Young Americans richer than ever, sense ‘economic fragility’: Report

(The Hill) - Americans under the age of 40 now have more money than ever, but have a sense of “economic fragility,” a new report by the Treasury Department found.

Research released by the department Wednesday found that the median wealth for Americans 25-29 grew to more than $80,000 in 2022. It’s a more than $50,000 increase from 2010.

The report found that household balance sheets for younger Americans was stagnated for years and didn’t recover after the 2008 recession. After the COVID-19 pandemic, however, the median wealth for this age group surged by over 140 percent, “reaching higher levels than ever seen before.”

“The sharp increase in wealth between 2019 and 2022 was broadly based across education, income and racial groups,” the department found.

While wealth has increased, so has debt. Since 1989, student loan debt grew “nine-fold” due to more people attending college and tuition rates skyrocketing.

“Empirical evidence finds that student loan debt has been shown to delay household formation, lower homeownership rates, decrease enrollment in graduate programs, and discourage public service jobs,” the department said.

Compared to their parents’ generation, younger Americans today are more likely to live with their parents and are less likely to be married or have children.

The department noted some of the changes over the last 30 years measured in the research are positive, including the increase of earnings among women, while other changes have been neutral.

“Many changes have contributed to an increasing sense of economic fragility among young adults,” the department said.

Younger people and all Americans alike say they are concerned about the adverse effects of climate change and unsustainable fiscal policy impacts on retirement benefits.

The research highlighted the aging American population. Younger adults are left competing with the Baby Boomer generation, particularly for housing and higher-paying career opportunities.

The department said the government should not try to return to the economy of the 1990s, because that would “erase” many of the gains made over the last 30 years.

The government should tailor actions to “tackle the unique difficulties” that younger Americans face today, including investments in housing, childcare, health care and workforce opportunity, which the report said are all things the younger generation would feel the impacts of quickly.