The Recession May Be Over, But You'll Still Be Poor
According to the Federal Reserve Board, the American economy has officially and fully recovered from the Great Recession that started in 2007. They're measuring that by total household wealth, which just hit $70.3 trillion. That's the first time that it has surpassed the total in the first quarter of 2007, which was $68.1 trillion, and it's also the largest increase in a quarter since 1999. Good signs, right?
Yes, for the entire economy, but not so much for the average millennial.
If you break down the data, you can see that there are actually more households today than in 2007, so in coming back to the same levels, it doesn't exactly mean we're back to where we started. In fact, the average household wealth today is $613,625, which is 11% below the average household wealth in 2007, and that's not accounting for inflation.
Wait a minute, you might think, my household wealth is nowhere near $600,000. And that's brings us to the second point of importance here. While the average household wealth increasing might sound like it means everyone is doing better, the reality is that the rich are getting richer — and the poor aren't getting much at all. If you look at the median household wealth instead of the average, you can see a trend over time: In the 1990s, median net household wealth was one-quarter of the average. The 2000s saw it decrease to a fifth of the average, and in 2010, it fell even more to a sixth of the average, which is where it remains today.
And that's not all the bad news.
During the recession, certain groups, like younger households or ones headed by millennials, suffered more than others, which means that these groups have to work harder to get back on track. So while everyone is still playing catch-up, if you look at numbers by their age groups, you see a huge difference in how much recovery has really happened. Older households are only 3% below average, and middle-aged households are 10% under. But the youngest households are a full 40% below their 2007 average, during a time when student debt and other expenses for millennials are still skyrocketing.
So the next time another older person complains about how millennials are ruining the economy because we're all lazy and entitled, ask them to stand in your shoes for a second and see exactly how far that entitlement gets them.