YOUNG, BLACK, AND BROKE: WHEN IT COMES TO WEALTH ACCUMULATION, BLACK MILLENNIALS ARE LOSING GROUND

There’s all kinds of narratives about Millennials. They’re super tech savvy. They’re selfish. They’re lazy. Entitled, disloyal, footloose, and fancy free.

They’re less loaded down by tradition, prone to seek cooperative arrangements, relentlessly anti-hierarchical and, unlike their parents and grandparents, thoroughly non racist and highly tolerant of differences.

Not surprisingly, though, narratives that portray any group as monolithic are both simple and unable to withstand sustained and critical scrutiny. We know that it’s often the case that variations within a group are just as—if not more so— volatile as variations between groups. Peering within a group, be they millennials, boomers, or whatever, inevitably reveals a much more nuanced reality than that proffered by the pushers of monolithic myths.

With regard to Millennials, for instance, there’s incontrovertible evidence of the existence of a wide and persistent racial wealth gap and, furthermore, the data is clear on this: When it comes to wealth accumulation, the oldest Black millennials—those born in the 1980s— are actually falling further behind the levels of wealth held by earlier generations at similar ages.

HOLDING THE SHORT END OF THE STICK

A recent study by economists at the Federal Reserve Bank of St. Louis examines the amount of wealth accumulated by older millennials—those born in the 1980s—between 2007 and 2019.

First off, the researchers’ findings blow apart the myth that millenials are a monolithic group. When it comes to wealth—the monetary value of what’s owned minus the monetary value of what’s owed—Black millennials definitely hold the short end of the stick: By 2019, older White millennials had accumulated a net worth of almost $90,000 ($88,000). Blacks and Hispanics, on the other hand, had levels of wealth that amounted to $5,000 and $22,000, respectively.

You heard that right.

Hispanic millennials have quarter of the net worth held by Whites. That’s a short stick.

But the end of the stick held by Black millennials is especially miniscule: Older Black millennials got less than 6 cents for every dollar of wealth held by their White counterparts.

A SETBACK WITHOUT A COMEBACK

One of the things the Fed researchers did was to generate estimates of how much wealth you’d expect each of these groups to hold, based on the net worth of held by previous generations at a comparable age. Comparing the actual with the predicted or expected net worth allows one to determine—at least when it comes to wealth—whether older millennials are doing the same, better, or worse than comparably aged generations that preceded them.

More specifically, this research enables us to get a grip on how well, in terms of wealth accumulation, older Black millennials are doing relative to earlier generations of Blacks of comparable age. Compared to the wealth of earlier generations of Black folk, are millennials gaining, losing, or standing still? The research allows the same question to be asked, and answered, for Whites and Hispanics.

Here’s what the Fed researchers find:

• Between 2007 and 2019, the wealth of White and Hispanic older millennials to climb back toward what you’d expect it to be, given the net worth held by the White and Hispanic generations that preceded them. In 2007, White millennial wealth was 59% lower than the researchers expected or predicted. The comparable number for Hispanics was 51%. By 2019, though, the story had changed, and did so big time: The respective net worth of White and Hispanic millennials is now just 5% and 10% lower than their expected levels. While the Great Recession of 2007-2009 wiped out a big chunk of their wealth, they’ve regained a lot of the ground they had lost.

• Compared to earlier generations of similarly aged Black folk, the amount of ground lost by today’s Black millennials—at least when judged by net worth— is nothing short of astounding. Between 2007 and 2019, Black millennials went from being 18% to a staggeringly high 52% below what you’d expect given the net worth of previous generations of young Black folk. Unlike the White and Hispanic millennials surveyed in the study, today’s Black millennials have yet to recover from the wealth wipe-out spawned by the Great Recession of 2007-2009. In fact, they continued losing ground relative to wealth held by previous generations.

What’s more, it’s important to bear in mind that the data presented above refer to median levels of wealth— that is, the cutoff point where half earn more than the cited figure and half earn less.

Think about what that means.

You can do that by, for instance, recalling the figures cited for the levels of wealth held by older White, Hispanic, and Black millennials.

Those numbers, just in case you forgot, are $90,000, $22,000, and $5,000, respectively. Because these figures are at the median, the story is that half of older White millennials have a wealth above $90,000, with the other half having less than that. Half of older Hispanic millennials have a net worth above $22,000, with the other half’s net worth being less than that.

And—get ready for this— half of Black millennials have a net worth that exceeds 5 grand but the other half’s wealth is less than $5,000.

And then there’s also this to remember: It’s possible for some of that lower fifty percent to have a negative or even zero net worth. Some of the older millennials whose wealth is below the group’s median ($90,000, $22,000 and $5,000 for White, Hispanic and Black millennials, respectively) may actually be so low that they ain’t got no wealth or, even worst, the monetary value of what they owe may actually exceed the monetary value of what they own.

In fact, research by Fenaba Addo and Yiling Zhang finds that three out of every ten older Black millennials have either zero or negative net worth. When it comes to wealth, 30% of Black millennials don’t have a pot to—you know how the rest of that sentence goes.

That same research documents that Black millennials are 1.7 times as likely as their White and Hispanic counterparts to have either zero or negative net worth.

WRAPPING UP

All of this underscores an important but often overlooked reality: Narratives portraying millennials as monolithic are absolutely absurd and wither away with the quickness when subjected to the least bit of heat released by an examination of the data.

The bottom line is that the experiences of millennials vary by race and ethnicity. There’s other evidence not discussed in this blog that makes it unambiguously clear that the experiences of millennials also vary by class and gender (I’ll discuss this in an upcoming post).

So, make no mistake about it. When it comes to wealth, older Black millennials have been on a downward trajectory. Not only have they been losing ground relative to other groups, but they’re also falling further behind the level of wealth you’d expect them to possess, given the net worth of previous generations of African Americans.

Young, Black, and asset poor. Not exactly a recipe for economic security.

We need to talk, fam!