This one key measure could explain why young white Americans feel left behind

ByJames Dennin

Despite the many surprises from last year's election, at least one insider prediction held true: Younger voters broke heavily for Democratic nominee Hillary Clinton. 

But they didn't break quite as hard as expected. 

Some groups of young people in some areas — for instance Iowans aged 25 to 29 — defied expectations and leaned strongly toward President-elect Donald Trump, according to an analysis of exit polls in the Atlantic.

It has been widely reported that working class white Americans were moved to vote for Trump in part because of his economic promises and "Make America Great Again" message — which affirmed the belief that at least certain groups have fallen behind economically.

Now a new study suggests that that belief may have some truth to it — at least according to one measure.

The report from Young Invincibles, a millennial-focused policy research group, sheds light on the way economic empowerment among young people has had big, uneven losses in recent decades — particularly along racial lines.

Published Friday and based on the Federal Reserve's Survey of Consumer Finances, the report found that across races Americans aged 25 to 34 in 2013 had only half the median net wealth of those in the same age band in 1989.

"Folks do feel like they've been left behind, and this report reinforces their suspicions," said Tom Allison, the study's lead author. "There is a certain validity to that economic anxiety."

Notably, the biggest declines in wealth hit white young adults, who saw their median net wealth decline 64% from roughly $44,000 to roughly $16,000. In contrast, wealth fell 32% for young African-American adults, and actually rose 140% for young Latino adults.

Of course, looking at the percent change of wealth is a very narrow way to observe the data: Even though young Latino adults saw large percentage gains, their median net wealth rose to only $8,690 — little more than half of their white counterparts' $16,000.

"When you look at percentage change, it looks like young Latinos are making a lot of ground," Allison said in a phone interview with Mic. "But of course with percentage change, it depends a lot where you started."

"While it's encouraging to see some of that," he said, "we're very disturbed by the decline in net wealth for young African-Americans."

Indeed, median wealth for young African-American adults now stands at a jaw-dropping $1,600: aka a tenth of young white adults' assets.

Evan Vucci/AP

While previous reports have noted young people are earning less income than their parents in the same age — this is the first report of its kind to look at net wealth, meaning all of a person's assets minus liabilities. 

Once you factor in debt, Allison noted, the situation gets even more dire. 

A major explanation for all of the declines, Allison said, has to do with educational attainment. Getting a degree has become far more crucial to achieving financial security, but student debt is eating up too much of young people's earnings for them to get much of a return on their investment.

Allison noted this has ripple effects: The more student debt a person has, the less they're putting aside for retirement or a down payment for a house. 

These trends could actually get worse, Allison said, since the gap between educational attainment for white and black Americans appears to be getting worse, not better, according to a separate report from the same group. 

As for how to fix the underlying problems? Young Invincibles has a wealth of policy proposals Allison thinks could have bi-partisan appeal, even under President-elect Donald Trump. 

Besides expanding education and vocational training, Allison said expanding the earned income tax credit is one of those rare positions that's supported by both Speaker of the House Paul Ryan and President Barack Obama. 

Transforming the mortgage interest tax deduction into a credit would also make it easier for lower-income folks to buy homes, which Allison noted is one of the easiest ways for those groups to create wealth.

Sign up for The Payoff — your weekly crash course on how to live your best financial life.