Younger Americans' Net Worth Is Down Compared to 2016

Joe Biden wasn’t the candidate of choice for young Americans in the Democratic primaries, but they overwhelmingly supported him in the general election.

Now their economic futures rest in the hands of the president-elect, who will be the oldest person ever to serve in that office when he takes over on Jan. 20. Former President Ronald Reagan, the previous record holder, was a few weeks away from his 78th birthday when he left office in 1989; Biden turns 78 on Friday.

Biden inherits responsibility for a group of Americans in their 20s and 30s who have been knocked down by the economic trends of the last couple of decades, including rising housing and health-care costs and record levels of student debt. Now the Covid-19 recession is hitting young Americans hardest, putting a disproportionate number of Millennials — and their younger siblings in Generation Z — out of work.

Young people weren’t catching up with older generations even before the pandemic, when the U.S. economy was strong. In fact, the wealth gap between the generations has steadily widened since the 1990s.

The gulf between the generations has the potential to lead to radical change in society once new generations come into power, according to Deutsche Bank AG strategists.

“When they do, all indications are that they will enact policies that not only forcibly redistribute in blunt ways, but also upend the very foundations of capitalism,” Deutsche Bank’s Jim Reid and Luke Templeman wrote in the report, “To Save Capitalism, We Must Help the Young.”

While Biden wasn’t young voters’ top choice in the Democratic primaries, he ended up winning 18-to-29-year-olds by 24 percentage points, 5 better than 2016 nominee Hillary Clinton, according to a Brookings Institution analysis of exit polls. The president-elect lost voters 45 and over. He has sought to show that he understands what younger generations are experiencing.

“For all the young people who have known only an America of rising inequity and shrinking opportunity, they deserve to experience America’s promise in full,” Biden said when he accepted the party nomination in August.

Biden has emphasized economic proposals that include cutting middle-class taxes while raising levies on the wealthy, giving more power to unions, expanding access to health insurance, and creating jobs with investments in upgrading infrastructure and fighting climate change. His ability to implement those plans may depend on whether Democrats control the U.S. Senate after two Georgia run-off elections in January.

Baby Boomers — a huge generation only surpassed in size by Millennials last year — have done very well on average. Adjusted for inflation, the median American household 55 and over has gotten richer since the end of the 1980s, according to the latest Survey of Consumer Finances, while typical households in younger age groups have gotten poorer in the last three decades.

A few young tech billionaires can’t make up for declining fortunes of Millennials and Gen Z. The average household headed by someone under 35 was worth $76,340 last year, the Fed’s survey shows, down from an inflation-adjusted $81,050 in 2016.

The long-term trends are even more troubling. Even as Americans collectively nearly doubled their net worth from 1989 to 2019, those under 35 lost 23%, or an average of $22,760, compared with the same age group 30 years ago.

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