Several factors can contribute to the financial trends among the millennial generation, who are now well into adulthood, including how their income compares to their expenses. Let’s look in more detail about average millennial incomes in different demographics.
Average Millennial Income
The exact definition of the millennial generation can vary as there is no official definition. Millennials as defined by Pew Research are those born between 1981 and 1996, or those who were ages 26 to 41 in 2022. The Government Accountability Office sometimes defines millennials as those born between 1982 and 2000, whereas the U.S. Bureau of Labor Statistics uses 1981 to 1997. For this reason, it can be difficult to compare data. The median income for millennials ages 25 to 34 was $74,862 in 2021, according to the U.S. Census Bureau. People ages 35 to 44 earned a median income of $90,312. Income is a key factor in building net worth. The median net worth for millennials was $40,100 in 2020, compared to $149,100 for Gen X and $262,900 for baby boomers. Of course, preceding generations have had more time to build that wealth, but other factors such as debt and income can play a role. Lower-income millennials generally pay out a disproportionately high share of expenses. For example, they may pay a greater share of their incomes toward student loans. According to a Government Accountability Office study, lower-earning millennials faced student loan debt loads roughly four times greater than their income in 2016, whereas the highest-earning millennials’ debt was equal to about a third of their income.
Millennial Income vs. Other Generations
Much has been made of how millennials’ earning abilities compare with their parents’ and grandparents’ generations. However, comparing financial differences between generations is complicated. Income is only one component of a broader financial picture, and breaking down average incomes by genders can reveal different trends between the generations. For example, according to a 2019 Stanford study, millennial men tended to earn slightly less than men from previous generations until they reached age 35. Millennial women, on the other hand, tended to earn more than women from any prior generation. This is just one example of how comparing incomes only across generational groups may not provide the full picture.
Gender Income Gap Among Millennials
In every generation, including among millennials, men and women do not earn equal pay. According to the U.S. Census Bureau, in 2021, women earned a median of $51,168 compared to $70,525 earned by their males counterparts. These differences persist despite the fact that millennial women attend college at higher rates than men, Dr. Jordan Conwell, assistant professor of sociology at The University of Texas at Austin, told The Balance. Potential solutions may include policies that create affordable and high-quality childcare that would allow women to reenter the workforce. Anti-discrimination laws and pay-equity policies are other potential solutions to reduce racial and gender disparities in employment and income, Dr. Conwell said.
Racial Income Gap Among Millennials
Comparing incomes between millennials of different races also reveals different income trends. Older millennials (those born in the 1980s), are more racially and ethnically diverse than previous generations. About 57% of older millennials identified as non-Hispanic White in 2020, compared to 81% of people born in the 1940s. They have experienced different trends depending on their race and ethnicity. From 2007 to 2019, Black families fell further below wealth expectations as Hispanic families made steady improvement. White families, meanwhile, rapidly improved their financial situation between 2013 and 2019. Differences in income between people of different races can be due to many factors, including “persistent racial inequalities in both opportunities to gain human capital (education and skills) and opportunities to garner returns to that capital in the labor market," Dr. Conwell said. For example, discrimination in the housing market historically prevented many Black families from buying homes, so in turn, that wealth has flowed to new generations disproportionately. Systemic racism is one reason why the wealth gap among races has continued to widen in recent decades. Millennials spend more on housing as a percentage of income (35% in 2015; mostly through rent) compared with baby boomers (30%, mostly through homeownership). Millennials also tended to eat out more, spending 6% of their income on that, whereas baby boomers spent 5%.
