Millennials buy the things their parents did – but they're much poorer

Baby boomers seem to have had an advantage in nearly every financial metric compared to millennials, according to a new study from the Federal Reserve.

  • Millennials earn less, own fewer assets and have more debt than previous generations.
  • The fact that millennials' spending habits differ from previous generations is best explained by lower earnings and less wealth, rather than changing tastes.
  • Some millennials might be too optimistic about their ability to retire early — or on time.

A study published this month from the Federal Reserve suggests the reason millennials are spending money differently compared to previous generations isn't because of their unique tastes, but rather they just don't have much money to spend.

There's a common narrative, according to the study, that says millennials' changing preferences explain why we've seen the recent decline of brick-and-mortar retail stores, home construction and purchases, and new-car sales. But the data indicates that millennials' tastes are pretty much the same as previous generations.

The researchers wrote that "it primarily is the differences in average age and then differences in average income that explain a large and important portion of the consumption wedge between millennials and other cohorts," which included Generation X, baby boomers, the Silent Generation and the Greatest Generation.

In short, millennials show "lower earnings, fewer assets and less wealth" compared to previous generations, and so they're tending to get married and buy cars and homes later in life.

​The "lasting impression" of the Great Recession

One distinguishing factor of millennials' coming-of-age story was the recession of 2007, and the weak labor demand that followed. "Millennials appear to have paid a price for coming of age during the Great Recession," the researchers wrote, noting the recession's subsequent weak labor demand.

They added elsewhere: "The severity of the 2007 Global Financial Crisis and the recession that followed may have left a lasting impression on millennials, who were coming of age at that time, much like the Great Depression left a lasting impression on the Greatest Generation."

That lasting impression might manifest in "attitudes toward saving and spending" that could be "more permanent for millennials than for members of generations that were more established in their careers and lives at that time," the researchers wrote.

The study also notes that millennials have about the same levels of debt as Generation X, though more debt than Baby Boomers. However, millennials also have markedly fewer financial assets than Generation X, even though millennials do seem to be saving for retirement more than other generations did at the same ages, a change that likely "reflects, in part, the replacement over time of defined-benefit retirement pensions with defined-contribution retirement accounts."

​Do Millennials have realistic expectations about retirement?

It's hard to say for sure, but some data suggests that millennials might be a bit delusional about their future economic standing. A 2018 TD Ameritrade survey, for instance, showed that 53 percent of millennials expect to become millionaires, and they expect to retire, on average, by age 56.

That optimism, as I wrote in July, doesn't seem to reflect the reality forecast by data showing that social security won't be able to pay out full benefits by 2034, the group has a collective student loan debt of more than $1 trillion, and young people are now earning relatively less than previous generations — a difference that's likely explained, in part, by more participation, particularly among women, in the workforce.

Still, millennials don't need to worry too much, as long as they're willing to work hard, save and push back retirement by a few years, as Alicia H. Munnell, director of the Center for Retirement Research at Boston College, wrote in a Politico article on millennial retirement.

... My research shows that the vast majority of millennials will be fine if they work to age 70," Munnell wrote. "And although that might sound old, it's historically normal in another sense: Retiring at 70 leaves the ratio of retirement to working years the same as when Social Security was originally introduced.
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Experts argue the jaws of an ancient European ape reveal a key human ancestor.

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  • The jaw bones of an 8-million-year-old ape were discovered at Nikiti, Greece, in the '90s.
  • Researchers speculate it could be a previously unknown species and one of humanity's earliest evolutionary ancestors.
  • These fossils may change how we view the evolution of our species.

Homo sapiens have been on earth for 200,000 years — give or take a few ten-thousand-year stretches. Much of that time is shrouded in the fog of prehistory. What we do know has been pieced together by deciphering the fossil record through the principles of evolutionary theory. Yet new discoveries contain the potential to refashion that knowledge and lead scientists to new, previously unconsidered conclusions.

A set of 8-million-year-old teeth may have done just that. Researchers recently inspected the upper and lower jaw of an ancient European ape. Their conclusions suggest that humanity's forebearers may have arisen in Europe before migrating to Africa, potentially upending a scientific consensus that has stood since Darwin's day.

Rethinking humanity's origin story

The frontispiece of Thomas Huxley's Evidence as to Man's Place in Nature (1863) sketched by natural history artist Benjamin Waterhouse Hawkins. (Photo: Wikimedia Commons)

As reported in New Scientist, the 8- to 9-million-year-old hominin jaw bones were found at Nikiti, northern Greece, in the '90s. Scientists originally pegged the chompers as belonging to a member of Ouranopithecus, an genus of extinct Eurasian ape.

David Begun, an anthropologist at the University of Toronto, and his team recently reexamined the jaw bones. They argue that the original identification was incorrect. Based on the fossil's hominin-like canines and premolar roots, they identify that the ape belongs to a previously unknown proto-hominin.

The researchers hypothesize that these proto-hominins were the evolutionary ancestors of another European great ape Graecopithecus, which the same team tentatively identified as an early hominin in 2017. Graecopithecus lived in south-east Europe 7.2 million years ago. If the premise is correct, these hominins would have migrated to Africa 7 million years ago, after undergoing much of their evolutionary development in Europe.

Begun points out that south-east Europe was once occupied by the ancestors of animals like the giraffe and rhino, too. "It's widely agreed that this was the found fauna of most of what we see in Africa today," he told New Scientists. "If the antelopes and giraffes could get into Africa 7 million years ago, why not the apes?"

He recently outlined this idea at a conference of the American Association of Physical Anthropologists.

It's worth noting that Begun has made similar hypotheses before. Writing for the Journal of Human Evolution in 2002, Begun and Elmar Heizmann of the Natural history Museum of Stuttgart discussed a great ape fossil found in Germany that they argued could be the ancestor (broadly speaking) of all living great apes and humans.

"Found in Germany 20 years ago, this specimen is about 16.5 million years old, some 1.5 million years older than similar species from East Africa," Begun said in a statement then. "It suggests that the great ape and human lineage first appeared in Eurasia and not Africa."

Migrating out of Africa

In the Descent of Man, Charles Darwin proposed that hominins descended out of Africa. Considering the relatively few fossils available at the time, it is a testament to Darwin's astuteness that his hypothesis remains the leading theory.

Since Darwin's time, we have unearthed many more fossils and discovered new evidence in genetics. As such, our African-origin story has undergone many updates and revisions since 1871. Today, it has splintered into two theories: the "out of Africa" theory and the "multi-regional" theory.

The out of Africa theory suggests that the cradle of all humanity was Africa. Homo sapiens evolved exclusively and recently on that continent. At some point in prehistory, our ancestors migrated from Africa to Eurasia and replaced other subspecies of the genus Homo, such as Neanderthals. This is the dominant theory among scientists, and current evidence seems to support it best — though, say that in some circles and be prepared for a late-night debate that goes well past last call.

The multi-regional theory suggests that humans evolved in parallel across various regions. According to this model, the hominins Homo erectus left Africa to settle across Eurasia and (maybe) Australia. These disparate populations eventually evolved into modern humans thanks to a helping dollop of gene flow.

Of course, there are the broad strokes of very nuanced models, and we're leaving a lot of discussion out. There is, for example, a debate as to whether African Homo erectus fossils should be considered alongside Asian ones or should be labeled as a different subspecies, Homo ergaster.

Proponents of the out-of-Africa model aren't sure whether non-African humans descended from a single migration out of Africa or at least two major waves of migration followed by a lot of interbreeding.

Did we head east or south of Eden?

Not all anthropologists agree with Begun and his team's conclusions. As noted by New Scientist, it is possible that the Nikiti ape is not related to hominins at all. It may have evolved similar features independently, developing teeth to eat similar foods or chew in a similar manner as early hominins.

Ultimately, Nikiti ape alone doesn't offer enough evidence to upend the out of Africa model, which is supported by a more robust fossil record and DNA evidence. But additional evidence may be uncovered to lend further credence to Begun's hypothesis or lead us to yet unconsidered ideas about humanity's evolution.