Gifts, Debts, Inheritances: White Millennials Get, Everyone Else Gives

all my friends get help from their parents

Mel Jones’s Atlantic piece “Gifts, Debts, and Inheritances,” originally, it seems, from Washington Monthly, makes the important point that not all Millennials are created equal. While the majority of white twenty-somethings get help from their parents in matters large and small, the majority of twenty-somethings of color get nothing — indeed, they are expected to help out their family members.

The divergence starts while undergrads are at school.

In college, black and Hispanic Millennials are more likely to have to work one or two jobs to get through, missing out on opportunities to connect with classmates who have time to tinker around in dorm rooms and go on to found multibillion-dollar companies together. Many of them take on higher levels of student debt than their white peers, often to pay for routine expenses, such as textbooks, that their parents are less likely to subsidize.

Small wonder that so many students of color find themselves struggling to cope with what one academic calls “the inheritance of disaffection.” For some, as he puts it, the only inheritance they can look forward to is “rage and sadness.”

After school, the help is less likely to come by, too. How much help are we talking about?

At least 40 percent of the 1,000 Millennials (ages 18 to 34) polled in a March USA Today/Bank of America poll get help from parents on everyday expenses. A Clark University poll indicated an even higher number, with almost three-quarters of parents reporting that they provide their Millennial children with financial support. Another survey saw nearly a third of Baby Boomers paying for Millennials’ medical expenses. A quarter of Boomers subsidized “other expenses” so their Millennial offspring could save money. Black and Hispanic Americans are less likely to be the recipients of this type of support. …

a primary reason why people of color are unable to save as adults is because they give financial support to close family.

Saving money in your twenties is key. It lets you pay down debt and save up for real estate and other equity-building investments. Even though I worked low-paying jobs and lived in New York, I was able to save a huge amount in my twenties; I guarded my ING high-interest online savings account like it was the gates to Heaven. When I was ready to empty it out, I had accumulated $100K. There are few things in my life I’m prouder of than getting to smash that piggy bank and hand the contents over as a down payment for my first apartment.

But did I do it all myself? Of course not. In some traditional ways, I was independent — more independent than many Millennials, according to the data. I didn’t get infusions of cash from my parents. They didn’t pay off my credit cards or foot my medical bills. They didn’t help with rent. What they did do, though, was pay for college, which meant I didn’t have to. That was huge. It was an enduring gift, the kind that keeps giving. My grandma, as I’ve mentioned, also made occasional “disbursements” to her grandchildren — from the money my grandpa made and invested over the course of his life — for tax purposes. Anytime I got a check, it went straight into that ING fortress to earn 4%.

Oh ING! Rest in peace, you bright orange godsend.

The unfairness of this should be evident. Yes, I worked hard. I saved. I made what turned out to be the tactical decision to fall in love and move in with a guy who was willing to work in corporate law for a while. I’ve even, at a couple points, been able to help out family members. But those family members were always able to pay me back. I never had to convert a “House Fund” to a “Funeral Fund,” the way Jones had to. And I had parents, as well as a grandmother, who were able to be there for me, instead of needing things from me.

The most recent This American Life episode, Status Update, discusses the Wealth Gap as well: how near impossible it can be to jump from one side of the chasm to the other and, at the same time, to compete with people for whom bridges are built. From the transcript:

Poor whites, a white person living in abject poverty, has roughly the same ability to borrow $3,000 in an emergency as a middle-class black person. That’s according to the largest national survey of consumer finance. If you compare Jennings, where Cori was, to white towns where people make the same amount of money?

In that income bracket, whites, on average, have five times the wealth as black households.

We don’t talk about this enough. Some of us are operating at a serious advantage. We can make good choices but still not deserve full — or perhaps even more than half — credit for our success.

Back to Jones, who lays out the figures with damning clarity:

Even Millennials making $75,000 or more said they had gotten money from their parents for basic necessities. Twenty percent of parents paid for their children’s groceries, and more than 20 percent contributed money for clothing. Even 20 percent of cohabitating Millennials still had a parent paying for expenses like cell phone bills, according to the poll. …

white Americans are five times more likely to inherit than black Americans (36 percent to 7 percent, respectively). And even when both groups received an inheritance, white Americans received about 10 times more. …

almost half of white Americans got money from a family source for a home down payment, while nine in 10 black Americans had to come up with their entire down payment on their own.

Do you have stories about having to liquidate assets to support relatives or handle emergencies? About feeling like you’ve benefited from, or been unfairly set back by, The System? Send them our way, to ester@thebillfold.com. We’d love to read them.

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