Millennials Didn’t Kill the Economy. The Economy Killed Millennials.

The American system has thrown them into debt, depressed their wages, kept them from buying homes—and then blamed them for everything.

A Millennial shops at a used-clothing store.
A Millennial shops at a used-clothing store. (Robert Galbraith / Reuters)

When a staid American institution is declared dead, the news media like to haul the same usual suspect before the court of public opinion: the Millennial generation.

The 80 million–plus people born in the United States between the early 1980s and the late 1990s stand accused of assassinating various hallmarks of modern life. The list of the deceased includes golf, department stores, the McDonald’s McWrap, and canned tuna. Millennials tore up napkins, threw out mayonnaise, and mercifully disposed of divorce and Applebee’s before graduating to somewhat postmodern crimes: “Have Millennials Killed Serendipity?” With the national murder rate in long-term decline, it may even be said that Millennials are killing killing.

But according to a new report by economists at the Federal Reserve, this genre of news analysis is pure fiction.

When researchers compared the spending habits of Millennials with those of young people from past years, such as the Baby Boomers and Gen Xers, they concluded that “Millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations.” They also found that “Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth.”

Millennials aren’t doing in the economy. It’s the economy that’s doing in Millennials.

My history with the accused goes back several years.

In 2012, I published a column in The Atlantic with Jordan Weissmann, now a writer at Slate, called “The Cheapest Generation.” That headline—which got us in trouble because it was the only thing most people read—was a bit of a misdirection. The deeper question of the piece was whether the Great Recession might permanently reduce young people’s taste for houses and cars—two of the most vital engines of the economy.

For years, various outlets, including The Washington Post and the Pew Research Center, continued reporting that young people were buying fewer cars and houses than those in previous generations at a similar point in their life. In 2016, about 34 percent of Americans under 35 owned a house; when Boomers and Gen Xers were under 35, about half of them did.

But the fact that young people are buying fewer houses and cars doesn’t prove that they want fewer houses and cars. It might mean they simply can’t afford them. That latter conclusion is now supported by research from the Federal Reserve.

Fed economists found that the depressed rate of homeownership among Millennials was entirely about income and affordability. Young Boomers and young Gen Xers made significantly more money at a similar point in their life cycle, they said, and controlling for income and employment wiped out all generational differences.

Just as important, homes in the United States are less affordable than they used to be. According to the Joint Center for Housing Studies of Harvard University, the typical sale price of an existing single-family home in 2017 was 4.2 times greater than the median household income; that’s 30 percent higher than in 1988. It’s even worse in some cities. Since the late 1980s, price-to-income ratios have more than doubled in metro areas such as Miami, Denver, and Seattle. In San Francisco, the median house price doubled in just five years to more than $1.6 million. That’s a lot of foregone avocado toast.

On the car front: News reports sometimes find that the average age of new-car buyers is quickly rising, which makes it sound like young people are ditching their ride. But as the Fed economist Christopher Kurz has shown in several studies, that factoid is somewhat misleading. Young people actually buy the same number of cars per capita today that they did in 2005, at the height of the housing bubble. The average age of car buying is going up almost entirely because Americans older than 55 are buying more new vehicles than they were 20 years ago. In 1995, Americans over 55 bought about one-third of all new cars. Today they’re buying almost two-thirds.

It’s also true that Millennials spend less than previous generations on transportation. But everybody is spending less; total transportation spending has declined as a share of the typical household’s budget by almost 5 percent in the past 30 years, according to the Fed. Perhaps that’s because people hold on to their car for longer, or own a more efficient car that requires fewer tune-ups. Or maybe that’s a result of the declining cost of new vehicles under the North American Free Trade Agreement, which shifted some auto-manufacturing work to Mexico.

The economists ultimately found “no evidence that Millennials have preferences for vehicle purchases that are lower than those of earlier generations.” Case closed.

It’s typical for Millennials to bear blame for dramatic cultural and economic changes when their only crime is behaving like everybody else. For example, last year The Wall Street Journal published a report that cited young people for killing grocery stores. The proof? Consumers ages 25 to 34 are spending less at traditional grocers than their parents’ generation did in 1990. Seems pretty damning. But upon closer examination, the stagnation of grocery stores is a complex story that implicates just about everybody. Americans of all ages are relying more on convenience stores, such as CVS, and superstores, such as Walmart, for food to eat at home, and those institutions aren’t typically counted as grocers in government data. Also, Americans of all ages are eating out at restaurants more. The group shifting its spending toward restaurants the fastest? It’s not 20-somethings. It’s people over 65.

In the biggest picture—from cars and houses to restaurants and grocers—Millennials aren’t serial killers. They’re serial scapegoats.

If there is one category in which the generation born between the early 1980s and the late 1990s really is different, it’s politics.

Young people are not only to the left of the country, but also to the left of previous generations of young people. In national elections, Millennials have voted for Democrats over Republicans by unprecedented margins. They are far more open to various strands of socialism—including social democracy and democratic socialism. As I wrote in summarizing their political views in 2016, Millennials “sense that they are both America’s impoverished generation and its moral guardians—absent on the payroll, but present at the revolution.”

Why would young people feel such revolutionary fervor? Maybe it’s not because Millennials have rejected the American dream, but rather because the economy has not only blocked their path to attaining it but punished them for trying to.

Millennials are the most educated generation in U.S. history to date. They bought into a social contract that said: Everything will work out, if first you go to college. But as the cost of college increased, millions of young people took on student loans to complete their degree. Graduates under 35 are almost 50 percent more likely than members of Gen X to have student loans, and their median balance is about 40 percent higher than that of the previous generation.

And what has all that debt gotten them? “Lower earnings, fewer assets, and less wealth,” according to the Federal Reserve paper’s conclusion. Student debt has made it harder for millions of young people to buy a home, since “holding debt is associated with a lower rate of homeownership, irrespective of degree type,” as Fed economists wrote in a previous study. In other words, young people took on debt to pursue a college degree, only to discover that the cost of college would push the American dream further from their grasp.

Is it any wonder that Millennials are eager to overthrow a system that has duped them into a story of permanent progress, thrown them into debt, depressed their wages, separated them from the trappings of adulthood, and then, for good measure, blamed them for ruining canned tuna?

When the 20th-century sociologist James Chowning Davies studied the political convulsions of France and 20th-century Russia, he observed that the conditions for revolution are ripest “when a prolonged period of economic and social development is followed by a short period of sharp reversal.” These revolutions occurred, he said, when a large group of people felt that reality had suddenly fallen short of their expectations for social or economic development.

Millennials were promised rising wages, homes, and cars; they got 140 characters. Okay, fine, 280 characters. That’s nothing to live on. But it’s just enough to efficiently articulate one’s despondency alongside 80 million frustrated peers, all of whom are exasperated with a system that keeps finding new ways to brand its young economic victims as cultural criminals.