From the U.S. Government Accountability Office, www.gao.gov Transcript for: Millennial Generation Economic Status Description: This episode explores the economic status of Millennials compared to older generations Related GAO Work: GAO-20-194: Millennial Generation: Information on the Economic Status of Millennial Households Compared to Previous Generations Released: December 2019 [ Background Music ] [ Charlie Jeszeck: ] Millennials are fearful of the future. They feel overwhelmed by their current financial situation. [ Matt Oldham: ] Welcome to GAO's Watchdog Report, your source for news and information from the US Government Accountability Office. I'm Matt Oldham. One element of the American Dream has been the opportunity to economically advance beyond the circumstances of one's birth. But research and surveys show some different financial trends in the experiences of the Millennial, Gen X and Baby Boomer generations. With me is Charlie Jeszeck, an Education, Workforce, and Income Security director, to talk about a GAO report reviewing the Millennial generation's economic status, and offering a comparison with older generations. Thanks for joining me, Charlie. [ Charlie Jeszeck: ] Pleasure to be here. [ Matt Oldham: ] So how are the Millennials faring economically compared to other generations? [ Charlie Jeszeck: ] Well first let's take a step back and look at longer term trends in terms of economic mobility. And what we did in this report, we looked at over 20 studies, actually culled out of over 200, looking at economic mobility and different metrics of that. And basically what we found - let's put it this way - no one found that economic mobility was increasing in the United States. So in a lot of ways things have been freezing up. And this feeds into a lot of the survey research that we found that Millennials are fearful of the future. They feel overwhelmed by their current financial situation. So getting back to talking about Millennials themselves, the situation; the positives are they're the most well-educated generation that we've ever had. On the other hand, their incomes have been flat. They haven't been able to take advantage of the greater levels of education because there's been growing wage stagnation in the United States. And they have lower levels of homeownership, and thus lower levels of home equity. They also have significantly greater amounts of student loan debt compared to previous generations. [ Matt Oldham: ] What are some of the reasons why Millennials may not be seeing some of the increased economic opportunities that the previous generations have. [ Charlie Jeszeck: ] Well we don't know yet, and they may very well begin to experience the wage premium that one gets from greater levels of education. But right now we don't see that in the data, and you knw, clearly student loan debt is playing a big role for Millennials. If you look at student-loan-debt to annual-income compared to earlier generations, Millennials, it's over a hundred percent on average, compared to around 50% for boomers and for Gen Xers. And if you look at the bottom quartile, the lowest 25% of Millennials that, by income, their student-loan to income debt is almost 400%, almost four times their income - 375%, we estimated. So these are some significant humps to get over, and they may very well in the future be able to do that. But right now, this is a major problem. That, and just the continued stagnation of income that we're seeing among Millennials. [ Background Music ] [ Matt Oldham: ] So, it sounds like some of the key economic measures and studies that you looked at show Millennials generally aren't doing better than their parents, and income inequality is growing, and this isn't necessarily different from the other generations. But we're seeing it more distinctly with the Millennial generation. Did this report look at any other factors that could inform us as the trends? [ Charlie Jeszeck: ] Definitely there are other things. As you might imagine, given our nation's history, race plays a really major part in in economic mobility. African-American families experience much less economic mobility compared to white families. And then also geographic location plays an important role as well, that if you're from poor rural areas, or poor inner cities, you have much lower prospects of economic mobility than people from, you know, more affluent suburbs, higher income areas. And I think the racial issue is particularly salient because the Millennial generation is the most diverse generation we've ever had in America, and so the fact that more and more Millennials - greater percentage are people of color, this limited mobility poses a real problem. [ Matt Oldham: ] So Charlie last question, what's the bottom line of this report? [ Charlie Jeszeck: ] The American Dream continues to be under siege in the United States. If you look at the literature, economic mobility is freezing up. It's more and more not everyone can go up from humble origins and become a billionaire. And this poses particular challenges for the current generation which already feels stressed from a variety of stagnant incomes, student loan debt, lower home ownership, and so these are real challenges we're going to have to face up to in the future. [ Matt Oldham: ] Charlie Jeszeck was talking about a GAO report reviewing the economic status of Millennial households compared to previous generations. Thank you for your time, Charlie. [ Charlie Jeszeck: ] My pleasure. [ Matt Oldham: ] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple podcasts. Make sure you leave a rating and review to let others known about the work we're doing. 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