The Theft of a Decade

1. Millennials face unprecedented economic challenges despite being the most educated generation

"Millennials are the best-educated generation in human history, and this rate of college attendance is how it happened. Never in human history have so many known so much—and still been so underemployed."

Education paradox. Millennials have achieved unprecedented levels of education, with college attendance rates soaring to 70% for those born in 1991. This surge in higher education was driven by the belief that it would lead to better job prospects and financial security.

Economic reality. However, the promised rewards have not materialized for many. Despite their educational attainments, Millennials face:

• Higher unemployment rates compared to previous generations at the same age
• Stagnant wages that haven't kept pace with rising living costs
• Underemployment, with many working in jobs that don't require their level of education
• Greater economic inequality among their cohort

This disconnect between educational achievement and economic outcomes has left many Millennials disillusioned and financially strained, challenging long-held assumptions about the value of higher education in the modern economy.

2. The Great Recession disproportionately impacted Millennials' job prospects and career trajectories

"Millennials have fallen victim to two separate but closely related economic problems. The first is a longer-term transformation in the American economy, and it isn't quite the transformation most people usually have in mind when this subject comes up."

Recession's long shadow. The 2008 financial crisis and subsequent Great Recession hit Millennials at a crucial juncture in their economic lives. This timing had profound and lasting effects:

• Job market entry during recession led to lower starting salaries
• Career progression was stunted, with effects lasting over a decade
• Many were forced into underemployment or gig work

Structural changes. Beyond cyclical factors, Millennials entered a job market undergoing fundamental shifts:

• Automation and AI displacing routine jobs
• Decline of traditional middle-skill jobs
• Rise of the knowledge economy favoring high-skilled workers
• Increasing job polarization between high and low-wage work

These structural changes, combined with the recession's impact, created a "double whammy" for Millennials, making it harder to establish stable careers and achieve financial milestones compared to previous generations.

3. Student debt burden hampers Millennials' financial security and major life decisions

"Millennials have come of age in an era when individuals are more directly responsible for their own retirements than any recent generation has been."

Debt mountain. The explosion of student debt has become a defining feature of the Millennial experience:

• Total student debt reached $1.4 trillion by 2018
• Average debt for bachelor's degree: $28,400
• 43% of Millennials report having "too much debt"

Life impact. This debt burden has far-reaching consequences:

• Delayed homeownership
• Postponed marriage and family formation
• Reduced ability to save for retirement
• Lower overall net worth compared to previous generations at the same age

The student debt crisis represents a significant transfer of financial risk onto Millennials, forcing them to shoulder greater responsibility for their economic futures while starting from a position of indebtedness.

4. Housing market dynamics make homeownership increasingly unattainable for Millennials

"Britain has neglected to build enough homes. Estimates vary widely on how many new homes Britain needs each year, but almost everyone agrees it's not building anywhere close to that number."

Global trend. While the book focuses on the UK, similar patterns are evident in many developed countries, including the US:

• Housing supply failing to keep up with demand in economically vibrant areas
• Prices rising faster than wages, especially in urban centers
• Stricter lending standards post-2008 making mortgages harder to obtain

Millennial impact:

• Homeownership rates significantly lower than previous generations at the same age
• Forced to rent longer, often in expensive markets
• Delayed wealth accumulation through property ownership
• Intergenerational wealth transfer as older homeowners benefit from price appreciation

This housing crunch not only affects Millennials' immediate living situations but also their long-term financial prospects and ability to build wealth through traditional means.

5. Gig economy and labor market shifts create job instability for Millennials

"The simplest explanation for this is that Americans forgot how to save and invest—meaning that we grew less willing or able to direct our own resources into investments in boosting productivity for the future, and instead became ever more reliant on borrowing to fund just enough investment to deliver quick hits of economic growth."

Changing nature of work. The rise of the gig economy and shift away from traditional employment models has profound implications for Millennials:

• Increased flexibility but decreased job security
• Limited access to employer-provided benefits (health insurance, retirement plans)
• Income volatility and unpredictable work schedules
• Difficulty in career progression and skill development

Broader economic shifts:

• Decline in labor's share of GDP
• Shift towards capital-intensive industries
• Reduced investment in worker training by companies

These trends have created a more precarious work environment for Millennials, requiring them to navigate a job market with fewer of the stabilizing features that benefited previous generations.

6. Boomers' policy decisions have inadvertently burdened Millennials financially

"Boomers didn't inherit a great job market and break it, so much as they inherited a tough job market and made it a lot worse."

Policy missteps. While not intentional, many decisions made by Boomer policymakers have had negative consequences for Millennials:

• Expansion of student loan programs without adequate cost controls
• Housing policies that favored existing homeowners over new buyers
• Monetary policies that disproportionately benefited asset-holders
• Insufficient action on long-term entitlement reform

Generational transfer. These policies have effectively shifted economic burdens onto younger generations:

• Growing national debt that Millennials will have to service
• Underfunded entitlement programs threatening future benefits
• Tax structures that favor established wealth over earned income

The cumulative effect of these decisions has been to create a more challenging economic environment for Millennials, who must now grapple with the long-term consequences of choices made before many of them could vote.

7. Millennials must navigate a changing economic landscape with outdated frameworks

"Millennials have been taught from an early age to go crazy for real estate."

Outdated advice. Many traditional financial and career strategies promoted to Millennials are based on economic realities that no longer exist:

• The "college at any cost" mentality
• Emphasis on homeownership as the primary path to wealth-building
• Expectation of linear career progression within a single company or industry

New realities. Millennials must adapt to:

• Rapidly evolving job markets and skill requirements
• Alternative paths to education and skill acquisition
• New forms of asset ownership and investment (e.g., digital assets)
• More frequent career changes and continuous learning

This disconnect between inherited wisdom and current economic realities requires Millennials to be more adaptable and creative in their approach to personal finance and career development.

8. Political engagement and policy reforms are crucial for Millennials' economic future

"Millennials have an opportunity to launch a fundamental rethink about how our economy—and our society—should balance the needs of different generations."

Political potential. As Millennials become a larger share of the electorate, they have the opportunity to shape policies that address their unique economic challenges:

• Student debt reform
• Housing policy changes to increase affordability
• Labor market reforms to address gig economy issues
• Entitlement program sustainability

Generational priorities. Millennial political engagement often focuses on:

• Economic inequality and fairness
• Long-term sustainability (environmental and fiscal)
• Adapting institutions to technological change
• Work-life balance and quality of life issues

By actively participating in the political process and advocating for policies that reflect their economic realities, Millennials can work to create a more favorable economic environment for themselves and future generations.

Last updated: October 7, 2024