Gen X and Gen Y are poorer than their predecessors and are having a hard time accumulating wealth, a new study finds.
How's that American Dream holding up for today's 30-something generation? Turns out, not so good.
A study by the Washington, D.C.-based think tank Urban Institute on "wealth building among young Americans" shows that the net worth of Gen X and Gen Y — those 46 and younger — is lower than their parents at that age because the traditional means of building wealth are disappearing.
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In fact, it's down 21 percent from what 30-somethings enjoyed in 1983. College debt as well as falling rates of home ownership have often been cited as factors for this decline.
The Federal Reserve Bank of New York recently reported that college debt has tripled in the last decade.
The study — which labels current 30-somethings as "the Lost Generation" — says that even after the recent recession, 65- to 73-year-olds today "have far greater wealth than 65- to 73-year-olds did in 1983."
Younger groups, however, aren't doing as well.
According to the study, the total net worth of those 46 and younger "stayed about the same as their predecessors more than a quarter-century earlier." On the other hand, the net worth of baby boomers and older generations — 47 years and older — roughly doubled as compared with their predecessors.
"Despite the Great Recession and slow recovery, the American dream of working hard, saving more, and becoming wealthier than one's parents holds true for many," the study says. "Unless you're under 40."
Typically, children get wealthier than their parents as society prospers, the study found, but that's not the case here.
"Stagnant wages, diminishing job opportunities, and lost home values may be painting a vastly different future for Gen X and Gen Y," the study says.
According to the study, although the federal government spends hundreds of billions of dollars to "support long-time asset development," these funds do not seem to be reaching the people who need the most help.
"If current trends for younger generations are not reversed, within a few decades they may become more dependent than older Americans today, especially in retirement, upon safety net programs less capable of providing basic support," the study cautions.
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