Millennials are often chastised for eschewing saving in favor of fancy "avocado toast" brunches and travel. What's the real deal?
Let’s face it, the Boomer versus Millennial debate is one the media has beaten to death. Namely because the contrast between suit-wearing, old-school Americana Boomer values versus Supreme gear, Avo toast obsessed millennial freelancers are simply too easy for the media to resist. The comical story writes itself. But what of Gen X? Typically defined as those born between 1965 and 1980, though some stretch this to 1984. The generation preceding the notorious Millennials is one that is somewhat overlooked but which can teach us a lot. Early Gen Xers tend to have a lot more in common with “Late Boomers,” than with those born after 1970, and for the sake of this post, we’ll assume we’re referring more to that cohort than to those who seem (and probably look) a lot more like the Boomers who, incidentally, are typically Millennials’ parents.
The “forgotten” Generation X
The New York Times ran an article several months ago titled “Actually, Gen X Did Sell Out, Invent All Things Millennial, and Cause Everything Else That’s Great and Awful.” Extreme title notwithstanding, the idea of this article is that the “situation” inherited by Millennials, many of whom finished or were in school around the financial crash of 2009 and subsequent major economic shifts it created, were caused just as much by Gen Xers as it was the Boomers to whom all bad things seem to be attributed these days. (Editor’s note: see the number of articles attributing just about all of our issues, from environmental to political, blamed on the Boomer generation!)
The Millennial - Gen X Rift
But it’s always a bit more nuanced than the attention-grabbing headlines make things out to be. While many associate Millennials with the era of high housing costs, “gig” economy work versus stable, guaranteed work, and a higher cost of living in American urban areas than ever before, Gen X didn’t exactly have the easiest situation. Gen X also lived through recessions, and they didn’t grow up with the access to, well, just about everything that millennials have at their fingertips.
There’s a perception among many Gen Xers that millennials have it all good. While the latter may choose to be a self starter who works from their own home or, if fortunate enough, from co-working spaces in tropical remote locations, the majority of the former entered the job force before “startup casual” was really a thing (note that Gen X WAS the generation who spearheaded this in Silicon Valley, but it took awhile for the casual professional, We Workesque environment to become mainstream). And it’s true, millennials can browse the housing market from the comfort of their own homes via computer or from your pocket (hello smartphones). This seems seamless and way more advanced than what Gen Xers had to deal/work with, does it not? Gen Xers and Boomers alike tend to look down on Millennials perceived lack of a long term savings plan coupled with excessive brunch plans and oat milk triple latte. (Not to mention complaining they can’t afford a house whilst consuming said brunch and lattes.) Which is truer? The answers are murky, but putting aside assumptions and intergenerational stigma, it’s worth a look at the numbers.
Women Lie, Men Lie… Numbers Don’t Lie! - Jay-Z
While, yes, it is easier for Millennials to access the market on a bunch of apps (Street Easy, Zillow, and more now have mobile friendly apps where you can save the houses you want to look at and immediately message a realtor in real-time), the question is, can they afford what they have access to?
Statistically, the cost of living in America simply was much lower for Generation X when they were in their formative career years.The price of basic goods has risen significantly, putting a strain on Millennials, despite the appearance that they’ve surrendered to the brunch gods, or whatever new fake need the media has decided to call them out on this week. The fact is, millennials and Gen X faced very different situations. The recessions that affected Gen X were mild compared to the big one faced by Millennials, the latter setting off a complete change in the way companies care for and provide for their workers. The gig economy, aka 10-99/contract work without the promise of benefits, continues to be on the rise, and we won’t even dive down the rabbithole of what millennials are being told about their potential (lack of) social security benefits.
According to The New York Times, “by the time the ’90s recession ended, in March of 1991, the oldest Gen Xers were barely 26. The youngest were in middle school. And the post-recession economy that followed was closer to the Roaring ’20s than the Depression ’30s, marked by the longest running economic expansion in the nation’s history. Gen X had it good.”
There’s a f’ing take!
But How Does that Actually Translate to The Housing Market?
As I write this now in 2020, it may be worth considering that millennials and Gen Xers have more in common in regards to purchasing power than we think. If you’re reading this, you likely know how from early to mid 2000s it was relatively easy to get a home loan, banks gave them out like candy. Thie ended up being a massive issue when the economy tanked a few years later. And yet, the purchase power that Gen X had in their 20s is comparable to what Millennials have at their fingertips right now with mortgage rates being historically low. Both generations faced different barriers to home-buying entry, and my take is that, perhaps, they’re not so different after all when you weigh both sides. Firstly, this argument really depends on where you’re located in the country. In America’s urban areas, the cost of homes has risen drastically. In San Francisco, for example, the cost of housing between 1999 and 2019 quadrupled, forcing many middle class folks out of the city.
The largest issue faced by millennials and perhaps the one that Gen X and Boomers use to look down their noses at them, is their lack of savings. More factors contribute to this than I can write about in one post, but the aforementioned increase in the cost of living, coupled with the changes in the job market have affected many. The majority of millennials would rather spend their money on a trip to Tulum than save. But exceptions exist, and a recent study found that millennials are better at saving than they’re given credit for. Compared to the golden era of corporate America, many millennials work at companies where young people wind up in positions of power, or choose to be their own bosses. It appears they may finally be seeing dividends from these choices, many of which were perhaps not choices at all, given the job market they inherited. Perhaps the generation just needed a moment to catch up…