Can They Ever Catch Up?

Illustration: Nathan Röhlander

Milton Solórzano graduated from Stanford in 2007, becoming the first in his family to earn a college degree. Not long afterward, the world tumbled into its most significant economic downturn since the Great Depression. In New York, bankers at once-prominent financial institutions walked out of the revolving doors of gleaming office buildings with stunned expressions and boxes of their belongings. It was the start of the Great Recession. In the months that followed, millions of Americans lost their jobs or homes or both. Solórzano was one of them.

After being let go from his contract position at an educational start-up, he scrambled, finding “catch-as-catch-can” gigs. By 2009, just two years after earning his degree in American studies, Solórzano was back at his alma mater, this time as a temporary custodian. One day, as he was cleaning a bathroom in Mirrielees House, he ran into someone he knew.

“He said, ‘Milton, what are you doing?’ ” recalls Solórzano. “And I said, ‘I’m cleaning your shitter.’ ”

Solórzano had no qualms about cleaning—the money was good, and his mom had cleaned homes when he was growing up. Still, he says, it was a “humbling” experience, “not standard for Stanford.” 

But according to new research compiled by the Stanford Center on Poverty and Inequality, Solórzano’s experience is standard for a large portion of his age cohort. In fact, Solórzano’s struggles are emblematic of what center director David Grusky calls the “millennial problem”: deteriorating prospects across many social and economic categories for the millennial generation, defined by the Pew Research Center as people born between 1981 and 1996. This group can remember a time before the omnipresent internet but not a time without war on drugs or on terror, in the Persian Gulf or in Afghanistan.

Milton SolorzanoPhoto: Milton Solórzano, ’07

‘I don’t feel entitled to blame anybody for my circumstances, but I do wish there was a little more understanding.’

- Milton Solórzano, ’07

Grusky argues that millennials are the “canaries in the coal mine” of the modern economy, where forces set in motion decades before they were born have converged to maximum negative effect. The government deregulated the financial sector. Technology and globalization decimated American manufacturing jobs. Wages failed to keep pace with the cost of living. And many millennials—including Solórzano, who was born in 1984—entered the work force (or tried to) during the Great Recession. New jobs were hard to get, and the ones that were available—mostly in the service sector—paid poorly.  

“They’re the first generation to experience in full dosage this new economy we’ve been building,” Grusky says. “They’re getting it in its complete and well-developed form, and we can see just how toxic the coal mine is.”

In June, the Center on Poverty and Inequality published its annual “State of the Union” issue of Pathways magazine, which focuses on social policy. The 2019 edition, titled “Millennial Dilemma,” features research on the millennial experience through different economic and social lenses, including three categories that have long been reliable indicators of well-being: education, housing and health care.  

“As each generation comes of age, there is always handwringing. There’s always angst,” Grusky says. “But with this generation, that just keeps on coming. [Some of them are] entering middle age now, and we’re still very worried.”

And for good reason. Everyone knows what happens to the canary. 

The Narrow Path to Higher Ground

Economists and sociologists have long known that income inequality in the United States is growing. Since 1964, the earnings gap between people with college or other advanced degrees and people without them has been widening, according to 2014 research by MIT economics professor David Autor. Across the board, more education has meant more money. Then, starting in about 1980, people—especially men—without college degrees began doing worse, causing the income gap to expand from both sides. 

But when Stanford sociology professor Florencia Torche and Amy Johnson, a doctoral student in sociology, compared the income of millennials with those of previous generations at the same points in their lives (ages 25 and 30), they found that millennials with college degrees aren’t earning more in real terms than their predecessors; instead, the earnings gap for their cohort is attributable to the fact that millennials without college degrees are earning less than their similarly educated counterparts in the three previous generations (Generation X, baby boomers and the silent generation).

“People with very low levels of education are doing extremely poorly,” Torche says. “The vulnerable and precarious situation of those at the bottom is not only striking but extremely worrisome.”

In research for Pathways, Torche and Johnson considered three indicators of economic well-being: unemployment; year-round, full-time employment; and annual earnings. All millennials, no matter their level of education, were more likely than the three previous generations to be unemployed at the age of 25, a finding the researchers attribute to the Great Recession. But by age 30, the unemployment rates of the four generations are comparable. 

The more striking difference is in earnings. Although college-educated millennials are doing about the same as previous generations, millennials with a high school degree or less, who make up more than one-third of the cohort, are doing much worse. The disparity is greatest for low-educated millennial men, whose median annual earnings at the age of 25 were $29,000, or nearly $10,000 less than baby boomers’ at the same age, with adjustments for inflation. 

There are two ways to close the gap, Johnson says. “You can either increase access to college or make it more feasible to exist in a world without a college degree.” 

Maria Anguiano, MBA ’06, believes both solutions are called for. 

Anguiano and her two younger siblings were raised by a single mom who made $15,000 a year running her own business selling hairpieces. With good grades and the help of some supportive teachers and counselors, Anguiano applied to several colleges, ultimately choosing Claremont McKenna College over Stanford because the former offered her $500 more in financial aid. 

That dollar amount stayed with her as she moved from a career in finance to higher education administration. 

“That was so significant for me,” she remembers. “I don’t know that most people who work in this industry understand how significant $500 can be.”

Anguiano’s sister finished college and is a substitute middle school teacher working toward starting her own business in the fashion industry. Her brother dropped out of community college, joined the Marines and now works as an electrician. Anguiano knows he is fortunate to have found a well-paying job without a college degree, but she doesn’t believe the former should be dependent on the latter.  

“We don’t want to create a society where only people with higher education have access to an economically prosperous life,” she says. 

As senior vice president for strategy at Arizona State University, Anguiano works to make a college degree more accessible for everyone. She expanded pathways to enrollment for nontraditional students; spear-headed a new “ASU Local” campus in Los Angeles that brings the classroom to students who can’t afford to move away from home; and maintains partnerships with Uber and Starbucks that allow the companies’ employees to earn online degrees at no cost.

Universities have a responsibility to help solve the problem of inequality in education, which they contributed to by becoming too focused on “brand and prestige and exclusivity,” Anguiano says. 

“We should be about access and who we include and how we make them all successful.” 

picture of STANFORD magazine May 2019 Cover

Big Idea

Stanford education professor Eric Bettinger has shown that one easy way to boost college attendance or planning for postsecondary education is to simplify the complex processes surrounding financial aid and college savings funds. In particular, he has found that:

  • High school seniors whose families received help completing the Free Application for Federal Student Aid (FAFSA) and information about tuition costs for local universities were more likely to complete two years of college. (Data was collected three years after the assistance was provided.)
  • Parents who received information about tax-advantaged 529 college savings plans and the required opening deposit of $50 were 22 percent more likely to open an account and 7 percent more likely to enroll in automatic monthly contributions.

No Place of Their Own

Of course, even for millennials who have a college degree, life hasn’t necessarily rolled out the red carpet. The young adult homeownership rate is lower for millennials than for the three previous generations. Only the “greatest generation” fared worse, as Americans passed from the Great Depression into a world war.

Home ownership is a key indicator of economic well-being because it “serves as a proxy for wealth,” says Ohio State University public affairs professor Darrick Hamilton, who contributed research on housing to the Pathways issue. A home’s value generally appreciates over time, and homeowners can borrow against that value as needed to increase their purchasing power. Eventually, many families pass down property to their children or grandchildren. People who don’t own homes, then, lack all those advantages, and their children start off behind too.   

Luke BabichPhoto: Jake Cardenas

According to its founder, Luke Babich, ’16, Clever Real Estate research shows that 84 percent of millennials believe home ownership is part of the American Dream.

“The way wealth works is that it’s iterative—it compounds over time,” Hamilton says. “So, early adulthood has implications with regard to one’s capacity to have wealth over [one’s] life course. When we see these gaps early, they will only rise exponentially.” 

In their research, Hamilton and co-author Christopher Famighetti, a doctoral candidate at the New School, found that only 27 percent of millennials owned a home in their 20s, compared with 36 percent of baby boomers at the same age. Only 48 percent of millennials were homeowners between the ages of 30 and 36, compared with 58 percent of baby boomers in their 30s.

Inforgraphic showing young adult homeownership. 48% of millennials own a home by the end of their 30s, compared with 54% of Gen X; 58% of Boomers; and 62% of the silent generation at the same age. Source: “State of the Union: Housing” by Darrick Hamilton and Christopher Famighetti, Pathways, 2019

For black millennials, the story is even bleaker. In 2017, some 58 percent of white millennials in their 30s owned a home while just 22 percent of black millennials did (Hamilton and Famighetti only compared blacks and whites). That gap is larger than it has been for any other generation, even those preceding reforms like the Fair Housing Act, part of the Civil Rights Act of 1968, which prohibited discrimination in housing-related activities, including renting, selling and lending.

Luke Babich, ’16, came face-to-face with the drop-off in homeownership among millennials in 2018 when he co-founded Clever Real Estate, a St. Louis-based company that uses the internet to match sellers with realtors. Babich assumed that millennials, with their proclivity for online experiences, would be Clever’s “primary demographic,” but they weren’t. 

It’s not that they don’t want to own homes—in fact, Clever’s research on prospective millennial clients revealed that 84 percent believe home ownership is part of the American Dream. But they face major barriers, including saving for a down payment. 

Terrence StephensPhoto: Courtesy Terrence Stephens, ’13

Real estate agent Terrence Stephens, ’13, says the majority of his clients are millennials like him, and they face unique challenges. Chief among them? Student loan debt and nontraditional employment.

Sarita Alonzo, ’08, says she’d always planned to wait to buy a home until she was in a long-term relationship. But even if that hadn’t been her plan, she wouldn’t have been able to buy. The recession derailed her postgraduation job plans, and for several years she bounced around, living in rentals and with family members. When she returned to the Bay Area to work for a nonprofit serving at-risk youth, she rented a single room in a house for $1,000 per month. 

“There was just a general understanding that if you didn’t have a two-person income or weren’t making above a certain threshold, [buying a house] wasn’t even a possibility,” says Alonzo, whose parents bought their first home when they were in their 20s. 

In 2015, Alonzo moved to Texas to be with her then-boyfriend. They hoped to buy a “cute, old home” in the up-and-coming neighborhood of East Austin, but the properties they liked sold too fast, often in all-cash offers without an open house. After a year of looking, the couple—now married—found a place by expanding their search to a more “economical” area. By the time they closed on their place in 2016, Alonzo was 30. Still, some of their friends were surprised they’d been able to make the purchase so soon.

Terrence Stephens, ’13, a real estate agent in the Atlanta area, says the majority of his clients are millennials like him, and they face unique challenges. Chief among them? Student loan debt and nontraditional employment. (Research published in Pathways shows millennials took out more and larger student loans than Generation Xers did and defaulted on them more frequently.) Stephens says he has clients with hundreds of thousands of dollars in educational loans without “enough income coming in for an underwriter to offset that debt.”

When Stephens bought his first home last year—he is the first in his immediate family to do so—“the underwriters tore me apart,” asking for records and proof of income because he is an independent contractor, as many millennials are in an economy with an increasing share of such jobs. 

“Traditional underwriters don’t necessarily recognize and respect that,” Stephens explains.

picture of STANFORD magazine May 2019 Cover

Big Idea

Housing-rights advocates often think of rent control as a way to keep housing within reach for people who can’t afford to buy. But Rebecca Diamond, an associate professor of economics at the Stanford Graduate School of Business, has conducted research showing that rent control actually drives up prices by reducing supply and increasing demand. Rent control also benefits people who could afford to pay more, while it “taxes” only one group—landlords. 

“When you tax any group, they’re going to supply less of the good being taxed,” she says. In a 2019 study, she showed that San Francisco landlords, in response to rent control, often turned their buildings into condos or other types of real estate not covered by the regulations. 

Diamond argues instead for a type of rental insurance for low-income tenants. Everyone would pay into the pot through their taxes. If a neighborhood’s rents went up rapidly because of gentrification, low-income renters would receive a tax credit, effectively getting reimbursed for the higher payment.
Under a policy like that, she says, “you get all the benefits of rent control without all the costs.” 

The Effects of Poor Prospects

It’s clear that economic and social forces converged on the millennial generation in ways that dramatically affected their financial prospects. But one of the grimmest revelations in the “Millennial Dilemma” research suggests the generation also faces declining health outcomes.

According to data from Mark Duggan, an economics professor and director of the Stanford Institute for Economic Policy Research, and economics student Jackie Li, ’20, millennials benefited more than any other cohort from the expansion of health insurance that resulted from the passage of the Affordable Care Act in 2010. 

The previous year, 32 percent of adults in their 20s and 26 percent of adults between the ages of 30 and 35 did not have health insurance; by 2017, those numbers had dropped to 16 percent and 15 percent, respectively.

But millennials paid dearly in another category: Their mortality rates increased by as much as 28 percent (see chart) from 2008 to 2016, largely due to drug overdoses and suicides among non-Hispanic whites. By comparison, death rates declined or held steady for nearly every cohort over age 40 during that same period, continuing a trend dating back at least to 2000.

Infographic shows that death rates held steady or decreased for most age groups between 2008 and 2016. But young adults saw increases. Deaths went up 3% for ages 20-24; 21% for ages 25-29; 28% for ages 30-34; and 19% for ages 35-39. Source: “State of the Union: Health” by Mark Duggan and Jackie Li, ’20, Pathways, 2019

Says Duggan, “There should be a sense of urgency to understanding what’s driving those” numbers among millennials, which other researchers have coined “deaths of despair.” 

Anna Lembke, MD ’95, medical director of addiction medicine at Stanford’s School of Medicine, works with some millennials as patients and others as medical students. She believes the medical profession’s overreliance on pharmaceuticals contributes to the generation’s substance abuse problems. She also sees a growing “psychological gap” between what millennials want to accomplish and what they are actually able to in the current economy. The anxiety and depression that can grow in that gap can make millennials more likely to turn to pharmaceuticals or illicit drugs, she says. 

“The millennials are the pill generation,” she says. “This is a generation of kids weaned on Prozac and Adderall and Xanax. They take a pill to get up in the morning; they take a pill to go to sleep at night; they take a pill to concentrate better in their classes. This is completely normative for millennials.”

Lembke wrote about millennials in her 2016 book, Drug Dealer, MD—How Doctors Were Duped, Patients Got Hooked, and Why It’s So Hard to Stop, which explores the prescription opioid epidemic. 

“One of the potential consequences” of the overmedication of millennials is “that it’s not that big of a stretch to get a drug from a doctor versus a drug from a friend versus a drug from a dealer,” she says. “A lot of the taboos around using a molecule to change the way you feel are gone with this generation.”

Lembke also says millennials’ outsize ambitions can be harmful.

“It used to be that a Stanford medical student was just trying to become a good doctor,” she says. “Now these kids are coming in and they want to write a Pulitzer Prize-winning nonfiction book; they want to save a village in Africa; they want to start a new dotcom—all while they’re going to medical school. The paradox is that as their ability to even obtain what their parents have obtained diminishes, their aspirations are greater than that.”

In the long run, Lembke says society needs to change its attitudes toward pain and suffering so that people don’t think any and all ailments can be cured with a pill. 

 Amanda Gelender, ’09, agrees. When she was a junior at Stanford, Gelender, who had already received diagnoses of depression and obsessive-compulsive disorder, voluntarily checked into a psychiatric ward after concerned friends and family members sent the police to check on her one night. She was subsequently diagnosed as having bipolar disorder and prescribed dozens of medications as her doctors tried to find a combination that worked. Although she managed to graduate from Stanford with honors, she spent the next few years “just surviving,” she says. 

“I didn’t think there was going to be a next chapter of my life,” she says. “It felt like the time between being able to find anything remotely joyous in my life was so long.”

Amanda GelenderPhoto: Nikolitsa Paranomos

‘Millennials are creating space to have conversations that may have been swept under the rug by our parents’ generation.’

- Amanda Gelender, ’09

Gelender, who had health insurance throughout that period, says she eventually weaned herself off of her prescribed medications with acupuncture, cannabis, therapy and peer support groups. But she still feels like the health system failed her in part by defaulting to pharmaceuticals that came with side effects—including sleeplessness, trouble breathing, hives and vomiting, among others—that were “brutal and, in retrospect, worse by far than the actual diagnosis.” 

“People with mental health challenges deserve better,” says Gelender, who has since gone back on an antidepressant and now works to improve workplace support systems for people of any age.

As a partner at Vaya Consulting, Gelender helps companies make their workplaces more inclusive. At GitHub, for instance, she helped start an affinity group for people with mental health challenges. Modeled after her own experiences in peer support groups, the sessions took place over video chat or—that most millennial messaging app—Slack. 

Millennials, she says, are at the forefront of efforts to change workplace culture, demonstrating a willingness to deal openly with issues older generations would not have dreamed of discussing publicly, like therapy appointments or the ways they’ve been personally affected by news about police shootings or immigration policy.

“Millennials are creating space to have conversations that may have been swept under the rug by our parents’ generation,” she says.

picture of STANFORD magazine May 2019 Cover

Big Idea

Anna Lembke, MD ’95, medical director of addiction medicine at Stanford, says the medical profession needs to “scale way back” on the use of prescription medications to treat pain and suffering. She has other ideas for how to address the high rates of addiction among not only millennials but also people of all ages, including: 

  • embedding deprescribing clinics at the primary care level;
  • compensating doctors for providing the time-intensive care needed to deal with mental health issues and addiction;
  • requiring doctors to take a class on treating addiction (the way some states require doctors to take a class on pain management); and
  • requiring physicians to consult statewide databases that monitor patients’ prescriptions across all providers.
Lembke’s clinic offers free continuing education courses on best practices for addiction treatment. The problem is not insurmountable, she says. 
“If we decided collectively that this was important, we could do it,” she says. “That’s what it takes.”

Repairing the Damage

Everyone knows canaries went into coal mines (until 1986, when they were replaced by digital toxic gas detectors). But what may be more surprising is that many of them also came back out again. Some miners carried their canaries in special cages fitted with oxygen cylinders. When a canary exposed to the air showed signs of distress, the miner could shut the cage’s glass door and open a valve to let the oxygen in. Then, everyone evacuated the mine until it could be made safer. 

Can we let the oxygen in, for millennials? Can we make the mine safer for them and for future generations, now that we have seen their distress?

Housing researcher Hamilton thinks so. He points to post-Depression New Deal policies that created labor protections, Social Security, unemployment compensation, a minimum wage and the G.I. Bill of Rights. Although those policies excluded minorities “by design and implementation,” Hamilton says, they lifted an entire generation of American whites into the middle class. Hamilton believes similar but more inclusive approaches could do the same for everyone who has been left behind in recent decades. 

“This is not a depressing story at the end of the day,” he says. “And the reason it’s not a depressing story is that government action can change things.”

Lee Ohanian, a senior fellow at the Hoover Institution and director of UCLA’s Ettinger Family Program in Macroeconomic Research, believes policy should be oriented toward “creating a well-functioning market economy where people have the opportunity to make free choices” about their lives. 

Ohanian predicts millennials’ prospects could be improved through less regulation overall, including in health care, housing and education: Let people choose the type of health insurance they want (and don’t restrict the types of plans they can choose from), let developers build more multi-family units in traditionally single-family home neighborhoods, let parents pick which schools their children attend based on performance outcomes, and let schools fire or compensate teachers based on those same outcomes. “Give the market a lot more opportunity to perform,” Ohanian says, “and we’ll make the lower end [of the income spectrum] much, much better off.”

Grusky suggests a more “robust safety net,” one that broadens unemployment insurance, labor protections and free higher education, could help millennials. In fact, it already has. According to a Pathways analysis of the safety net, the millennial poverty rate at age 30 would have been the highest of the past four generations were it not for federal and state earned income tax credits and increased food-stamp rolls. 

But Grusky cautions that such programs can be a “Band-Aid.” He agrees that putting market mechanisms to work for the disadvantaged—including by tweaking residential zoning laws—is an important approach. For instance, building low-income housing in rich neighborhoods would allow children who otherwise wouldn’t attend well-funded public schools to enjoy the advantages they provide. Adding higher-income housing to poor neighborhoods means better-off residents who have the capacity and political power to push for improvements would likely do so, to everyone’s benefit. 

“We don’t need to give up on markets,” he says. “We just need to direct them in a different way.”

In the May issue of Stanford, Solórzano, a Class Notes correspondent, made a special plea for “radically inclusive” entries, not just “professional accomplishments or major life events.” He says he appreciates connecting with others like himself, people who didn’t necessarily land their dream job, a great job, or any job at all.

Solórzano eventually took out loans to go back to school to earn a master’s degree in history, and he is now looking for work in related fields. He says he’s tired of the narrative that millennials aren’t doing well financially because they’re buying lattes and avocado toast. 

“Of course I’m going to have a coffee—because I can’t buy a house,” Solórzano says. “I don’t feel entitled to blame anybody for my circumstances, but I do wish there was a little more understanding. If somebody has a lame leg, you don’t expect them to run up a flight of stairs. That’s just cruel.”

Despite the negative trends identified in the “Millennial Dilemma” research, Solórzano says he’s relieved to see it published. “Now the reality is unavoidable,” he says. “The discussion is being forced on the people who pretended that the recession ended and the jobs came back and everyone is doing fine.”

Rebecca Beyer is a Boston-based journalist. Email her at