Seniors are 40% richer than seniors in 1989, but Gen X and millennials' wealth is down 30% from prior generations http://t.co/3wgQElFhI0
— Investors.com (@IBDinvestors) August 18, 2015The 2008 financial crisis hit when Shelley Finke was a senior in college. "I remember completely freaking out to my dad, 'I'm never going to have a job,'" she said. "He had just bought a home that year, and he took a huge hit on it. It scared me to think about a house in that way."
Finke did get a job. And now she's house hunting, because her belief that paying rent is "throwing money out the window" outweighs the traumatic memory of the housing bubble bursting.
Even though she's doing all the right things — moving back in with her dad to save for a down payment, setting her sights on a town house rather than a single-family — Finke has one big strike against her.
Members of her generation, the millennials, and generation X, born just before them, have far less wealth than older folks.
Americans 62 and older were 40% wealthier in 2013 than people that age were in 1989, but the middle-aged and young were about 30% less wealthy, St. Louis Federal Reserve researchers noted in a recent report.
Young people just starting out almost never have as much wealth as those at the end of their careers. But the researchers broke down the numbers another way. In 1989, the median wealth of the old, middle-aged and young was $149,728, $153,759 and $19,830 (in 2013 dollars). In 2013, those figures had jumped for seniors, to $209,590, but fallen for the middle-aged and young, to $106,094 and $14,220.
Wealth matters in ways that earning power — jobs and wages — does not. This generational wealth gap is reshaping the economy. It's also making many younger people feel they have it worse than their parents — a cruel distortion of the American dream.
Finke says she's lucky. Her parents didn't go to college, but managed to help her finance her education. But she and her friends feel worse off than their parents.
"It always seems like we're living paycheck to paycheck, and it's hard to save," she said. "I don't know why it's been more of a struggle for us."
The St. Louis Fed researchers offer a few reasons.
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