Another week, another piece of bleak economic journalism telling millennials they're doomed to a future of living hand to mouth as a result of factors beyond their control – and this time they're not buying it.
An article published on the US political website Politico says the current generation of 25-to-35-year-olds should be "willing and able to work longer than their parents and grandparents did" if they want to enjoy the same economic security in retirement.
Analysis: Millennials should be willing and able to work longer than their parents and grandparents did https://t.co/NiWsxQY7SW
— POLITICO (@politico) June 7, 2018
The article, by Alicia Munnell, director of the Centre for Retirement Research at Boston College in the US, runs through the myriad economic circumstances negatively impacting on millennials' finances, which will continue to blight their lives well into the future, including affecting their level of financial security in old age.
"Concern about the financial health of America’s younger generations is growing—especially millennials, a demographic boom that came of age in an environment of unstable work and record levels of student debt," Munnell writes. "Experts worry that millennials are falling so far behind previous generations that their retirement may be at risk."
According to her own research, "those concerns are real, and millennials really are building wealth more slowly than the other working generations". But – she adds in the article, as if to throw young people a bone – "they are not insurmountable—as long as millennials are willing and able to work longer than their parents and grandparents did."
Unsurprisingly, people on Twitter weren't buying the analysis that the only way to improve millennials' financial health is by compelling them to work for longer than their parents and grandparents did.
analysis: No.
— mattpotato (@mattpotato) June 7, 2018
Here’s some analysis: millennials are the most educated, yet worst paid generation since 1980. The issue is not millennials — the issue is an economy in which stagnant wages and enormous student debt are being sold as a cruel new normal. It is not normal, and we must change it. https://t.co/z1wGZrQH6K
— Our Revolution (@OurRevolution) June 7, 2018
Thanks to wealth consolidation, there are too few of them to go around.
— Megan (@ScrambledMeggs) June 8, 2018
So let me get this straight, we’ve gone from a single income affording a home, family & transportation to an entire family working & still not being able to afford the bills all while forcing single family homes back into multigenerational homes & now we should work more? 🖕🏼
— Corporations ain’t people, my friend. (@MmmBob) June 7, 2018
This article suggests retiring at 70. That's roughly the life expectancy of your average black male. Statistically, the advice for me is to work until I die.
— Black Palpatine (@legoremix) June 7, 2018
Great.
I'm willing to bet a Boomer wrote this...
— Alex Cunningham🌈🌹 (@A1exCunningham) June 7, 2018
"everyone should change the way they're doing everything except for the idle rich"
— mike (@MikeOdenthal) June 7, 2018
Analysis: Corporations and the wealthy have hoarded the benefits of productivity gains for the last 3 decades so now Millennials should go fuck themselves and work until they die.
— Mike Selhorn (@selhorn) June 7, 2018
Many people suggested some alternative ways to solve the crisis for millennials – some more radical than others.
We live in an era of unparalleled automation for some reason combined with crazy redundancies (i.e. bullshit work). There is no need for millennials to work more. We should be working less. What needs to stop is the redistribution of wealth towards the already rich.
— jenesaiswha (@jenesaiswha) June 7, 2018
Why do economists always avoid the question of taxing the wealthy more? Why? Is it because it too "simple" for their serious academic paper. So they wan't to be complex just for the sake of complexity?
— Imagine being a neoliberal lmaoooooo (@slaveikov) June 7, 2018
Imagine the economic stimulus of the gov’t wiping out all student loan debt? It would cost approximately 2 times the annual defense spending, but then all that money would be injected into the economy in the form of consumer liquidity. How about a bailout for the people for once?
— Tim Giles (@TimGiles01) June 7, 2018
Analysis: #Millennials should overthrow the existing economic order & remove all incumbent policy-makers because they have flagrantly failed at their job of making the economy work for all but the rich. https://t.co/y9ndvyErhl
— Marshall Steinbaum 🔥 (@Econ_Marshall) June 7, 2018
The reason for millennials' poor retirement prospects, Munnell argues, is threefold: first, their "limited access to retirement plans at work", meaning they'll struggle to save for retirement as research shows people find it difficult to save on their own; second, the fact they're less likely to be homeowners, "and home equity is a valuable retirement asset"; and third, student debt means it's more difficult for them to put money into their retirement plans.
"The wealth-to-income ratio for millennials is not only below that for Gen Xers and late Baby Boomers now, it is also projected to remain lower through their lifespans," she writes, adding that "millennials’ lack of wealth in their 30s relative to earlier cohorts should be a source of great concern, given that they will live longer than previous cohorts and will face higher health care costs." Plus, they'll also likely have to wait longer to receive state social security.
The situation for millennials in the UK is similar. The national state pension age is set to rise to 68, from the current 65 for men and 60 for women, by 2037 and there's a high likelihood that it could rise further in the future. Not only this, but a worrying proportion of British millennials currently have no pension provision in place.
According to a survey by YouGov last year, 44% of 18-34-year-olds have no pension provision whatsoever, compared to around a fifth of 35-54s (22%) and over-55s (20%). Millennials also know the least about pensions, with over a quarter (27%) saying they don't understand them in general, and even 14% of those with a pension not knowing what type it is.
With an ageing population putting a strain on the state pension (more older people means the government needs to pay out more), and many young people unable to pay into their own pensions, retirement doesn't look rosy for millennials.
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