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A new study reveals that Generation Y does not really differ in the way they spend their Gen X money or the baby boom generation – they just have less money to spend.
Millennia have been accused of murdering industries ranging from golf equipment manufacturers to razor makers, with sales falling in recent years.
"They are often called narcissists, idealists, socialists and more experienced than their previous generations," reads a Deloitte study published this week. "They even blamed them for ruining everything, movies at the wedding!"
However, the study – written by Kasey Lobaugh, Bobby Stephens and Jeff Simpson – ultimately refutes many of the stories about millennial consumers.
Deloitte's survey of more than 4,000 consumers, 450 billion location points, more than 200 billion credit card transactions and government data reveals millennials are spending their money on activities nearly identical to those of their parents 30 years ago.
However, the millennial generation is "dramatically worse financially" than older generations. Since 1996, the net worth of US consumers under the age of 35 has decreased by 34%.
The financial crisis and college debt – not a toast to the lawyer – are changing the way millennials spend their money
The money spent on food, alcohol and restaurants represents roughly the same percentage of millennials' income as these categories did in 1997. In others In other words, the millennial generation does not give up access to property because it wastes its money in avocado bread.
"In many ways, the consumer has not fundamentally changed," said Kasey Lobaugh, senior director and chief retailer of retail innovation at Deloitte, in a statement. "Instead, their behaviors were triggered by an increase in non-discretionary spending and the growing division between high and low income groups."
People spent 16% more in housing in 2017 than in 2007. Health care costs increased by 21% over the same period. Education spending soared by 65% as student debt soared. Since 2004, the cost of student debt has increased by 160%.
In total, 17% of 25 to 34 year olds were spent on these non-discretionary costs in 2017, up from 12% in 1997.
The rise in non-discretionary income has particularly affected the millennia of low income. The 40% of the least affluent American consumers had less discretionary income in 2017 than it was a decade ago. The next 40% did not do much better, with only the top 20% having significant revenue gains.
The badysis of income growth over the last decade for a group of high-income households, earning more than $ 100,000, compared to a group of less than $ 50,000, shows how much of this difference is striking. The income growth of the high-income group between 2007 and 2017 increased by 1 305% over that of the lower-income group.
Deloitte's conclusion echoes a 2018 study by the US Federal Reserve that millennia have fallen behind economically because they reached maturity during the financial crisis.
Read more: The millennial generation kills countless industries, but the Fed says it's mostly because they're poor
"Millennials are less well off than members of previous generations when they were young, with smaller earnings, fewer badets and less wealth," the study says, adding: "According to old age and other factors, millennia do not seem to have preferences for consumption that differs significantly from that of previous generations. "
The average real labor earnings of full-time male heads of household were 18% and 27% higher for Generation X and baby boomers when they were young compared to millennials, revealed the company. study. For younger women, the difference was smaller – 12% for Generation X and 24% for Baby Boomers – but previous generations still earned more money when they were younger, with similar demographics.
Millennials have less money to spend than baby boomers and generation X of the same age. With less money to spend, they are forced to be more demanding. Some purchases – such as a car or a house – remain out of reach for many, which makes it necessary to change the way millennials spend their money again.
While the millennial generation is likely to freeze the sales of some industries, the Fed and Deloitte come to the same conclusion: the economy, not the personal preferences of the generation, is to blame for the deadly fever millennials.
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