Millennials Lead the Pack with Student Loan Debt: $1.71 Trillion in Student Debt and Millennials Continue to Struggle with Debt Overload. What Does it take to Purchase a Home and why Boomer Logic is so off?
It should come as no surprise that Millennials continue to lead the pack in terms of student loan debt. The average debt carried by a Millennial is over $40,000. According to the US Census per capita income is $34,103 and the amount of student loan debt is deeply troubling since it is higher than one year of working income for a typical American. We hear the constant drum beat from older generations especially baby boomers that Millennials “need to suck it up†and save to purchase a home but that is largely nonsense. Why? Baby boomers in the US grew up at a time when one blue collar income was enough to buy a modest house in most metro areas. Today that is not the case. Minimum wage is $7.25 per hour and most good paying jobs require some form of education. It is important to highlight this because Millennial home buying is falling behind previous generations and each year that goes by creates one more year that wealth is not being built.
Read MoreOldest Millennials Near 40: 1 in 5 are single dads and more than 40 percent do not live with a family of their own.
A big portion of the baby boomer controlled media tends to talk about Millennials as if they are children or young adults. So it should be sobering to many to know that this year, the oldest Millennials are 39-years old. That is not a kid or a young adult. That is a grown person that is beyond the “adulting†stage but somehow the narrative continues to paint Millennials as young avocado toast eating hippies that need to figure it out pronto. Maybe this is a generational thing, but Millennials have faced bigger economic challenges than baby boomers. Housing seems to be the biggest issue given it consumes the largest portion of a household budget. The inability to buy a home is startling whereas many baby boomers were able to purchase homes with one blue collar job – now many households are facing the two income trap. So what can we gather from new data on Millennials as they reach their 40s?
Read MoreA Record Number of Young Adults Living at Home: Levels Not Seen Since the Great Depression.
The market is incredibly tilted against young Americans. $1.7 trillion in student debt is outstanding and most of that has taken a pause in the last year thanks to the pandemic. Most of that debt is in the hands of young Americans who are paying record high tuition costs and are unable to purchase homes given the market is artificially setup to favor older homeowners with low rates and protection programs to keep values inflated while wages are depressed. It is a stark contrast when the Fed is willing to pump out trillions of dollars to save banks and key players but raising the minimum wages gets completely shut down. It should tell you where priorities exist. However, even though we are seeing manias in stocks, crypto, real estate, and other areas wages remain depressed. So it is no shock that a record number of young people are living at home.
Read MoreInflation is Eroding Purchasing Power and Hurting Millennials the Most: Exploring the Cost of Two Important Items from 2000 to 2020.
While we are still dealing with the fallout brought on by Covid-19, the group most impacted by the pandemic is young workers. They are disproportionately shouldering the hits that have come from the pandemic. Many are unable to telework and others are employed by industries that tend to pay less and have largely shut down because of the pandemic. Yet they are also paying record levels of college tuition for remote learning and many did not enjoy the record runup in the stock market because very few younger Americans own any stocks. While it might be difficult to track everything that is happening right now, inflation is eroding the purchasing power of younger Americans and we can see this in the data when we compare the cost of a few major items from 2000 to 2020. Â
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