TL;DR: The “decline of the American Dream” is overstated. A new Federal Reserve generational-income study shows that Millennials are not worse off than Gen X or Boomers at the same age. College still pays, household incomes keep rising generation over generation, and family life isn’t economically impossible—just more uneven and delayed. Progress has slowed, not reversed.
Key Points:
Millennials (age 36–40) earn 18% more than Gen X at the same age
Every education group earns more than the same group in the previous generation
Post-tax household income has risen for every generation
College returns still exceed costs by a wide margin
Modern pressures (housing, childcare, inequality) drive perceived stagnation—not actual decline
Bottom Line:
The American Dream hasn’t died. It’s simply become slower, more unequal, and more psychologically demanding than it used to be—but still reachable.
For more than a decade, the dominant story about American life has been one of decline.
College is supposedly a bad investment.
Millennials are “the first generation to be poorer than their parents.”
Marriage, kids, and homeownership are framed as luxuries reserved for the wealthy.
These ideas feel true. They travel quickly. They make for sticky headlines.
There’s just one problem.
The numbers don’t back them up.
A new 2024 Federal Reserve study, combined with decades of mobility research, shows that the American Dream hasn’t died. It hasn’t even reversed. It has simply slowed—and changed shape.
Below, I’ll walk through the three myths shaping today’s economic anxiety, and what the data actually says.
Myth #1: “College No Longer Pays.”
This is the most viral belief of our era. If you hang around TikTok, Reddit, or certain corners of Twitter, you’ll hear that college is a scam designed to trap young people in debt.
Here’s what the Fed researchers found when they looked at adults aged 36–40—the age when careers usually stabilize:
Every educational group earns more than the same group in the previous generation.
Boomers with BAs made more than Silents.
Gen Xers made more than Boomers.
Millennials made more than Gen X.
The growth rate has slowed, yes. But it hasn’t stopped, and it certainly hasn’t reversed.
And the kicker?
The extra tuition Millennials paid equals about three years of additional lifetime earnings.
That’s it. Three years for a 40-year payoff.
Add in mobility research from the past 40 years and you get a consistent conclusion: education remains the strongest engine of upward mobility in America.
So why does the myth survive?
Because the worst stories—$200K debt, unemployment, mismatched majors—go viral. The typical outcomes do not.
Myth #2: “Millennials Are Worse Off Than Previous Generations.”
This one might be the most emotionally powerful narrative of all.
The charts circulate constantly: wages flat, prices up, Boomers buying homes for the price of a bicycle.
But the Fed’s generational-income study delivers a clean, devastating counterpoint.
After adjusting for:
inflation
taxes
transfers
household size
age
…the results are unambiguous:
Millennials are earning more than Gen X and Boomers did at the same age.
Here’s the comparison at ages 36–40:
Boomers: +27% over Silents
Gen X: +16% over Boomers
Millennials: +18% over Gen X
The American Dream didn’t vanish—it decelerated.
This also fits what mobility researchers like Raj Chetty have shown: the distribution of income has gotten more unequal, but the typical standard of living continues to rise. Millennials face more inequality, not lower living standards.
So why does it feel so much worse?
Housing prices did outpace incomes.
Healthcare and childcare are more expensive.
Inequality makes the peaks look impossible to reach.
Social media amplifies the dissatisfaction.
But dissatisfaction isn’t the same as destitution.
The math is clear: Millennials are not a lost generation. They’re a squeezed generation.
Myth #3: “Marriage and Kids Are Financially Impossible.”
This myth taps into something deeper than economics—it taps into identity, meaning, and adulthood.
More young people truly feel that family life is beyond reach.
Yet when the Fed compares household incomes—because families run on pooled resources—the trend flips.
At age 36–40:
It still pays to couple up.
Gen X households are richer than Baby Boomers.
Millennial households are richer than Gen X.
After taxes and transfers, Millennials have 15–19% more real income than the prior generation.
Meanwhile, mobility research shows that stable two-parent households remain one of the strongest predictors of upward mobility for children.
Marriage isn’t expensive—it’s financially stabilizing.
Kids aren’t unaffordable—they’re part of a life stage increasingly delayed, not deleted.
The pressures are real, but the narrative is exaggerated.
So What’s Really Going On?
If you zoom out, the story of American generational progress looks like this:
✅ 1940s–1970s: Rocketship growth
Broad gains. High mobility. Low inequality.
✅ 1980s–2000s: Slowing climb
Growth continues but becomes more unequal.
✅ 2000s–2020s: Anxiety era
Incomes still rising. Costs rising faster in key areas.
Perceived stagnation outpaces actual stagnation.
The American Dream isn’t dead.
It’s slower, uneven, more competitive, and psychologically heavier than it used to be. But in real, inflation-adjusted, post-tax terms, each generation has gotten richer than the last.
That’s not decline.
That’s transformation.
Why This Matters Right Now
But here’s the real danger: the myths themselves have consequences.
If young people believe college doesn’t pay, fewer will pursue higher education—hurting mobility.
If they believe family life is financially impossible, they’ll delay or avoid it—reshaping society unintentionally.
If they believe they are doomed, it becomes harder to make long-term plans, take risks, or build wealth.
Pessimism is self-fulfilling.
And the Fed’s research is a quiet reminder that the American Dream hasn’t vanished.
It has simply changed—and it’s still reachable.
If this challenged your assumptions, share it.
Medium thrives on conversation, and this is a conversation worth having.
Are the myths fading? Are they strengthening?
Does the data surprise you?
👇 I’d love to hear your thoughts in the comments.