People in generation Y have often been called digital natives because they grew up with computers, smartphones, social media and the Internet.
People in generation X should be labeled debt natives because of the heavy burden of debt that they carry. The Federal Reserve Bank of St. Louis reports labels them “Generation Debt, saying: “The average member of generation X (born between 1965 and 1980) owes about 60 percent more debt (adjusted for inflation) than his or her counterpart of the same age did in 2000. No other generation’s average debt burden increased that much between 2000 and 2014.”
Is it any wonder. Generation X grew up immediately after the baby boom generation. Companies were easing access to credit, offering many teens and young adults in generation X credit cards while they were in college. Many got underwater fast.
The information is pulled from the latest issue of In the Balance, a publication of the Center for Household Financial Stability at the Federal Reserve Bank in St. Louis. In a prepared release, the Fed reports that rapid increases in the value of assets coupled with modest decreases in debt enabled overall household wealth to grow with real household wealth exceeding its pre-recession peak by 2.6 percent.
However, members of generation X were “the most aggressive borrowers of any generation between 2000 and 2008.” The average member of generation X carried more than twice as much debt into the Great Recession.
Other generations took on more debt going into the recession, “but none as much as the members of Gen X,” the report said. Families have shed a lot of debt since, but “cumulative income growth of the average family of Gen X between 2000 and 2014 was much lower, implying an increased debt burden and pressure to reduce debt further.”
The authors of the report note that tight credit and the continuing widespread efforts to reduce debt among younger families will result in economic growth being “dampened for some time.”