frustrated millennials themselves. Despite their gripes, the generation born between 1981 and 1996 is doing quite a bit better financially than their parents. It’s just that they’re not outpacing them as much as they expected, especially millennials on the wealthier end of the scale, who are accustomed to everything being extra great. That’s a marked shift, since it was wealthier baby boomers who were the biggest winners of their generation. Poorer millennials are actually doing better than Americans at the lower end of the income scale in previous generations, but poor in America is still pretty bad, and for the rich, the narrowing of the income gap can be uncomfortable.

That’s one of the takeaways from a recent paper out of the Federal Reserve Board comparing how Gen X and millennials are faring on their economic journeys. The findings: When Gen Xers and millennials hit their late 30s they had a median household real (aka inflation-adjusted) income 16% and 18% higher, respectively, compared to the generation before them at the same age, whereas the Silent Generation and baby boomers had increases of 34% and 27%, respectively.

“It’s taking longer to launch, there is some more debt, but in the long run, millennials are actually doing better than Generation X and baby boomers,” says Kevin Corinth, a senior fellow and deputy director of the Center for Opportunity and Social Mobility at the American Enterprise Institute and one of the paper’s authors. “It’s just taking them a longer time.”

Nobody likes to hear, “You’ll be OK … eventually,” or face the reality of life not working out quite as expected, and so it tracks that millennials would be vocal about the economy not being a bang-up time. The issue isn’t necessarily struggling, it’s recalibrating expectations.

Blame women for millennials not doing as well as their parents — or, rather, their moms. I’m kidding, but women in the workforce do explain much of what’s going on. Many more baby boomer women launched careers compared to their mothers, which boosted household incomes and drove the outsize gains in generation-to-generation wellbeing. Chances are, if you’re a millennial woman or Gen X, your mom had a job, so any gains you make are going to come from fighting for a raise.

“There wasn’t more juice to squeeze to get additional income growth out of that, so now we’re really relying on increased wages,” Corinth says.

People who have always had access to social mobility no longer having such easy access to social mobility does have implications for the general sort of malaise about the economy.

Wage growth can be a slow process, and thanks to the recovery from the Great Recession and pandemic-related labor market pressures, people at the bottom of the income distribution have seen bigger gains than people at the top. From January 2020 to June 2023, real hourly earnings for people in the 10th percentile of the wage distribution rose by 7.8%, while they fell by 6% and 8% for those in the 50th and 90th percentiles, according to a paper from researchers David Autor, Arindrajit Dube, and Annie McGrew, meaning wage gains were concentrated among lower-income workers while higher-income workers lost ground.

At the same time, millennials higher up the income distribution are feeling squeezed. Yes, the jobs market is always pretty good for higher-income, college-educated people — the unemployment rate for college-educated workers in the US is persistently well under 3% — but things for the typically comfortable are feeling a little uncomfortable right now. Many white-collar workers are having a hard time getting hired, and the headlines about mass layoffs at big companies are unnerving, as is the threat posed by AI. Even if you are doing fairly well, you may not love that people at lower incomes are catching up, while at the same time, the peak of the income scale doesn’t feel any closer.

“The people who I call the lower-rich, they have never felt poor before. Now, they’re not poor, either, but there is such a wide gap between what you earn as a young lawyer in a firm in New York compared to someone that works in private equity or that works at a hedge fund,” says A. Mechele Dickerson, the author of the forthcoming book “The Middle-Class New Deal Restoring Upward Mobility and the American Dream.” “For the lower rich, they’ve never been in a space where the number that they are earning doesn’t actually make them rich in their mind. It makes them poor.”

I do not want to dump on the plight of more well-off millennials, given that I am probably one of them. Obviously, everyone’s personal situations are different, problems are problems, and the supposed American dream dictates that you’re supposed to pull yourself up by your bootstraps, be upwardly mobile, and outdo your parents.

The country is in the midst of an affordability crisis that hits everyone. The housing market is a complete drag — the typical age of a first-time homebuyer is 40, which doesn’t feel good as an age to have finally “made it.” A college education still pays off, but many students are saddled with debt that makes it feel like it doesn’t. Younger millennials who are doing well may not internalize it because they’re still living off their parents’ money.

The confluence of these elements “really creates the condition for dissatisfaction for folks who thought they could have it all,” says Rakeen Mabud, an associate fellow at Common Wealth, an economic think tank. “People who have always had access to social mobility no longer having such easy access to social mobility does have implications for the general sort of malaise about the economy.”

This not only creates a sense of unease among millennials, but also triggers a lot of the generational animus millennials have toward boomers — though thinking your parents had it easier isn’t particularly unique to the avocado toast cohort. “Almost every generation is like this,” says Matt Darling, a senior research associate at MEF Associates, a social policy research firm. People tend to downplay the tribulations that plagued previous generations — after all, they weren’t around for them. Millennials frustrated by post-pandemic inflation could probably stand to talk to boomers about how they dealt with it in the 1970s and ’80s. “Every generation has its own unique challenges, and every generation forgets about what happened previously,” Darling says.

As big-ticket items have become increasingly expensive — housing, healthcare, childcare, education — it’s become easy to overlook the smaller-ticket items that have gotten cheaper. Yes, sending your kid to preschool is going to hit you where it hurts, but at least the toys you buy them and the clothes you put them in nowadays are super inexpensive. The same goes for that iPad you let them play with more than you should.

They feel so vulnerable because they’re looking at what the ultra-elite rich are doing and can afford to do, and, in comparison, they feel poor.

“As these items become a less big part of our spending, they also sort of drop out of our memory,” Darling says. They’re also all that’s left of whatever the American dream is.

Consumers are wired to want more more more, and while baby boomers are often knocked as a hyper-materialist generation, millennials and Gen X are not exactly living light, stuff-wise. The thing is, getting more doesn’t necessarily make you happier. The hedonic treadmill says that people generally revert to their normal level of happiness relatively quickly after they acquire the new fun thing. Finally closing on that house at 40 will feel good for a while, but eventually, it’ll become the new norm, and you’re suddenly itching for a place with one more bedroom.

Many millennials near the top (but not at the tip-top) feel a sense of precarity and scarcity. They feel the need to optimize their children’s education and extracurriculars in order to ensure they get into the best schools. They’re hyper-focused on their investments since their retirement depends on their own savings and 401(k)s, rather than a defined pension. They work extra-long hours in hopes that their boss might feel a twinge of guilt before putting them on the layoff list.

“They feel so vulnerable because they’re looking at what the ultra-elite rich are doing and can afford to do, and, in comparison, they feel poor,” Dickerson says.

They also don’t feel very rich, comparatively, looking below them. As much as many wealthier people might not admit it, or even recognize it, wage compression — the shrinking of the pay gap up and down the income spectrum — can be discomforting for people at the top. If you spend a bunch of money on a college education and run into your cousin who just graduated from high school and realize they’re making the same money as you, there’s an understandable sense of, “Wait, what was all that for?”

As workers at the bottom earn more, it can also push up prices for the better-off. Part of the reason people are annoyed by the high cost of their DoorDash orders is that delivery drivers may have a minimum amount they need to earn. That tip you’re angry at at the coffee counter is supplementing the barista’s pay, whose wages have gone up anyway in recent years and are making your fancy coffee pricier. Most people would agree it’s good for home health aides to be paid more — until they try to hire one to take care of their parents. What’s more, that aide’s pay bump probably isn’t bumping them into the middle class, so they’re still struggling, even if it’s to a comparatively lesser degree.

Despite some of the vibes (a word I hate to employ given how overused it’s become), millennials are generally fine. Life’s just moving a little slower, and fine often doesn’t feel especially good.

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.