Gen X, Gen Y falling behind parents' wealth
For young people today, the American dream of working hard, saving money and becoming richer than their parents may be out of reach, according to a recent study.
Americans in their mid-30s and younger have accumulated less wealth than their parents did at that age more than 25 years ago — a trend that threatens to weaken the economy, according to the study by the Urban Institute, which investigates and analyzes the country's social and economic problems.
Stagnant wages, diminishing job opportunities and lost home values are behind the issue and have kept Americans from saving even as the economy doubled from the early 1980s, the study found.
“Young people are falling behind,” said Caroline Ratcliffe, one of the authors of the “Lost Generations? Wealth Building Among Young Americans” report.
“Across different generations and ages, what we tend to see in this country is that each generation is better off and wealthier. The fact that this group is falling behind is very different,” said Ratcliffe, a senior fellow at the Urban Institute.
If young Americans cannot accumulate wealth over their lifetimes, such as people in prior generations, they will be less able to support themselves when they retire, Ratcliffe said. And her study points out that despite the relative youth of those in Gen X and Gen Y — people born since 1966 — they may not be able to make up the ground they have lost.
University of Dayton alumnus Rebecca Young said she has benefited from her parents' strong savings, and she hopes to one day do the same for her children.
At 23, she is working toward a master's degree and stocking what she can in a rainy day fund she has had since high school. But, she said, it can be difficult to save, especially for those young people who take out large student loans during college.
“People in my generation are of the opinion that it's okay to take out tens of thousands of dollars in student loans,” said Young, who graduated in May. “That puts them in debt right away.”
And with that money in their checking accounts, they do not take into account that they are spending borrowed money, Young added.
Student loan debt has increased in recent years and recently passed $1 trillion (more than credit card debt). Ratcliffe said those large loan burdens can have a ripple effect, delaying young people from being able to build a savings or buy a house.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- UPMC buying New Castle-based Jameson Health System
- U.S. Steel to restructure Canadian subsidiary, halt 2 U.S. expansion projects
- 2 top executives at Dick’s Sporting Goods to retire
- Mylan CEO Bresch sets sights on growth
- Tobacco growers forced to find profits as buyout checks end in October
- Pa. considers $300,000 plan to clean polluted site in Kennedy
- Congress: Safety agency mishandled GM recall
- UPS expects to hire up to 95K seasonal workers
- Fed speculation fuels stock gains; Dow rises 100 points
- American Airlines agents vote to join union
- Douglas Laboratories sells Klean Athlete: products free from banned substances