New Report Shows Millennials Make Less, Rent More, And Have Fewer Savings Than Did Boomers & Gen-Xers
This generation—the millennials—are worse off than their parents were at their age. This hasn’t happened since the Great Depression.
Why?
Years of incompetent trade policies that have undermined our industry and caused massive job loss.
The middle class was the first to suffer—now it’s our youth.
A new report compared the economic well-being of Americans aged 25-34 years old in 1989 and 2013—the results are sad (but not shocking).
Here are the highlights:
1. Millennials make 20% less than their parents did at their age.
In 1989, adults aged 25-34 made $50,910 on average (adjusted for inflation).
In 2013, they made only $40,581—20% less.
Of course this isn’t a new problem.
Real wages (adjusted for inflation) for the median American worker have actually declined since their peak in 1973.
This shouldn’t surprise anyone, given that real unemployment rate is over 13%, and that labor force participation is the lowest it’s been since the 1960s.
2. Fewer young people can afford to homes.
Millennials have trouble buying homes, due to immigration-fueled inflation in the cities.
Home ownership declined from 46% to 43% for young adults between 1989 and 2013.
This is actually symptomatic of the broader issue: the decline of purchasing power and real incomes.
In the below chart, you can see that the cost of housing is the main factor in declining discretionary spending—not just for millennials, but for all Americans.
The cost of housing has increased significantly faster than incomes over the last few decades (almost 50% faster).
3. Millennials have fewer assets & a lower net worth.
Holding assets is important: they provide you with tangible wealth which helps you access credit, which can be used to buy a house, start a business, or get a loan to take that vacation you always wanted.
Unfortunately, millennials, despite their high education and relatively difficult jobs, have accumulated significantly less wealth than their parents had at their age.
In 1989, the median assets held people aged 24-35 was $61,000.
In 2013, this had declined to $29,000—a whopping 52%.
The same thing happened with median net worth (which is the balance of assets and liabilities).
The median net worth declined from $25,000 to a paltry $11,000—56% lower.
And no, it’s not because millennials are lazy or weak—some are, but hey, don’t forget about all the hippies in the boomer generation.
People are working faster than ever before, but it’s just not translating into better incomes like it used to—the whole economy is slowing.
Why are millennials worse off than boomers?
It’s not complicated.
America’s economy is broken—many of our middle class, industrial jobs have been offshored to places like China and Mexico.
Offshoring hurts American workers in 3 main ways:
1. We lose good-paying jobs to foreign competition.
2. The threat of offshoring, combined with a larger pool of workers, depresses wages.
3. We lose the jobs that depended upon anchor industries (eg. no factory, no hairdresser or accountant).
If you want to know exactly how offshoring works, and how it impacts America read the linked article—it’s worth your time.
Select Sources:
Allison, Tom. “Financial Health of Young America.” Young Invincibles, Jan 2017. Accessed January 15, 2017.
Desilver, Drew. “For Most Workers, Real Wages have Barely Budged for Decades.” Pew Research Center (2014).
Federal Reserve Bank of St. Louis. “Average Hourly Earnings of All Employees: Total Private, Jan 1964- Oct 2016.” Accessed Nov 20, 2016.
United States Census Bureau. “Income and Poverty in the United States: 2014.” Accessed May 28, 2016.
