Do you remember the scene from the movie Bridesmaids when Kristen Wiig’s character is all loopy on pills and booze on the airplane? She tries to sneak into first class and when she’s busted by the flight attendant she says to him, “Help me! I’m poor!” Well, Millennials can relate because a lot of them are making less money than previous generations.
According to a recent study by the Federal Reserve, Millennials’ spending habits are a lot like the generations that came before them, they just have less money at this point in their lives. The group born between 1981 and 1997 has fallen behind because many of them came of age during the Great Recession.
According to a Business Insider article,
Average real labor earnings for male household heads working full time were 18% and 27% higher for Gen Xers and baby boomers when they were young compared with millennials, the study found. For young women, the difference was smaller — 12% for Gen Xers and 24% for boomers — but earlier generations were still making more money when they were younger among similar demographics.
It looks like Millennials want to spend like future generations, it’s just that they don’t have the money to do so. That’s causing seismic shifts in many industries that count on the spending habits of young people.
It will be interesting to see if Millennials’ saving and spending habits change as we move further away from the financial crisis. They’re in a interesting position where college debt may be permanently restricting their ability to spend and save like previous generations – while their salaries have been suppressed by wage stagnation.