Millennials make 20 percent less than their parents — and it’s killing the American dream
A new report published Friday says the same thing previous studies have said about the financial outlook for young Americans: It’s not great.
Published by Young Invincibles, a group initially formed in 2009 to amplify young people’s concerns about health care, the report found that workers who were aged 25 to 34 in 2013 are significantly worse off than their parents were at that age. Young adult workers today earn a median of $40,581 a year, which, adjusted for inflation and using today’s dollars, is about $10,000 less than young workers earned in 1989, a decline of 20 percent.
The story is, not surprisingly, similar when it comes to wealth. Millennials now own only half the amount of assets that baby boomers did when they were young adults.
The findings are consistent with recent academic research describing the decline in opportunities for young Americans. In a paper published last year, Stanford economist Raj Chetty reported that on average half of people born in the mid-1980s earn more than their parents did at age 30. By comparison, 70 percent of people born in 1955 earned more than their parents did by the age of 30.
Young adults today with a college degree and student debt earn a median income of $51,000 annually, which is 25 percent less than comparable young people in the late ’80s. (For college graduates without student loans, the decline has been smaller, at 18 percent.) The study found that the average cost of yearly tuition at public four-year colleges in 1989 was about $3,500 in today’s dollars. For young people now, it’s about $9,500.
“Decline in the young generation’s financial security,” said Tom Allison, the report author and deputy director of policy and research for Young Invincibles, “is a decline in the nation’s security.”