The Millennial Racial Wealth Gap
It is not surprising that the median wealth of all Millennials with any debt at age 30 is lower than those with no debt who attended college; however, their median wealth levels are also lower than young adults who never attended college. Uncovering these realities has led scholars to express concern that student loan debt may be reproducing racial wealth inequalities among the latest generation of youth (Addo, Houle & Simon 2016; Scott-Clayton & Li 2016).
It is important to note that gender wealth disparities persist despite the relative gains women continue to make in their educational pursuits. The relationship is more nuanced once the racial and ethnic diversity of Millennials is considered, however. Similar to Gen Xers, Millennial women have higher graduation rates than men, 39% compared with 30% (Frey 2018). White women have the highest graduation rates at 39.62% followed by White men, 31.24%. The wealth of White female college graduates ($52,406) far exceeds Black ($3,316) and Latinx ($29,889) female graduates but is lower than White men by almost $20,000.
The gender disparity in college completion is even greater among Black Millennials, where Black women completed college (22.76%) at almost twice the rate of Black men (13.36%). Yet, the median wealth of Black male Millennials ($8,105) was 2.5 times greater than Black female graduates ($3,316). Latinx women and men have the smallest gap in graduation rates, with less than a 4% difference. Comparable to the aggregate wealth levels, the figures for Latinx graduates lie in between the Black and White median values.
Interestingly, Millennial college graduates of Latinx descent are the closest to having gender wealth parity, with only a $5,000 difference in median wealth. And unlike Black and White college graduates, it is Latina women who have the higher median wealth. Significantly, this relationship exists only among college graduates. Not only does the median wealth of Latinx men with some college ($37,152) exceed the wealth of Latinx women with some college ($25,284), but it is greater than the median wealth of Latina college graduates ($29,889). This relationship also holds among Black college attendees (Bhattacharya, Price & Addo 2019).
These wealth differences indicate that obtaining some of the highest levels of education did little to close racial wealth gaps among Millennials and is no guarantee of gender economic equality, for Black women in particular (Hamilton et al. 2015). Of course, these numbers reflect differences in several wealth-generating domains beyond education, including inherited wealth from their parents and grandparents, labor market returns, occupational segregation, asset ownership, and family structure, which we turn to next.
Marriage and Wealth
Along with distinct trends in wealth, education, and education debt that vary by race and ethnicity, Millennials’ relationship with marriage continues to diverge from previous generations and also varies by race. Specifically, Millennials are getting married later, reflected in the highest median age at first marriage, and are more likely to be never married (Bialik & Fry 2019).
With a smaller proportion married in young adulthood, the marital retreat has spread throughout the income and wealth distribution. However, it has not occurred uniformly across race and ethnic groups. Marriage rates for White, Latinx, and Asian Millennials are within eight percentage points of one another—48%, 45% and 52% respectively—and when combined with those with any marital history, more than half of their ethnoracial groups have ever married (Frey 2018). Marriage rates for Black Millennials are the lowest, at just over a quarter ever married and a fifth currently married.
The low number of women who married in young adulthood among Millennials also means there are more children born to unmarried women. A quarter of Millennial Black women were unmarried at the time of the birth of their first child, compared with 11% of Latina and 7% of White unmarried mothers. Differences in family building patterns, such as the sequencing of childbearing and marriage, and the timing of union formation, are associated with different wealth and economic outcomes. Since married individuals tend to have more per capita wealth than unmarried or cohabiting individuals, these trends in family formation and child rearing reflect another source of inequality that is compounded by characteristics of race and ethnicity (Addo & Ricketts, 2019). Not unlike previous generations of Black women, marriage is not a panacea for Millennial Black women, but it does appear to impact economic and social stratification (see Addo & Lichter 2013).
In particular, marriage’s relationship with wealth differs among White, Black, and Latinx married Millennials.
Although Black married Millennials hold over two times the amount of per capita wealth of unmarried Black Millennials, their wealth holdings, $9,625, are less than single White Millennials, $12,032. This is important given the standard trope that marriage disparities cause racial wealth inequality. Married Latinx Millennials, whose marital rates are closer to White Millennials, have a little more than half their wealth, $13,777. Independent of marital status at birth, the median wealth holdings of Black mothers is low, less than $5,000; however, the median wealth holdings of Black Millennial married mothers ($4,200) was also lower than that of unmarried Black mothers at birth ($4,065).
This data indicates that among Millennials the economic bar to marriage is high and is more pronounced for Black women, in particular. Although the marriage rates of Latina women are closer to White women, their wealth holdings are about half.
As fewer Millennials marry, wealth is concentrated among this small share of married households, who are already more likely to be White and socioeconomically advantaged. Given that economic markers of current and future financial insecurity, like education debt, are associated with remaining single or cohabiting among Millennials (Addo 2014), it is unsurprising that debt and wealth disparities stratify family formation patterns by race and ethnicity among Millennials.
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The Emerging Millennial Wealth Gap
