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Robyn Beck / AFP What on earth would millennials have in common with this trio of gray hairs: Elizabeth Warren, Joe Biden and Bernie Sanders?
On the surface, the strong attraction that millennials have for the three senior-citizen Democrats running for president—Massachusetts Sen. Elizabeth Warren (70), former Vice President Joe Biden (77) and Vermont Sen. Bernie Sanders (78) — seems odd.
What on earth would millennials — the first Americans to come of age in the 21st century, the first true digital generation — have in common with this trio of gray hairs?
Several things, actually, but here is the most important thread linking young and old: The candidates think that capitalism as we know it today isn’t working as it should, and that most Americans are getting the economic shaft. Millennials agree.
Biden, generally a centrist, has said that America needs a “reordering” of capitalism “to make capitalism work and save it.”
American oligarchs
But Sanders and Warren, running further to the left, have been far more blunt, arguing that capitalism is only working for what I’ll call American oligarchs — the uber billionaires who have gotten filthy rich off the system, then used that vast wealth to protect their gains and influence by buying off politicians.
The richest 1% of Americans now own more wealth than the entire middle class.
Sanders and Warren routinely cite data to back their claims, like a recent Brookings Institution study saying that “the top 1% alone [original emphasis] holds more wealth than the middle class. They owned 29% — or over $25 trillion—of household wealth in 2016, while the middle class owned just $18 trillion.”
Read MarketWatch’s election coverage.
And this was before President Donald Trump’s tax cuts, the bulk of which was skewed towards benefitting those one percenters, and those even wealthier than that — like Trump himself.
So when Democratic candidates say the system works better—much better—for some than others, it resonates with millennials, who know from personal experience that capitalism hasn’t helped them as much as it has prior generations.
Distribution of wealth
There’s data to support this view as well. Consider the following Federal Reserve data, showing distribution of U.S. household wealth over the past 30 years.
The 32 million households headed by a millennial have just 3% of the nation’s wealth.
It shows that baby boomers — those born between 1946 and 1964 — collectively owned 21% of the nation’s wealth by the time their generation hit a median age of 35 in 1990 (median means half were older than 35, and half younger).
But when Generation Xers reached a median age of 35, they controlled just 8% of all U.S. wealth.
And because their birth years range from 1981 to 1996, millennials haven’t hit the 35 median point yet — that’s about three years away — but the data shows their financial situation much more perilous than the prior two generations. The Fed data shows they currently own just 3% of the America’s wealth.
A partial explanation for this is that the Boomer generation (about 76 million births) was 50% bigger than the Gen X generation (about 50 million births). And yet the aggregate share of wealth at age 35 was some two-and-a-half times as much.
And get this: The number of millennial births is about the same size as the Boomers: 75 million births. Yet the millennials’ aggregate share of wealth at median age 35 will be far less, according to the Fed’s data.
Generational divide
The Washington Post’s Christopher Ingraham adjusts for this, pointing out that in 1990, “boomers owned 21% of the nation’s wealth and represented 31% of the population, for a wealth-to-population ratio of 0.68—each percentage point of the total U.S. population represented by boomers, in other words, owned 0.68 percent of the wealth.”
And yet in 2008, “Gen Xers owned 9% of the wealth and made up 22% of the population, for a wealth-to-population ratio of 0.41.”
Millennials by comparison, are on track to have an even lower wealth-to-population ratio than that.
What does this tell us? For starters that as one generation grows older, they tend to have less wealth than the generation that preceded it. Millennials who have now turned 35 have less, on average, than their parents, who in turn had less than theirs.
Capitalism isn’t working
It also tells us that young Americans increasingly have legitimate reason to believe that capitalism isn’t working—at least not for them. One tenet of the American story has always been that each generation will do better than the one that came before. But well into the 21st century, this no longer appears to be so.
Other data complements this thesis: Millennials tend to carry more debt—largely from college—and at an earlier age. This, in turn, has a spillover effect: They buy fewer homes, get married later, have children later. In other words, we’re seeing a generational delay in traditional American rites of passage. Why? Because they can’t afford it.
So when presidential candidates who are decades older say “the system’s not working for you,” it’s a validation for what millions of millennials experience every day. Little wonder that 53% of Americans under the age of 30 view socialism favorably — —and that 69% of them say they’d be willing to vote for a “socialist” candidate for president.
Their parents may be aghast—but then again, they had an easier time of it than their kids.
