From chain restaurants to credit cards, millennials have been accused of killing almost every industry. But according to new data from the Federal Reserve, it’s not their spending habits that are to blame—it’s the fact that they’re poor. In a study published in November, the Fed reveals that millennials have less money than previous generations did at the same age.
Compared to Generation X, baby boomers, the silent generation, and the greatest generation, millennials (anyone who is now between 21 and 35 years old) have “lower earnings, fewer assets and less wealth.” The study shows that along with higher student debt burdens, millennials are also making 20 percent less than their parents did and have a net worth that’s about 40 percent lower than that of Gen X.
“It primarily is the differences in average age and the differences in average income that explain a large and important portion of the consumption wedge between millennials and other cohorts,” explains authors Christopher Kurz, Geng Li, and Daniel J. Vine. They added that surprisingly, the consumption and purchasing preferences of millennials is almost comparable to that of earlier generations.
One area where the younger generation is spending more, however, is housing. While the Fed is unsure whether that’s because more and more millennials are becoming parents or because the costs of owning and renting is going up, the agency emphasized that its the generation’s lack of funds that’s causing them to tighten their wallets—and “kill” so many industries.
But the researchers aren’t giving up on millennials just yet, despite the depressing findings. “Because millennials are still quite young as of this writing, it remains to be seen whether having reached adulthood during those unfavorable years will have permanent effects on their tastes and preferences,” they noted.