The typical millennial prefers a walkable neighborhood to a McMansion; a sustainable environment to a shiny new car; a lifetime of experiences to a cornucopia of consumer goods. She is an anti-materialist urbanite who’s too “woke” for the American nightmare of a single-family suburban home, fully stocked two-car garage, and steadily appreciating 401k.
Or at least, this was the picture of Generation Y that emerged from a thousand think pieces over the past decade, each framed around some defining feature of middle-class American life that millennials had just put to death. And yet, to the extent that these narratives were grounded in verifiable facts, they hinged on highly dubious extrapolations from consumer data: Millennials aren’t accruing as many cars, houses, and savings accounts as their forebears — ergo, they’re a generation of post-consumerist bohemians.
Some millennials proffered a competing theory: Maybe Generation Y was just broke.
And now, economists from the Federal Reserve have proven the latter camp right. In a report succinctly titled “Are Millennials Different?” the central bank reports that the answer to that query is, “yes and no.”
“Millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations,” but they “are less well-off than members of earlier generations [were] when they were young, with lower earnings, fewer assets, and less wealth” — and this, the expert economists explain, causes millennials to buy less stuff.
More specifically, millennials had the misfortune of entering the labor market in an economic era defined by stagnant working-class wages, rising higher education costs, a crisis of housing affordability, and, of course, a Great Recession followed by a historically lackluster recovery.
All of this has depressed rates of homeownership among millennials, relative to Generation X and the Boomers. And it has almost certainly led the younger generation to purchase fewer cars than it would have, were it as financially secure as its predecessors. That said, the Fed report suggests that millenials’ car-lessness has been greatly exaggerated. Previously, commentators had observed that the age of the average car-buyer was rapidly rising — while millennials were spending far less on transportation than previous generations had at their age — and concluded that Gen Y was buying very few cars. In reality, the former stat simply reflects the fact that wealthy, aging boomers are buying way more cars than older Americans used to; young Americans, meanwhile, are buying cars at roughly the same rate that they did in 2005. And although millennials are spending less on transportation, so is everyone else in the U.S. — perhaps because cars are built a bit better than they used to be, and/or because the costs of building them have declined in tandem with organized labor and American manufacturing.
As The Atlantic’s Derek Thompson notes, the Fed’s findings lend credence to one popular narrative of millennial uniqueness: That they have exceptionally left-leaning political views. That assessment was already supported by reams of survey data. But the fact that Generation Y’s aberrant skepticism about capitalism is, ostensibly, a reflection of their material conditions suggest that millennials’ progressive inclinations will prove durable.
A less encouraging takeaway is that millennials are eager to adopt the extravagantly carbon-intensive lifestyles of their parents — and are likely to do so the moment we do something to alleviate their economic woes.
The Fed’s findings on this front are consistent with other recent research. A 2015 National Association of Home Builders survey found that 66 percent of millennials aspired to live in the suburbs, while just 10 percent preferred life in a city center. And a 2017 report from Harvard’s Joint Center for Housing Studies also found that millennials have no peculiar affection for urban living. Which is too bad, since steadily expanding suburban sprawl and developing an ecologically sustainable American economy are (almost certainly) mutually exclusive goals.
There’s reason to think that millennials will continue to vote for left-wing candidates as they age (and, perhaps, accrue more capital). But there is also cause for doubting that those candidates will make urbanization a marquee piece of their climate agendas.
