Whoopi Goldberg recently blamed Millennials' financial problems on their work ethic, claiming that they only want to work four-hour days and simply don’t “bust their behinds” like her generation did.
“I’m sorry, if you only want to work four hours, it’s going to be harder for you to get a house,” the baby boomer Sister Act star with an estimated $60 million net worth said on last Wednesday’s episode of The View.
But actually, new research shows that millennials in the U.K. really are worse off than their parents.
That’s according to the Resolution Foundation’s annual intergenerational audit, which found that millennials– whom the study defines as those born between 1981 and 2000—are still bearing the “economic scars” of the 2008 financial crisis.
Historically, young people earn more on average than their parents at the same stage of life, but according to the researchers, this pattern has been broken for the first time since records began.
“Millennials born in the late 1980s earned, on average, 8% less at age 30 than members of generation X, born 10 years prior, at the same age,” the report said. “Millennial cohorts were the first to see no cohort-on-cohort income progress over much of the decade proceeding the financial crisis.”
People in the U.K. born in the late 1980s and early 1990s are still earning no more than those born in the 1970s did at the same age, the think tank stated.
Those now aged in their early 30s have experienced over two decades’ worth of lost progress on pay, it said, with U.K. millennials now on lower incomes than those before the financial crisis.
But across the Atlantic, American millennials are faring much better.
Despite a 'rough start', millennials in the States are 'thriving'
The 2008 crash also made a significant dent in American millennials’ earning power, however, they’re now starting to catch up with their parents.
Incomes for this generation were 21% higher in 2021 than in 2007. “It is possible that, despite “a rough start, the generation is thriving,” Resolution Foundation’s report hails.
But, with an almost 20-year age gap between the eldest and youngest millenials, the research suggests that these gains are being predominantly felt by the “older” of the lot.
In 2016, older millennials—those born in the 80s—were 40% below wealth expectations based on the previous generations’ wealth trajectory. Now that gap has significantly improved—in 2019 they faced just an 11% deficit.
“Young people across advanced economies were hit by the financial crisis, putting a stop to decades of progress. Fifteen years on, this ‘crisis cohort’ are no longer young,” Sophie Hale, the thinktank’s principal economist told the Guardian.
Even in Britain, millenials are faring better as they age: At age 29 the cohort born in 1981-85 had 14% less wealth than those born in 1976-80 when they were at the same age. But by age 33, that gap had narrowed to 2%.
But homeownership is still a pipe dream for many
While the Oscar-winning actress, Goldberg insisted that young people can’t get on the housing ladder because they’re lazy, the research shows otherwise.
As Goldberg’s millennial co-host Alyssa Farah pointed out, her generation is holding off having children and having to live with their parents well into adulthood because it’s so expensive to buy a home and start a family.
“Y’all gave us the housing crisis,” Farah hit out at boomers - and she’s not wrong: Young people today are far less likely to own their own home than generations before.
By the turn of the millennium, 67% of households aged 30-34 in the U.K. were homeowners, but by 2021, this figure had dropped by 20%. In comparison, in the States, homeownership by that age group has dropped by much less from 56% to 50%.
However, as the researchers point out, “historically lower homeownership rates for Baby Boomers and members of Gen X at ages 30-34 in the U.S. mean that it is considerably easier for U.S. Millennials to catch up to previous generations than it is for their U.K. counterpart.”
Ultimately, the decline in homeownership rates among millenials despite the narrowing wealth gap (in America, at least) suggests that they are missing out because the real estate market is outpacing wage growth—not because they're a generation of work-dodgers, as Goldberg suggested.
Separate research, based on Census data has found that, while home prices have jumped 118% in the last 50 years, after accounting for inflation, income has only increased by 15%. What's more, if home prices had grown at the same rate as income since 1985, the median U.S. home would cost roughly $261,650 instead of $433,100.
Meanwhile, with mortgage rates at around 8% and home prices on the rise, housing affordability is actually worse now than during the 2008 financial crash.
