Illustration by Emma Kumer

Not All Millennials | Generational Wealth and the New Inequality

Kiara Barrow

Peddlers of self-help and pop-psychology are quick to assure us that we’re each our own toughest critic. In fact, it’s often our peers who will exact the harshest judgments, being best positioned to sniff out the social cues and latent hierarchies that are most legible within a shared milieu. Last year, Pete Buttigieg, the only millennial candidate in the Democratic Presidential field, failed to win the support of other members of his generation (which is also mine) — a February 2020 poll of 18-34 year olds placed him at a pitiful 6%. The résumé stacked with institutional achievement felt a little too polished, and he was widely regarded with the kind of disdain reserved for teachers’ pets. Columbia students called him “the old man’s millennial,” the kind of ideal young person that our parents measure us against: Harvard, Rhodes scholarship, military service, McKinsey, not quite so politically radical. 

Pitted against AOC for the title of Anointed Millennial Politician, he simply didn’t stand a chance. Setting aside the charisma differential, Ocasio-Cortez is an avatar of the leftist politics that has become de rigueur for a large chunk of our economically disenfranchised generation. Her commitment to progressive issues is the product of a lived experience that can’t be replicated by the shrewdest political strategists: famously, she was working as a bartender when she was elected to Congress; when she moved to DC, she struggled to afford rent. Critics have investigated the value of her childhood home and other such clues in an effort to challenge this narrative of precarity, but the specifics hardly matter. Where Buttigieg represents an outdated fantasy of meritocratic accomplishment, Ocasio-Cortez’s story is millennial realism. 

Our parents were born in an era of expansive American appetites — for global influence, for fossil fuels, for personal advancement — and presented with a broad horizon of individual and collective possibilities. They proceeded to mine the productive economy for everything it was worth and then sell it for parts, and millennials’ capacity for their brand of youthful optimism has been blunted by the historical rejoinders that followed. The crises that shocked the first decade of the 2000s — and then settled into a state of apparent permanence — shaped our era into one of contracting possibilities, scarcity, and skepticism about the future. 

Widening income and wealth inequalities, and millennials’ dim economic prospects, have led the media to reevaluate its initial verdict on the generation. First, we were entitled, distracted avocado toast addicts who couldn’t budget. But the past few years have seen an increasingly sympathetic shift, as even the bootstrap scolds have been forced to admit that structural factors might be impacting our generation’s failure to meet expected benchmarks of middle-class adulthood. Publications that were once obsessed with admonishing us became obsessed with declaring our economic prospects hopeless. “The Coronavirus Means Millennials Are More Screwed Than Ever,” wrote The Daily Beast in May, a month after The Atlantic declared, “Millennials Don’t Stand A Chance.” Definitively, from The Washington Post: “Millennials are the unluckiest generation in U.S. history.” 

Generational insiders have worked hard at narrativizing this predicament: Anne Helen Petersen most recently posited “burnout” as the dominant affective response to skyrocketing precarity and worsening prospects amid constantly multiplying demands on our time, attention, and labor in her viral article-turned-book Can’t Even: How Millennials Became the Burnout Generation. If our toothbrushes (Quip), mattresses (Casper), suitcases (Away), and novels (Sally Rooney) match, so too, we are given to believe, do our emotional states. “The weight of living amidst that sort of emotional, physical, and financial precarity is staggering,” she writes, describing a condition of exhaustion battling the steady impetus to do more. In 2017, Malcolm Harris’s Kids These Days: Human Capital and the Making of Millennials offered the most thorough accounting yet of the structures underpinning millennial psyches. He explains the way that the forces of neoliberalism, with its imperative to optimize profitability in every facet of life, have set millennials on an impossible and unending racecourse. His book is now frequently cited alongside Petersen’s; in The Nation in November, Jeremy Gordon wrote that the two “draw on a similar body of evidence to demonstrate how and why we got here, because the facts aren’t really up for debate.” Many bleak statistics, which hardly need repeating at this point, bear that sentiment out. Millennials control 4 percent of aggregate wealth, compared to the Baby Boomers’ 21 percent at the same age, and in the era of precarious employment (47 percent of millennials freelance either some or all of the time), we can’t and won’t earn our way out of that hole. 

These books, and the slew of accompanying articles, have illuminated the millennial experience and identified the structural barriers we face, drawing a direct line from our debts, wages, and shattered expectations to policy choices made in the last few decades. They have also been used in service of a flattening narrative that creates a frame around our generation and a shorthand for a shared experience that is frequently gestured at, even when it’s not necessarily earned. Last summer, Rachel Connolly put her finger on the way that a distinct “we’re all in this together” ethos papers over intra-generational class distinctions. “Those who stand to inherit substantial wealth will complain they are crippled by the high cost of rent,” she writes, “and those with rich and famous parents will speak, darkly, of “hustling” their way into the industries in which their relatives work.” I immediately recognized in her description the discreet millennial landlords and “broke” trust-funders I’ve met, and I’d venture to guess that I’m not alone.

The millennial social condition is analogous to the one that has arisen during the pandemic: despite a wildly unequal material reality, essential workers, the unemployed, and those with cushy remote jobs have all experienced a brutal lifestyle disruption, a severe narrowing of options, and a blow to mental health and happiness. Almost across the board, millennials will do worse than their parents, inheriting a harsher and more difficult world, but not all of us will experience this in the same way. For a generation that has developed a complex language and conceptual rubric for privilege, it’s curious that this phenomenon has yet to receive as much attention, that the authenticity tests we’ve administered to Buttigieg and Ocasio-Cortez have not yet translated to a broader reckoning with what’s coming. 

 

Some millennials are already receiving financial help from their parents (in fact, many: the Times reported one estimate that “more than half (53 percent) of Americans ages 21 to 37 have received some form of financial assistance from a parent, guardian or family member since turning 21.”) Others can soon expect a life-altering infusion of cash, either in the form of posthumous bequests or transfers — like help with a down payment — made while parents are still alive. These gifts have become more significant than ever now that the wage labor market can no longer serve as a corrective to unevenly distributed parental wealth. Yet another group may see its economic position shift later in life: after struggling to pay the bills until age 50 or later, outcomes will suddenly diverge even among those who hold the same job. 

The financial industry is calling the coming shift a “great wealth transfer.” Morgan Stanley has referred to it as the “$30 Trillion Challenge” after one study specified that amount as the sum of wealth that will pass into millennials’ hands between 2031 and 2045. Their advisors are standing at the ready: “Morgan Stanley is committed to helping this generation prepare for its inheritance and achieve the amazing,” reads their website. CapitalOne/United Income predicts $36 trillion; Cerulli Associates places their estimate at $68 trillion; PNC Bank predicts $59 trillion; Wealth-X says $15 trillion by 2030. Regardless, The Economist wrote in October, “Wall Street will soon have to take millennial investors seriously.” Forbes wrote in 2019 that “Millennials Will Become Richest Generation In American History As Baby Boomers Transfer Their Over Wealth,” the same year that the Times asked, “A ‘Great Wealth Transfer’ Is Coming. What Will It Mean for Art?” 

Quantifying exactly how much of it will go where is difficult. Certainly, many boomers will have their own economic challenges to contend with in the coming decades, particularly if they continue, with such blind insistence, to block the millennial left’s attempts to make healthcare more affordable. Much of boomer wealth is already concentrated among a small number of people, and it will remain so. The share of households that have received inheritances of any amount has remained stable over the past few decades, but it’s more than likely to rise for millennials thanks to the Baby Boomers’ inordinate share of wealth. A recent survey showed that 40 percent of Boomers planned to leave something behind, and United Income/Capital One’s study predicted that the wealth transfer will benefit, to some extent, one out of five American households. While the wealthiest are inheriting more thanks to growth at the very top, the median amount bequeathed has also risen by $15,000 over the past 30 years.

The distribution of this inheritance will fall along the lines of existing inequalities, deepening the fractures in any millennial program of economic solidarity. Homeownership rates are a useful measure of these faultlines. A staggering 92 percent of millennial millionaires already own property. For the average non-millionaire millennial, the number is 39 percent; for Black millennials, it’s only 14.5 percent. An Urban Institute study found that the Fair Housing Act, passed in 1968, has had no effect in narrowing the gap between Black and white homeownership, and that Black communities have been much slower to assimilate the effects of the post-2008 recovery. With Black households averaging one-tenth the wealth of white families, this resource gap will not only persist but widen within our generation as money is passed among white families who have had the opportunity to accrue it over the course of decades, if not centuries. 

 

Placing income and employment status at the center of class analysis makes intuitive sense, and it is part of the conditioning one typically receives during the course of an American education. The narrative of self-fashioning remains shockingly bulletproof, and perhaps this cultural delusion has helped guide our attention towards the problem of income inequality. A new book, The Asset Economy, provides a forceful argument against using wages as a measure of economic fates. The Asset Economy is a collaboration between Lisa Adkins, Melinda Cooper, and Martijn Konings, three sociologists based at the University of Sydney. Their work synthesizes concurrent trends across Australia, the U.S., and the U.K. to argue that asset ownership — particularly property — has supplanted income, education, and occupation as the key determinant of class position, a reality that is set to become especially salient during millennials’ lifetimes.

Neoliberal policies, they point out, have been deliberately designed to inflate the value of real estate over the past several decades. This inflation has in part been an effort to pad out the fortunes of the very wealthiest, but it has also served to encourage broader buy-in to the “asset economy” — in other words, the speculative realm in which wealth is built over a long period of time, and with the help of credit. Here, the usual risks involved in speculative investments have been artificially mitigated. Property assets enjoy more protections than ever — the housing market rebounded even after the 2008 crisis — and investing in appreciating property has become essential to the possibility of accruing wealth. At the same time, soaring prices, combined with the simultaneous decline in wages, have locked out new buyers, except for those with access to parental help. As a result, the patterns of wealth accumulation that were set in motion while real estate was still up for grabs are being cemented in place. 

The 1980s are well recognized as the era that ushered in a policy regime favorable to those who participate in the financialized economy, earning income through capital gains. Adkins et al. link this trend with a desire to protect the value of property assets, which had been threatened by the inflation of the previous decade. “Throughout the 1970s,” they write, “wealth holders were at a loss to find safe avenues of investment.” This led central banks to a new commitment to rigorously police inflation when it came to wages, but not assets. Adkins and co. write that this “would very likely have generated significant social unrest,” but policymakers shored up enough popular support with the promise of at least some broad access to the wealth-generating engine of asset appreciation.

In England, Margaret Thatcher debuted a scheme for allowing residents of public housing to purchase their homes from the government; in the U.S., Reagan touted pension plans for the masses. He also resuscitated the “stock option,” which would regain popularity during the dot-com boom of the 1990s. The Clinton era saw the extension of this fealty to the financial sector with the advent of the idea of the individual as an investment that would appreciate over time as it was traded on and monetized through education and training. Clinton’s program remained couched in the language of jobs even as he oversaw the continued dominion of assets and capital. Adkins and co. note that his first inaugural promised “good-paying jobs,” a classic example of the way that Democratic sloganeering often sounds like something that was poorly translated from a different language, but which the party nevertheless remains mystifyingly attached to — my spam folder is full of political fundraising emails that use this phrase. 

The promise of future payoff kept shifting. While Clinton began by promoting education and skills as the most viable path to the middle class (the antecedent of today’s “learn to code”), he and other “Third Way” governments ended up “reverting to housing or stocks as the most practical route to policy change.” The Asset Economy argues that the expansion of subprime mortgages was partially an attempt to create widespread shares in the asset economy via housing. Policymakers foresaw a future in which “everyone could borrow their way into the asset economy with the help of unusually cheap and abundant credit,” but “only at the price of unprecedented levels of household debt.” Over time, part of the justification for suppressing wages has been the promise of alternate streams of wealth — even a modest portfolio padded with property and pensions. Now, the bait-and-switch that substituted democratized asset ownership for livable wages has left a new generation without the prospect of either. 

The asset paradigm is not, of course, entirely new: here, Adkins et al. have systematized the truism that upward mobility no longer exists. Their work is explicitly situated in the tradition of Piketty, who wrote in Capital and the Twenty-First Century, “inequalities of wealth exist primarily within age cohorts, and inherited wealth comes close to being as decisive at the beginning of the twenty-first century as it was in the age of Balzac’s Père Goriot.” However, they argue that Piketty’s analysis was not, even across 696 pages, thorough enough in outlining the ways in which generational wealth is decisive. The inheritance of, or relation to, property is so crucial that, on its own, it will increasingly shape class status at every level, not just for the super-rich. At the top of their organizational chart are the investors who have priced themselves out of the asset economy by dint of extreme hoarding. They’re followed by outright homeowners and homeowners with mortgages, renters, and, finally, the unhoused. (Each of these classifications is further subdivided.) The authors describe this new class logic as a kind of neofeudalism — “neo” because relations are shaped, rather than by static inheritance of property, by the fluctuating value of investments over time, and specific interventions like assistance with a down payment.

Unexplored in the book, due to its scope, are the clear racial implications of an asset-based formulation of class. Given the history of racist housing discrimination in America, Black millennials face an incredible disadvantage in an economic field where having parents who are homeowners increases a child’s likelihood of becoming the same by 8.4 percentage points. If relationship to property is as powerful, at every level, as The Asset Economy posits, the unequal situation begins to appear even more dire. Ultimately, “what distinguishes successive generations today is less a difference in absolute wealth holdings,” they write, “than a difference in modes of access to wealth. In time, millennials will end up with even more wealth than the Baby Boomers.” The Asset Economy both supports and undermines the possibility of generational analysis. In their view, this powerful vector of inequality differentiates our experience from that of our predecessors. But asset-based wealth is not an age- or generation-based metric of inequality; it doesn’t cordon off millennials as a distinct group. Rather, it delineates categories within the millennial generation based on family relationships and resources. 

The book also helps us fill out analyses of the way that millennials work, or the way that they feel after work, by unlocking a new dimension to career burnout. Forget fulfillment and passion — chasing stability through employment becomes a fool’s errand if wages increasingly fail to keep pace with the cost of living, or are offset by the educational debt required to qualify for them in the first place. But we may be even more stymied by the fact that the locus of economic stability has been shifted somewhere else entirely — to a housing market that’s out of reach for all but those with inherited wealth. The much-discussed “end of work” may have already come if the function of employment has been peeled off from any possibility of building wealth or even basic security. 

 

An awareness that employment is being decoupled from wealth and class position has crept into millennial culture. Much of the recent backlash to the “girlboss” has been born of the recognition that hustling and leaning in will not be enough to climb the ladder. Each year, Forbes’s “30 Under 30” list seems to garner more and more contempt. But the narrative of universal millennial precarity has risen alongside a tendency towards the obfuscation of class. 

This trend has been accelerated by the democratization of certain traditional class markers — still only for a select group of millennials, but a group that nevertheless becomes highly visible, particularly in media. The expansion of financial aid at elite educational institutions, the growing accessibility of travel, and the convergence of taste towards a set of midrange consumer goods have all helped make the appearance of wealth more slippery for more of us. The pastel millennial design aesthetic has been thoroughly catalogued; in April, Amanda Mull wrote about the way that a proliferation of knockoffs and high-end approximations can allow us to feel like we’re “slipping through a tear in the fabric of capitalism.” It’s my suspicion that one of several reasons that millennials have gravitated toward certain ubiquitous brands is that they function as a form of class camouflage. Jia Tolentino aptly described the pricing of popular dressmaker Reformation as “just the right amount to blur the lines between those who thought of a two-hundred-and-eighteen-dollar jumpsuit as an affordable basic and those for whom it would be an impractical splurge.” 

Working in urban creative industries has always required a delicate balance between the performance of affluence and the performance of poverty; Daisy Alioto recently referenced the “middle class kids who move to New York City in their 20s and are careful to describe themselves as ‘broke’ and not ‘poor.’” Perhaps this is truer for more millennials, in more ways; perhaps it’s the same old story. But for a group famously enamored with socialism, being publicly outed as a beneficiary of unearned privilege is particularly excruciating and creates another set of incentives to muddy the water. In December, the Times published “The Rich Kids Who Want to Tear Down Capitalism,” revealing its subjects’ eye-popping fluency with once-radical language (“When I think about outlet malls, I think about intersectional oppression,” declares the heir to an outlet mall fortune). Not all wealthy millennials will be quite so proactive about offering up their fortunes, however. And since there are a great many gradations between the poorest millennials and these extraordinarily wealthy ones, it seems urgent to further develop our understanding of the factors that will continue to drive millennial inequality at every level in the coming decades, and how we can effectively mitigate them. 

The millennial consensus is valuable as a method of community-building, but it’s not always a durable means of solidarity-building — or crafting effective policy remedies — when it obscures class differences among us. Sharpening our analyses of shifting inequality will help us make more ethical demands of each other, without only resorting to complaints about the previous generations who shaped our apocalyptic present.

Kiara Barrow is an editor at The Drift.

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