Millennials are regularly maligned as lazy, avocado toast-loving hipsters, but according to a co-founder of Opendoor — and a new study — the generation is instead plagued by a “debt machine” that puts them at a huge economic disadvantage compared to older generations.

Jd Ross

Jd Ross, the 28-year-old co-founder of the ibuying heavyweight, pushed back against the “lazy millennial” narrative Thursday morning in a tweet, saying that after the recession “gutted a generation’s savings,” millennials were loaded up with “student debt for valueless degrees to pay for university bureaucrats.”

“Now nobody has money and it is going to slowly crush our economy,” Ross continued in the tweet.

The comments were a response to a new study from the Federal Reserve that found millennials have similar consumption preferences to their predecessors, yet remain “less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth.”

The study defined millennials as people born between 1981 and 1997.

In a conversation with Inman Thursday morning, Ross — who has recently moved into a consulting role at Opendoor — said many millennials are economically hamstrung in college, when they take on significant debt earning degrees that may not correlate “with your ability to create value in a company.” He described the process as a “credentialing machine” that functions as a “debt engine” for Americans in their 20s and 30s.

And it has lasting consequences.

“It prevents them from taking on riskier jobs or roles where they might have to invest a little longer,” Ross argued.

The Fed’s report bears this out, revealing that student debt is more common among millennials than it was among Generation X at an equivalent point in that generation’s life. Millennials also owe larger amounts of money.

“The average student loan balance for millennials in 2017 was more than double the average loan balance for Generation X members in 2004,” the report states.

Ross said that means it can take millennials decades before they start amassing any kind of savings. And it impacts the housing market as fewer and fewer young Americans can afford to own homes — which is traditionally how people build wealth.

“We’ve shifted to a rental economy where more and more of the housing stock is rentals and not home ownership,” Ross added.

Millennials’ dire financial straights have been the subject of considerable study and debate in recent years, with perhaps the most alarming findings suggesting that the generation may simply never recover.

Ross was less pessimistic, saying he’d like to see some type of structural reform to correct the problem. But he also reiterated that as things currently stand, millennials face a much bleaker economic future than their predecessors.

“In previous generations, you’re at least starting from zero,” he said. “But today, millennials are starting out in the negative.”

Email Jim Dalrymple II

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