Millennials in Crisis: Myth-Busting Millennial Debt Narratives

Abstract

Intense pop-cultural commentary on millennial finances and indebtedness perpetuates two conflicting narratives. One suggests that millennials are doomed and face higher debt levels than earlier generations, compounded by rising tuition costs, a lack of affordable housing, high costs of living, and an increasingly competitive job market. The contrary “millennial bootstrapping” narrative denies that millennials are more financially challenged than previous generations and argues that millennials need to pull themselves up their proverbial bootstraps and improve their work ethic to secure financial success. This article fact¬checks these two narratives and fills a significant gap in the Canadian academic literature on the indebtedness of millennials. Publicly available data do not firmly support either narrative and suggest that both are overly broad and lack nuance. Millennials face more debt than ever before, but other generations are experiencing even higher levels of debt and rates of increase of debt. While the data suggests that millennials are struggling with increased levels of student debt, the same cannot be said for credit-card debt, which counters the dominant “millennials are doomed” narrative. The article evaluates the impact of financial literacy education programs, which millennials have been the first to fully experience. It finds that the impact of such programs is unclear. It also examines potential legislative safeguards to protect millennials and asks whether millennials are adequately protected against exploitation in the types of contracts they commonly enter. Analysis of the data on debt loads, financial literacy, relevant legislation, and contracts that may disproportionately impact millennials leads to no clear conclusions and finds that both popular narratives lack sufficient support. The authors conclude that while the media narratives may seem harmless, they may distract academics and policymakers from the true consequences and impacts of increasing debt loads on particular generations or socio-economic groups.