Robert Reich Video

Baby Boomer Explains Why Millennials Don’t Have Money

Finally! A Baby Boomer who deeply understands why millennials are so broke.

Robert Reich plainly laid out why millennials have much less money than previous generations. Reich points out that millennials aren’t pesky teenagers anymore and, in fact, they haven’t been for some time. Millennials are now well into their careers and starting homes, but they still can’t buy a home or save for retirement.

So, how does this Baby Boomer know so much about millennial finances? Well, for one, Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. However, you may recognize him as Secretary of Labor during the Clinton administration.

In his post, Reich identifies four reasons why millennials are worse off financially than their parents.

1. Stagnant wages

Wages between the mid-1980s and the mid-1990s grew three times the amount of wages between 2007 and 2017.

2. Cost of living has increased

Housing and education rates have soared while wages continue to be stagnant.

3. Debt

Higher education costs have tripled since 1978 and combined with stagnant wages, millennials are averaging $28,000 in student loans and $5,000 in credit card debt. Altogether, millennials are more than one trillion dollars in debt.

4. Hard to save for the future

Fewer employers are offering pension plans and most millennials have less than $1,000 in savings, meaning millennials will not be able to retire until they reach 75, or ever. In his post, Reich points out that
among Fortune 500 companies, only 81 sponsored a pension plan in 2017. That’s 288 fewer employers than it was 20 years ago.

Reich wraps up his post with a call for better policies: “If we don’t start trying to reduce this generational wealth gap — through policies like debt relief, accessible health insurance, paid family leave, affordable housing, and a more equitable tax code for renters — millions of young Americans will struggle to find financial security for the rest of their lives.”

Just a reminder there’s an election happening in a few months.