Millennials Earn 20 Percent Less Than Boomers Did At Same Stage of Life (usatoday.com)

According to a new analysis of Federal Reserve data by the advocacy group Young Invincibles, millennials earn 20 percent less than boomers did at the same stage of life, even though they are better educated. Their median household income is $40,581, and their home ownership rate is lower, while their student debt is drastically higher. USA Today reports: The analysis of the Fed data (PDF) shows the extent of the decline. It compared 25 to 34 year-olds in 2013, the most recent year available, to the same age group in 1989 after adjusting for inflation. Education does help boost incomes. But the median college-educated millennial with student debt is only earning slightly more than a baby boomer without a degree did in 1989. The home ownership rate for this age group dipped to 43 percent from 46 percent in 1989, although the rate has improved for millennials with a college degree relative to boomers. The median net worth of millennials is $10,090, 56 percent less than it was for boomers. Whites still earn dramatically more than Blacks and Latinos, reflecting the legacy of discrimination for jobs, education and housing. Yet compared to white baby boomers, some white millennials appear stuck in a pattern of downward mobility. This group has seen their median income tumble more than 21 percent to $47,688. Median income for black millennials has fallen just 1.4 percent to $27,892. Latino millennials earn nearly 29 percent more than their boomer predecessors to $30,436. The analysis fits into a broader pattern of diminished opportunity. Research last year by economists led by Stanford University's Raj Chetty found that people born in 1950 had a 79 percent chance of making more money than their parents. That figure steadily slipped over the past several decades, such that those born in 1980 had just a 50 percent chance of out-earning their parents. This decline has occurred even though younger Americans are increasingly college-educated. The proportion of 25 to 29 year-olds with a college degree has risen to 35.6 percent in 2015 from 23.2 percent in 1990, a report this month by the Brookings Institution noted.

Comments

I saw this story on a Fox affiliate

[rsilvergun]

and was surprised they covered it until they blunted the impact of the story by going on about how millennials eat out a lot and have lots of gadgets (read:cell phones). Just another Straw Man argument. I'm embarrassed to say I fell for it. I started to argue with their Straw Man trying to justify millennial's purchasing decisions until I realized that how they spend money has nothing to do with their declining wages.

It's amazing the lengths the media goes to these days to avoid acknowledging growing wealth inequality. Not really surprising when you consider who owns them. As always, follow the money...

I saw an article about why Chinese did better

[rsilvergun]

than other minorities in America. A study had controlled for family, education & environmental factors and found that, by and large, it was because for some reason they weren't constant victims of institutionalized racism. It had nothing to do with tough parenting and some nebulous "values". We just didn't shit on them like we do the blacks and Latinos. If I had to guess I'd say that's why those demographics are doing better. If nothing else we've made a lot of progress in that area.

Re:Is more education, better education . . . ?

[alvinrod]

I don't think college got any better or worse, it is primary and secondary education that seem far worse. At some point it became less and less acceptable to tell anyone they sucked or needed to get their shit together because it wouldn't fly. I think there are a larger number (there were always people like this, just fewer of them) of young people today who are completely incapable of coping with failure because they've never been challenged or had to face adversity. The system just rolled over for them and let them through no matter how poorly they did.

It's not just idiots (but there are still plenty of those) either, but also smart kids who just can't handle a challenge because everything got so dumbed down they've never had to rise above a really low bar. Eventually they hit college or the real world and suddenly find life turned up side down. Big fish in little ponds being suddenly lost in an ocean and there's no ribbon for trying your best if your best isn't good enough. Because it became unacceptable to hold anyone back, everyone ended up being held back.

Big education gets paid either way, so its surprising that they care as much as they do, but I suspect some of that comes down to enough people who want to be good educators working around the system. Some professors don't care much about that, but they might do some cutting edge research and cultivate the next generation of research professors so I suppose there's value there. Regardless, it's a mess in that some fields are so competitive in terms of available jobs that it makes little sense for some more expensive universities to have those programs because unless those students are already wealthy they shouldn't expect to be able to pay off the cost of their education for decades with current job prospects in those fields.

I don't think college is primarily to blame, and to some degree it's always been more of what you make of it than anything else, but I suspect they're starting to eat the shit sandwich that's been pushed through the education system and are probably passing the buck a little themselves. It probably varies by university and program though as colleges were always a bit of chaotic fiefdom and tenured faculty could always tell idiotic administrators to go piss up a rope when necessary. Maybe degrees did get watered down, but it probably isn't anywhere as much as people would like to think. Maybe you just work a company that can only attract C-level college talent and all the highly motivated 4.0 students aren't bothering to apply or interview there.

Re:Can you say "the american way" ?

[geoskd]

If you work hard, you will do better than your parents.

Both of my parents earned 6 figures in 1975. I have an equal level of education as they do, and am capable of doing the jobs that they were (and in one case still is) doing. I am in the same industry as them. I had an opportunity to go work for the company my father works for, but the starting salary would have been lower than my father was paid when he started there in '72. I have spent the last decade working 70+ hour weeks for a fortune 500 company and in the end, all I really got was fucked for the trouble (Fuckers eliminated my pension). I have quit and moved on, but I have yet to earn as much today as either of my parents were earning 40 years ago, in spite of working nearly the same number of hours as the two of them combined. Hard work is not rewarded in this country anymore, and hasn't been since before I entered the work force.

Get off my lawn

[SimonInOz]

Yes, indeed. When I left university, in 1976 with a UK degree in Computer Science (that's what it was called then), I was the first of a breed.
Employment was assured. I worked at Plessey for a few months, on the radar system for SE England (cool), then fled to the continent where I was paid quite astonishing amounts of money. First building a nuclear reactor monitor (even cooler), then a packet switching system for Holland (yup, that's the predecessor to our beloved Internet).
I made so much money [new sports car = 1 months disposable income] that after a few short years - ie when I was 25 - I took my money, bought an ocean going yacht and set off for a pretty decent adventure.
A couple of years later, I decided to stop (in USA), and ended up in Australia, still with enough money to pay for 1/3 of a house. (Houses were about 2-3 years salary at the time, really should have bought several).

So yup, I was definitely richer than today's poor kids, who get to leave university with huge debts, struggle to get an internship (otherwise known as slavery), then maybe, just maybe get a sensible job after a year of unpaid labour.
Then they might try to buy a house, now at 1 million dollars, 10 years salary (if you don't eat). Good luck with that. And have kids - can they afford to breed?

So they might have the internet, mobile phones, and great flat screen TVs, but they sure as heck aren't richer. I was way, way luckier with my timing.

Good post, I'd mod you up if I had points

[Okian Warrior]

One could argue that increased corporate tax rates and regulations have made it more difficult to start new businesses, and increases in health insurance costs (benefit packages are labor costs) thanks to Obamacare have made it more expensive to hire inexperienced workers. The government itself, i.e. The Democrat platform itself, is to blame.

Who knew that when you make it harder to run businesses, fewer people get employed (forcing them into part time work) and the average wage goes down?

You got modded to oblivion, but I think that's an insightful post. It suggests an alternate explanation without rancour.

We need to be able to say "the other side did this" without assigning blame and getting into name calling. I don't care what polarity (left or the right) the position is, so long as it's to our benefit.

Looking at your post, I note that the Democrats did, indeed give us Obamacare, it was widely advertised as being a good thing, and it's widely viewed as being a problem at this point in time.

Some ACA aspects were good - getting everyone insured and eliminating "pre-existing conditions" clauses among them - but the end result was a fiscal runaway that's causing a lot of grief among the people.

I note that Republicans (house *and* senate) have already voted to repeal the ACA without having a replacement on hand, and that will probably mean that we go back to pre-existing conditions, dropping coverage after an accident, and insurance companies charging whatever the hell they want.

Which is not at all a good thing, right or left.

Trump said he wanted to get rid of Obamacare and replace it, but he specifically said he wanted the replacement in place *first*. So now we're left to trust that he will do the right thing when the bill comes to his desk. That'll be a good test of his character. If he dumps Obamacare without a replacement and a lot of people lose insurance because of it, it would be a betrayal of our trust.

We really need to fix healthcare in this country. We're paying 6x as much as other countries, and only getting 3rd world care for it.

Re:way too generous

[BarbaraHudson]

It's only wealth retention when it can be converted to other assets. We're heading for another housing bubble bust as boomers try to sell their homes to the next generation who just doesn't have the money to purchase that particular asset, even at zero interest 30 year mortgages. Those assets will start depreciating damn fast over the next 15-20 years.

Re:Can you say "the american way" ?

[gweihir]

The modern work environment cannot reward hard work, because the type of work you can work hard at and increase productivity by that does not have a lot of worth anymore. The type of work that is actually valuable stops increasing in productivity around 30-40 hours a week, and productivity per week _drops_ after that. This has, incidentally, been known since the time of Henry Ford, since he and others at that time did research into how to get the most productivity out of their workers in order to maximize profits. Turns out that this peak is pretty much at 8h/day for 5 days of the week for manual labor and 6h/day for 5 days a week for mental work. For some types of mental work that requires a lot of insight, it is even lower. Now the really astonishing thing (at that time) is that if you work more, you produce less value _overall_. And the other astonishing thing is that the modern corporate world thinks these results are somehow not valid anymore, despite human nature not having changed much (if at all). This utter stupidity sucks the productivity right out of people.

Hence it is absolutely no surprise that you are getting nowhere at 70h per week. You have terrible efficiency and your time is not worth much per hour.

Re:But the median college-educated....

[Orgasmatron]

In the late 90s, my high school started a vocational program. We had always had welding, auto shop and wood shop, but those were one or two class introductions. The new course built houses. Starting from a vacant lot and a set of blueprints, the students cleared the vegetation, dug and poured the foundation, framed the house, insulated it, roofed it, sided it, installed the electrical and plumbing, installed flooring and sheet rock, painted the interior, landscaped the lot, installed appliances and sold it.

I still remember that a lot of adults were upset that the school would even consider that some kids might not want or need to go to college. 10 years later, most of the kids that were in the first two years of that program owned their own businesses - roofers, painters, carpenters, electricians, plumbers, landscapers, etc. Around the same time, people were starting to really wake up to the worthless degree + debt problem that the cult of college had caused.

Despite all this, people tried to get the program shut down every year for a while. The only thing saving it in the early years was that it was profitable for the school. I don't pay any attention to news from back home any more, but I wonder sometimes if the cultists were ever successful in getting rid of it.

Capitalism unleashed

[kleinesRaedchen]

What other major economic forces could account for this?

That one's easy. 1989/1990 also marks the end of the only large-scale, competing economic system to capitalism: socialism. Before, the stakeholders of capitalism had to prove that the masses benefit from it. This restriction is gone. Unrestricted capitalism benetfis capital, not people.

Re:Or it could be globalism

[BronsCon]

Meanwhile, I wasn't afforded the opportunity to put my life in the line for my country. Why? An ADHD (mis)diagnosis when I was 11. Why? Because any kid who's not doing their schoolwork must just not be paying attention; fuck the fact that I wasn't doing it as the year went by because I worked through all of my courses in the first couple months of the school year. It's not possibly anything to do with the fact that I was so focused, driven, and intelligent that I had already done the work by the time it was assigned and, instead, chose to occupy myself furthering my learning beyond where the school system wanted me to be at that point. No, the boomers in charge couldn't be assed to pay attention to what was really going on and, instead, labeled me as unable to focus, and lacking drive, though they did acknowledge my advanced intellignece.

Why? Because taking opportunities away from me and filing me away as a problem was easier than promoting my abilities.

And here's where I differ from most who shared my experience: I fought it. I took back the opportunities that were taken from me. At least, as much as possible; I still wasn't allowed to serve my country the way I wanted, despite being fully qualified to do so.