Are you tired of hearing about Millennials? I am. And I moved on to Gen Z a while back. Yet, after years of research and studies, I recently read something that wasn’t under my radar. This is not a rosy picture with a few cultural twists about Millennials. There are actually some sobering facts that we haven’t heard much about.
This largest generation cohort, ~80M strong, is not just about digital dependance, education, multiculturalism, social/environmental consciousness, work/life balance, love of travel and living with their parents too long. Although I must remind you, about 34% of millennials (18-34) still living with their parents. But according to the latest Pew research they also dominate poverty, lower household counts even with high population numbers, single motherhood, and renting/not owning homes.
Did you know…
1 Even with much lower household numbers, Millennial HHs are in poverty far greater than previous generations
According to Pew, in 2016, 5.3 million (out of the ~17 million) Millennial HHs are in poverty…. compared to 4.2 million headed by a Gen Xer and 5.0 million headed by a Baby Boomer. I read a Forbes article a while ago that nearly half of Millennials can’t even afford to cover a $500 emergency. Yes, half. Pew explains that Millennials are more racially and ethnically diverse than the other adult generations, and a greater share of Millennial households are headed by minorities, who tend to have higher poverty rates as primary reasons. That is certainly a major factor, but we’ve been experiencing major income polarization in the US this past decade and looks like Millennials are being squeezed to the poverty side more than other generations. And there are other economic factors….Millennials are first generation to earn less than parents (~20%) with highest level of unemployment, and at the same time, average student loan doubling…lowest earning, highest cost of education and living.
One of my major sound bites about millennials in my book has been about a significant portion of this generation (~1/3) being born into single unwed mothers. While this makes this generation culturally liberal with gender/racial equality, family planning hasn’t been in the forefront of their lifestyle priorities. And research shows a strong link between family structure/marital status and likelihood of living in poverty and overall financial circumstances. This leads into the second sobering fact:
2 Millennial HHs head by single mothers surpassed previous generations
Millennials represent 4 out of 8.6 million households headed by a single mother who lived with a child younger than 18….compared to 3.9 million Gen Xers, and only 0.6 million Baby Boomers. While there hasn’t been a significant increase since Gen X, it’s the trend that’s disturbing…a very sharp rise since 1980–from 19% to 34% in 2014 (26% single parent, 6% unmarried parents).
The numbers vary significantly across racial and ethnic groups, which again, are directly correlated to poverty (and most likely education) levels. 72% of White and 82% of Asian-American (82%) children are living with two married parents, while only 55% of Hispanics and 31% of black children are living with two married parents. This clearly has a direct correlation to increasing poverty.
3 Millennial households dominate the ranks of the nation’s renters and significantly less likely to own their home
Last year, Millennials headed 18.4 million of the estimated 45.9 million households that rent their home….compared to 12.9 million Gen Xers and 10.4 million Boomers. This isn’t just a reflection of their youth. Millennials, in general, are significantly less likely to own their home than prior generations around the same age. In 1982, 41% of households younger than 35 owned their homes. That number stayed relatively flat in 1999 (40% for Gen Xers). But by 2016, the share had dropped to 35% for Millennials.
I contribute some of this to the overall delaying of major adulthood milestones by about 5-8 years with Millennials, which also leads into the next fact. But again, this has big social, cultural and business implications. I’m sure the real estate industry is feeling this pinch, not to mention the technological impact on the industry. Millennials would rather travel than buy a home. They would rather rent than to give up small luxuries such as daily starbucks run and eating at favorite restaurants. But perhaps none of these trade-offs make up for the rising cost of buying a home.
4 About half of Millennials are cohabiting-couple households who are unmarried
Millennials last year headed 4.2 million out of 8.3 million cohabiting-couple households who are unmarried. In 1987, only 10% of 25-29-yr olds were cohabiting. In 2012, the number jumped up to 37%. I even read somewhere that a large portion of millennials are waiting until their 40s to get married. Again, while this is part of delaying adulthood milestones for this generation, there is a big cultural component at play….. it is not shameful to live with parents; it’s smart financial planning; it’s chasing a dream ahead…..it’s kosher to cohabit without marriage; it’s smarter to wait until ready financially and emotionally…. it’s culturally appreciated and praised if travel globally and gain worldly knowledge instead….experiences matter more than things….etc. It’s too early to tell if this trend will continue for Gen Z.
We can twist and turn numbers and facts in any which way we want. But maybe we can agree that this generation has just as much hardship as they have parental/societal entitlements and confidence.