Millennials are on shaky ground, struggling to gain the same financial security afforded to their parents, new data analysis suggests.
When baby boomers were young adults, their net worth was double that of today’s young people, who earn $10,000 less than their counterparts did in 1989, according to findings from advocacy group Young Invincibles. Its analysis of Federal Reserve data comparing 25- to 34-year-olds in 2013 and 1989 after adjusting for inflation confirms what many already suspected: The American dream has slipped out of reach for the country’s largest generation.
“Our findings show that we’re not seeing a ghost. It is harder to get ahead in America today,” principal investigator Tom Allison said.
The report points to declining wages and student debt as key factors. For boomers in 1989, the average tuition at four-year public colleges was $3,454 in today’s dollars, the study found. Today, that figure has risen to $9,410.30.
Millennials who entered the workforce in the wake of the Great Recession still feel the sting. Early career income often lays the foundation for lifetime earnings; the study found that 1 million young adults who experienced long-term unemployment during the recession will collectively miss out on income equaling $22,000 per person in the next decade.
“Entering the workforce during a recession can haunt someone’s income. You enter the workforce, and you start at a lower rung,” Allison said.
The analysis echoes the takeaways of a collective study by Harvard, Stanford and UC Berkeley last month, which found that only half of millennials earn more than their parents.
The new research delves into the racial wage gap among millennials. Though the generation is the nation’s most diverse, racial and ethnic income disparity is striking. The study found that young white Americans outpace African Americans and Latinos in earnings by $20,000 and $17,000, respectively.
The report suggested policies that would strengthen the social safety net for young adults, including Earned Income Tax Credit and housing policy reform.
“President-elect Trump and the new congress is going to have to demonstrate their commitment to expanding economy for young people,” Allison said. “This isn’t just a young adult problem, this is an American problem.”