Despite being more educated than past generations, millennials now make 20 percent less than Baby Boomers did at the same age.
The report
Young Invincibles, a group that focuses on issues related to health care, higher education and economic security, published a report on this discrepancy in January.
The press release said that young adults, ages 18 to 34, are notably worse off than their parents were at the same age.
Millennials now earn $10,000 less than Boomers did in 1989, which is around 20 percent less after adjusting for inflation. Young adults today also own half as many assets and have accumulated half as much net wealth as their counterparts did in 1989.
When looking at millennials in terms of race, white millennials have seen their median income fall more than 21 percent since 1989, settling around $47,688 in recent years. Median incomes for black millennials dropped 1.4 percent to $27,892, and median wealth for black millennials declined a third since 1989. Latino millennials saw their incomes increase by about 29 percent in the same time span, and they currently earn about $30,436.
These median incomes also are influenced by wage gaps between races. As the Young Invincibles’ report states, “young African Americans and Latinos earn 57 cents and 64 cents respectively for every dollar earned by young whites.”
Educated and underpaid
This decline in median wealth is especially surprising because millennials are the most educated generation. In 2016, 40 percent of millennial workers, ages 25 to 29, had at least a bachelor’s degree. This statistic is significantly higher than the 26 percent of Baby Boomers that were college graduates in 1985.
College isn’t paying off as much as expected, either. In 2013, the average college graduate earned an income that was equivalent to the income of a high school graduate in 1989. The cost of attending college also has increased since the 1980s, and the average millennial now has twice as much student debt as the previous generation did.
Young workers now earn a median of $40,581 a year, but that income still lags behind the cost of living.
Takeaway
The fact that wages aren’t keeping up with the cost of living isn’t shocking, but it’s causing many problems. Home ownership for millennials has dropped 3 percent since 1989, and many millennials are struggling with the cost of living. Millennials also are responsible for about a third of U.S. consumer debt — about $1.1 trillion out of the U.S.’ $3.6 trillion.
Though millennials often are deemed impatient or ungrateful, there’s no way to dispute that their generation has been given the short end of the economic stick.
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