Are Younger Americans Wealthier Than We Think?

Absolutely, according to a recent analysis.  Wait! What?  

For the past two years, I have written about younger Americans, especially millennials, struggling to put food on the table and blaming Baby Boomers, politics, and the wealth gap for their ill-fated attempts to accumulate cash and rope in the American Dream.

Their notable doom and gloom are front and center on social media, especially TikTok, where we find endless streams of struggling workers and families with often tearful cries for help.

But then, like a blast of cold water in the face, a recent article (April 24th, 2024) from the Center for American Progress.org (CAP) entitled: Wealth of Younger Americans Is Historically High shocked me upright and spilled my coffee!

According to CAPs research Americans under 40 aren’t suffering at all! These upstarts, they say, have increased their net worth since the pandemic by $85,000 to $259,000 from 2019-2023. What? Yes. Read the article: “Due to a historic economic recovery, inflation-adjusted wealth for younger Americans has grown 49 percent since right before the pandemic—a positive trend following decades of stagnation.”

Are you kidding me? 

How can this be right? Of all the reports of younger Americans infuriated about the high cost of living, what are we to believe?  

I contacted the authors, and they are sticking with it. They cite evidence from the US Federal Reserve:  Distribution of Household Wealth in the U.S. since 1989 as the source. That shows an increase in wealth by age cohort, and when I reviewed it… there it was!

In macro figures, the data denotes the wealth distribution by age group in America has grown in each class from the bottom 50% to the top .01% and shows that the accumulated wealth for all Americans increased post-Covid, particularly after the US government injected billions into the economy during Covid.

Moreover, they argue that given all the capital injected into the US economy and the appreciation of asset values post-pandemic, younger Americans benefited the most (up 49%), with the majority of the $85,000 net wealth increase coming from these categories since 2019:

• Homeownership values increased: $22,000 (yes, under 40 own homes!)
• Bank deposits increased: $9,000 (Covid relief plus higher wage jobs)
• Stock & mutual fund values increased: $31,000 (S&P markets have gone up a lot!)
• Single-owner business values increased: $10,000
• Consumer big-ticket durables (cars, appliances, etc): $7,000
• Decrease in consumer debts: $5,000

And while I might be living on another planet, which often feels the case, I think our economy since Covid has bifurcated into the top 50% vs the bottom 50%. And the bottom half is losing!

Take, for example, the increase in credit card delinquencies, the high costs of mortgage interest/rates, or the skyrocketing rents and the stubbornly high rates we see in insurance, food, and gas prices, all conspicuously evident in inflation reports and from hundreds of online social media posts and news articles looking at the same younger Americans the CAP and the Fed say are richer! So, which half are they measuring?

Amiee Picchi posted an article last September for CBS News citing the US Census, which notes that 4 of 10 workers have been struggling to pay bills despite higher wages since 2020. She writes, “Although pay increases are staying ahead of inflation this year, low- and middle-wage workers have generally not kept up with the cost of living over the prior four decades.”

So. Who is the government measuring here — Younger workers who own homes and businesses and have stock portfolios? Maybe in Washington, but not in California. I don’t buy it.

The real wealthy Americans also got richer since 2019, a lot richer. But that’s not the point. Other stats show the gap between rich and poor is wider than ever. And despite the growth in younger Americans’ net wealth, according to the data, the CAP article insensitively misses the key point entirely!

With the coming election, a lot is at stake. If we are ever to get back on a healthier footing and narrow the wealth gap, we need to start by understanding who the bottom 50% are, how to identify the data, and how to write reports that reflect their reality on the ground.

Issuing reports that imply younger working Americans shouldn’t complain because they’re richer than before COVID-19 is asinine to me (pardon my French).

So, what’s the takeaway here? You tell me. Is the government blind to the obvious?

Are you seeing younger working Americans under 40 growing richer since COVID-19? Or are you seeing them struggle like never before under the weight of a disproportional achievement system, as I see it?

What’s your view?

Written by Rick Andrade.
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