When Julius Givens moved to Chicago after graduating from college in 2013, he spent six months delivering sandwiches by bicycle while living with two other roommates in a studio apartment.
I had no money and more than $20,000 in student loans after earning a bachelors degree from the University of Missouri, said Givens, who aspired to be a firefighter at the time. Its tight living with three people in a studio, but you figure out how to handle it.
Scrimping was a way of life for Givens, and it still is for some in his generation. Through a fluke in the timing of their births, 75 million young adults in the millennial generation entered adulthood as the economy was in or coming out of one of the worst recessions in U.S. history. And thats left an indelible financial mark on todays 25- to 34-year olds. Most have found jobs since the harsh days of unemployment, but their incomes are 20 percent lower than what baby boomers earned at the same age, according to a new study by Young Invincibles, an advocacy group for millennials. They also have half of the net wealth the baby boomer generation had accrued by roughly the same age.
Millennials fall short in other ways as well. Numerous studies point out that millennials have fewer cars and homes, less savings and other assets, and a lot more student loans than their parents had when they were young.
Givens doesnt begrudge the situation. He says hes doing better than his mother did at his age, since she worked and raised six children on her own in St. Louis. He feels fortunate to have a professional job in the medical products industry and backing for a business hes starting. He now lives comfortably in a two-bedroom apartment with a roommate in Chicagos Wicker Park neighborhood.
Im not hurting for anything, Givens said. I dont need a car or a house.
But many millennials will struggle to achieve the financial wherewithal their parents had.
A study by the New York Federal Reserve in 2015 showed that a recession early in a career can drag down earnings at the time and then continue to stunt paycheck growth as people move on to other jobs through a lifetime of work.
Additional research by the St. Louis Federal Reserve attributed the tremendous increase in 25-year-olds living with parents to the fact that 40 percent of graduates around the time of the recession ended up being underemployed. In other words, they started jobs that required fewer skills and provided lower pay than would be expected based on the level of their education. During 2012 to 2013, almost half of millennials were living at home, compared with only a quarter of the same age adults in 1999.
Incomes earned early in ones career often set the stage for lifetime earnings, said Tom Allison, deputy director of policy and research for Young Invincibles. When you start from a lower rung, its harder to negotiate a higher salary.
Using U.S. government data from the Survey of Consumer Finances, Young Invincibles researchers found that young adult workers earned $40,581 in 2013, compared with the average $50,910, adjusted for inflation, that young adults earned in 1989.
You cant earn 20 percent less income and have the same standard of living as the baby boomers, said Downers Grove financial planner Adam Glassberg, 30.
The more you save early in life, the more flexibility you have later, Glassberg said. The impact of lower income and lower net worth will be millennials redefining retirement working longer; maybe into their 70s; not 65.
Many millennials are delaying home purchases because they dont have down payments, but by putting off home purchases to their late 30s, they will likely find themselves with the burden of house payments in their retirement years, Glassberg said. In addition, he notes, this generation with mortgage loans first taken late in their 30s wont have the luxury of borrowing from the equity in homes to send children to college.
Further, because they were unemployed or underemployed after the recession, many millennials missed the chance to buy homes when prices were cheap. Consequently, they didnt get the advantage of building wealth effortlessly through sharply rising values during the housing recovery, the St. Louis Federal Reserve found.
Perhaps parents made homes possible for some millennials. A Harris poll after the recession, sponsored by the National Endowment for Financial Education, found that 29 percent of parents were helping their children pay for mortgages or rent.
Despite the burdens left on millennials by college student loans, the Young Invincibles study made it clear that obtaining a college degree is more necessary for millennials than it was for baby boomers.
Today a young adult needs a college degree in order to reach earnings that are equivalent to what an individual could earn without any college degree in 1989, federal data show.
LaKrista Cummings, 22, who grew up in the Englewood area of Chicago, has watched friends with no degree lose jobs repeatedly as businesses closed or scaled back during cost-cutting.
In search of financial security, Cummings went to college and earned a bachelors degree in sociology, but she hit a brick wall with her job hunt.
I didnt get a job, and I was really scared, she said.
With $40,000 in college loans and a 2-year-old daughter, Cummings didnt dare take a chance on a continued search for a job that might fail to support her and her child. So she decided to work on a doctorate and become a college professor. The program she chose in African studies at the University of Illinois at Urbana-Champaign is covering her tuition and rent, and she can delay paying her student loans. Shes living in an apartment covered by her fellowship, and working 17 hours a week as a receptionist so she can pay for her daughters day care.
She hopes there will be a job at the end of her graduate school studies. I know people who went to school and cant find a job, she said. Its really hard.
Going to college and finishing without any debt, however, doesnt put millennials on par with their parents generation. Recent college graduates without student loans are trailing the 25- to 34-year-olds of 1989 who also had graduated from college without debt. The median net worth of this group in 1989 was $125,572 compared with just $75,000 for millennials with degrees, according to the Young Invincibles report.
The reason for the difference may not be entirely income. Millennials also tend to be making lifestyle choices that are different from their parents generation.
Lewis Minaglia, who is now 26, lived with his parents in the suburbs for 2 1/2 years after graduating with a business degree from DePaul University. His goal was to save enough money to buy a home.
But once hed accumulated enough for a small down payment, he decided he wanted to be carefree. He left his parents home in the suburbs at age 25 and moved to a one-bedroom apartment in the citys ritzy Gold Coast neighborhood. Now he has the city life he craved while commuting to work, and no home or car payment will limit his choices if he decides to move for a job or a new neighborhood, he said.
Julius Givens, 26, also isnt interested in the burden of owning a home or car. Buying a home seems antiquated for young adults now, he said. This is not like the past, when you got married in your 20s, bought a house and worked at the same place for 30 years.