From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Millennial Generation Economic Status

Description: This episode explores the economic status of Millennials
compared to older generations

Related GAO Work: GAO-20-194: Millennial Generation: Information on 
the Economic Status of Millennial Households Compared to Previous 
Generations

Released: December 2019

[ Background Music ]


[ Charlie Jeszeck: ] Millennials are fearful of the future. They feel
overwhelmed by their current financial situation.

[ Matt Oldham: ] Welcome to GAO's Watchdog Report, your source for news
and information from the US Government Accountability Office. I'm Matt
Oldham. One element of the American Dream has been the opportunity to
economically advance beyond the circumstances of one's birth. But
research and surveys show some different financial trends in the
experiences of the Millennial, Gen X and Baby Boomer generations. With
me is Charlie Jeszeck, an Education, Workforce, and Income Security
director, to talk about a GAO report reviewing the Millennial
generation's economic status, and offering a comparison with older
generations. Thanks for joining me, Charlie.

[ Charlie Jeszeck: ] Pleasure to be here.

[ Matt Oldham: ] So how are the Millennials faring economically compared
to other generations?

[ Charlie Jeszeck: ] Well first let's take a step back and look at
longer term trends in terms of economic mobility. And what we did in
this report, we looked at over 20 studies, actually culled out of over
200, looking at  economic mobility and different metrics of that. And
basically what we found - let's put it this way - no one found that
economic mobility was increasing in the United States. So in a lot of
ways things have been freezing up. And this feeds into a lot of the
survey research that we found that Millennials are fearful of the
future. They feel overwhelmed by their current financial situation. So
getting back to talking about Millennials themselves, the situation; the
positives are they're the most well-educated generation that we've ever
had. On the other hand, their incomes have been flat. They haven't been
able to take advantage of the greater levels of education because
there's been growing wage stagnation in the United States. And they have
lower levels of homeownership, and thus lower levels of home equity. 
They also have significantly greater amounts of student loan debt
compared to previous generations.

[ Matt Oldham: ] What are some of the reasons why Millennials may not be
seeing some of the increased economic opportunities that the previous
generations have.

[ Charlie Jeszeck: ] Well we don't know yet, and they may very well
begin to experience the wage premium that one gets from greater levels
of education. But right now we don't see that in the data, and you knw,
clearly student loan debt is playing a big role for Millennials. If you
look at student-loan-debt to annual-income compared to earlier
generations, Millennials, it's over a hundred percent on average,
compared to around 50% for boomers and for Gen Xers. And if you look at
the bottom quartile, the lowest 25% of Millennials that, by income,
their student-loan to income debt is almost 400%, almost four times
their income - 375%, we estimated. So these are some significant humps
to get over, and they may very well in the future be able to do that.
But right now, this is a major problem. That, and just the continued
stagnation of income that we're seeing among Millennials.

[ Background Music ]

[ Matt Oldham: ] So, it sounds like some of the key economic measures
and studies that you looked at show Millennials generally aren't doing
better than their parents, and income inequality is growing, and this
isn't necessarily different from the other generations. But we're seeing
it more distinctly with the 
Millennial generation. Did this report look at any other factors that
could inform us as the trends?

[ Charlie Jeszeck: ] Definitely there are other things. As you might
imagine, given our nation's history, race plays a really major part in
in economic mobility. African-American families experience much less
economic mobility compared to white families. And then also geographic
location plays an important role as well, that if you're from poor rural
areas, or poor inner cities, you have much lower prospects of economic
mobility than people from, you know, more affluent suburbs, higher
income areas. And I think the racial issue is particularly salient
because the Millennial generation is the most diverse generation we've
ever had in America, and so the fact that more and more Millennials -
greater percentage are people of color, this limited mobility poses a
real problem.

[ Matt Oldham: ] So Charlie last question, what's the bottom line of
this report?

[ Charlie Jeszeck: ] The American Dream continues to be under siege in
the United States. If you look at the literature, economic mobility is
freezing up. It's more and more not everyone can go up from humble
origins and become a billionaire. And this poses particular challenges
for the current generation which already feels stressed from a variety
of stagnant incomes, student loan debt, lower home ownership, and so
these are real challenges we're going to have to face up to in the
future.

[ Matt Oldham: ] Charlie Jeszeck was talking about a GAO report
reviewing the economic status of Millennial households compared to
previous generations. Thank you for your time, Charlie.

[ Charlie Jeszeck: ] My pleasure.

[ Matt Oldham: ] And thank you for listening to the Watchdog Report. To
hear more podcasts, subscribe to us on Apple podcasts. Make sure you
leave a rating and review to let others known about the work we're
doing. For more from the Congressional Watchdog, the U.S. Government
Accountability Office, visit us at gao.gov.