Millennials earn 20% less than Boomers did at same stage of life
Edit: Sorry, wrong thread
(edited 6 years ago)
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Original post by Mathemagicien
With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles.
Increased education delays the start of significant levels of earning.
I finish university at age 22. There's no way I'm be in a position to buy a house at 25.
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Original post by Moonstruck16
I finish university at age 22. There's no way I'm be in a position to buy a house at 25.
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Yes but boomers could have
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The situation is bleak there are a few benefitting fron parents getting a cheap mortgage 30 years ago that They still have but à lot more people cant afford the basics.
Original post by Mathemagicien
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.
I'd argue the decline is partly occuring because young Americans are increasingly college educated. We all know a significant proportion of uni students are studying utterly useless **** that has no practical applications in the real world.
Original post by Maker
Boomers usually started work at 16 or 18 and mostly lived at home and did not have any university debts. If Millenials had done the same, they would probably be in the same position as boomers.
Not if the rise in wages is outpaced by rising housing prices. Then you would be in a situation you have today. I think Piketty spent 700 pages proving just that point.
The only useful thing I will contribute is that a documentary on Channel 4 quite a while back now pointed out the following...
"If average wage growth had increased with average house price inflation, then the average salary today would be £84,000 and not £28,000."
And that's the problem in a sentence.
Some young people save aggressively for a deposit, this means their consumption levels are very low in the economy which leads to stagnation. This makes the cycle worse as it leads to economic growth and wage stagnation. This is especially the case as this demographic would have previously spent a large proportion of disposable income.
The other issue is of course that the Bank of England does not include house price inflation in its standard inflation figures (which in my opinion is absolutely crazy). If they did, interest rates would certainly be much, much higher and house prices would be far, far lower. Just imagine if house prices only grew at 2-4% on average. The high interest rates to control house prices would also make it easier for people to save, allow businesses to make extra money on cash flow and also lower prices since businesses also face extortionate real estate costs. It would also stop pensioners using real estate as an income source. People say it's a supply-side issue and that's true but the primary factor without doubt is the cheap availability of credit which is leading to a rationing of housing in the UK.
Of course, this is just one problem of many as to why our generation is worse off. But for me, the absolute biggest issue our generation faces is being caused by consistent low interest rates.
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"If average wage growth had increased with average house price inflation, then the average salary today would be £84,000 and not £28,000."
And that's the problem in a sentence.
Some young people save aggressively for a deposit, this means their consumption levels are very low in the economy which leads to stagnation. This makes the cycle worse as it leads to economic growth and wage stagnation. This is especially the case as this demographic would have previously spent a large proportion of disposable income.
The other issue is of course that the Bank of England does not include house price inflation in its standard inflation figures (which in my opinion is absolutely crazy). If they did, interest rates would certainly be much, much higher and house prices would be far, far lower. Just imagine if house prices only grew at 2-4% on average. The high interest rates to control house prices would also make it easier for people to save, allow businesses to make extra money on cash flow and also lower prices since businesses also face extortionate real estate costs. It would also stop pensioners using real estate as an income source. People say it's a supply-side issue and that's true but the primary factor without doubt is the cheap availability of credit which is leading to a rationing of housing in the UK.
Of course, this is just one problem of many as to why our generation is worse off. But for me, the absolute biggest issue our generation faces is being caused by consistent low interest rates.
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(edited 7 years ago)
If someone started working at age 18 takes home £10,000/a and lived at home so their outgoings are low, they could save £5000 per year. By the time they are 25, they could have £35,000 as a deposit on a house and have no student debts.
Compare to a university graduate who worked for 3 years but has a mountain of student debt and probably has to live away from home so pays rent could save a lot less and would not have anywhere near the savings of someone who started work at 18.
Compare to a university graduate who worked for 3 years but has a mountain of student debt and probably has to live away from home so pays rent could save a lot less and would not have anywhere near the savings of someone who started work at 18.
Original post by Maker
If someone started working at age 18 takes home £10,000/a and lived at home so their outgoings are low, they could save £5000 per year. By the time they are 25, they could have £35,000 as a deposit on a house and have no student debts.
Compare to a university graduate who worked for 3 years but has a mountain of student debt and probably has to live away from home so pays rent could save a lot less and would not have anywhere near the savings of someone who started work at 18.
Compare to a university graduate who worked for 3 years but has a mountain of student debt and probably has to live away from home so pays rent could save a lot less and would not have anywhere near the savings of someone who started work at 18.
Yes but you'd need a bank to lend you an earnings multiple of 20x. No bank will lend you anything on £10,000 per year unless when you have an insanely high deposit when the average house price is £200,000 per year (and that average price is really just a starting price for a lot of areas).
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I'd like to believe this but I don't. You might be right career wise but Kids today earn £7.50 an hour from basic jobs, my parents and older people always tell me about how badly paid they were as teens like £2 an hour.
It's also simple Labour Market forces, supply and demand. Too many are educated, everyone has a degree for things like "events management", where's the line? Where do you say, sorry you can't have a degree. Because it's like the circulation of them has inflated so much it's not even worth much. You can bet people will argue immigration plays a huge part in it.
It's also simple Labour Market forces, supply and demand. Too many are educated, everyone has a degree for things like "events management", where's the line? Where do you say, sorry you can't have a degree. Because it's like the circulation of them has inflated so much it's not even worth much. You can bet people will argue immigration plays a huge part in it.
Original post by Maker
If someone started working at age 18 takes home £10,000/a and lived at home so their outgoings are low, they could save £5000 per year. By the time they are 25, they could have £35,000 as a deposit on a house and have no student debts.
Compare to a university graduate who worked for 3 years but has a mountain of student debt and probably has to live away from home so pays rent could save a lot less and would not have anywhere near the savings of someone who started work at 18.
Compare to a university graduate who worked for 3 years but has a mountain of student debt and probably has to live away from home so pays rent could save a lot less and would not have anywhere near the savings of someone who started work at 18.
Again, you are making an argument from savings, which is based on wages. Wages simply have not kept up with the rise in housing prices. If a millennial today followed a boomer lifestyle, he would not be able to afford a house. Especially in places like Oxford or London.
This index shows the rise in average housing prices since 1986.
http://cdn.tradingeconomics.com/charts/united-kingdom-housing-index.png?s=unitedkinhouind&v=201701090844r&d1=19170101&d2=20171231
We are looking at 6 times the increase whereas real median wages haven't even doubled and in fact, the trend is downward right now.
(edited 7 years ago)
Original post by Mathemagicien
With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles.
The analysis being released Friday gives concrete details about a troubling generational divide that helps to explain much of the anxiety that defined the 2016 election. Millennials have half the net worth that boomers had when boomers were their age. Their home ownership rate is lower, while their student debt is drastically higher.
The generational gap is a central dilemma for the incoming presidency of Donald Trump, who essentially pledged a return to the prosperity of post-World War II America. The analysis also hints at the issues of culture and identity that divided many voters, showing that white millennials — who still earn much more than their blacks and Latino peers — have seen their incomes plummet the most relative to boomers.
The analysis of the Fed data 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 from 46% in 1989 to 43% today, 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. Yet white millennials have seen their median income tumble the most, by more than 21 percent to $47,688, while the 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.
http://www.usatoday.com/story/money/2017/01/13/millennials-falling-behind-boomer-parents/96530338/
A country where the next generation is doing worse than their parents is the definition of a country in decline. And its not just the US; this is mirrored in the UK, Australia, and many European countries too.
The analysis being released Friday gives concrete details about a troubling generational divide that helps to explain much of the anxiety that defined the 2016 election. Millennials have half the net worth that boomers had when boomers were their age. Their home ownership rate is lower, while their student debt is drastically higher.
The generational gap is a central dilemma for the incoming presidency of Donald Trump, who essentially pledged a return to the prosperity of post-World War II America. The analysis also hints at the issues of culture and identity that divided many voters, showing that white millennials — who still earn much more than their blacks and Latino peers — have seen their incomes plummet the most relative to boomers.
The analysis of the Fed data 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 from 46% in 1989 to 43% today, 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. Yet white millennials have seen their median income tumble the most, by more than 21 percent to $47,688, while the 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.
http://www.usatoday.com/story/money/2017/01/13/millennials-falling-behind-boomer-parents/96530338/
A country where the next generation is doing worse than their parents is the definition of a country in decline. And its not just the US; this is mirrored in the UK, Australia, and many European countries too.
The baby boomer generation is the true 'me me me' and entitlement generation.
"A country where the next generation is doing worse than their parents is the definition of a country in decline."
Original post by Anfanny
parents getting a cheap mortgage 30 years ago.
a cheap house, you mean. Mortgages were stratospheric in comparison to now.
This is taken from a discussion about the same thing with good points.
"You forgot that most boomers didn't need secondary education. They could raise a family on a single income working a job with a high-school diploma.
With a ****ing pension.
Like, holy ****."
"This is a big factor. My dad walked into a GE plastic plant when he was 18. They trained him to do some chemistry related things. (I dont know the specifics) made $80,000 a year. The same job they wont hire for now unless a person has a masters degree. My dad wasnt some genius. Just a normal dude with common sense."
"Baby boomers are easily the most entitled, spoiled, and selfish generation in history. They had cheaper education, their minimum wage could be a livable wage, and many of them garnered significant wealth.
But, that wasn't enough. They wanted more. So, they cut their own taxes to historically low levels and gave themselves even more benefits (2003's Medicare Part D, for example) which have helped to explode the debt. They reaped all of the benefits of all the social programs that their parents left them while refusing to leave their kids (us) something as basic as universal healthcare that the rest of the civilized world enjoys.
Oh, but it gets better. They insist on cutting both social programs and education for the following generations because they refused to pay the appropriate amount of taxes to pay for all of their benefits. For all the debt they incurred through stupid wars, benefits for themselves, etc...we and the next couple of generations are likely going to pay for it with higher taxes across the board than they would've had to pay due to interest piling up. Sooner or later, debts will have to be paid back or at least more and more money will go towards the debt. (By the way, without a suitable replacement, repealing Obamacare will cost about $350 BILLION now and accumulate to around 9 TRILLION over 10 years).
The thing about tax cuts: They aren't free and most of the tax cuts go to the already super wealthy who just stash it away without using it to better the economy. On top of significantly higher taxes, even more cuts to education and social programs will have to be made to make up for all of those years of lost revenue since they refuse to pay for what they spent.
We really need to reclaim the mantle of 'fiscal responsibility' (yeah, that mantra they like to beat over our heads as they **** more **** up for us financially) from our idiot parents."
"You forgot that most boomers didn't need secondary education. They could raise a family on a single income working a job with a high-school diploma.
With a ****ing pension.
Like, holy ****."
"This is a big factor. My dad walked into a GE plastic plant when he was 18. They trained him to do some chemistry related things. (I dont know the specifics) made $80,000 a year. The same job they wont hire for now unless a person has a masters degree. My dad wasnt some genius. Just a normal dude with common sense."
"Baby boomers are easily the most entitled, spoiled, and selfish generation in history. They had cheaper education, their minimum wage could be a livable wage, and many of them garnered significant wealth.
But, that wasn't enough. They wanted more. So, they cut their own taxes to historically low levels and gave themselves even more benefits (2003's Medicare Part D, for example) which have helped to explode the debt. They reaped all of the benefits of all the social programs that their parents left them while refusing to leave their kids (us) something as basic as universal healthcare that the rest of the civilized world enjoys.
Oh, but it gets better. They insist on cutting both social programs and education for the following generations because they refused to pay the appropriate amount of taxes to pay for all of their benefits. For all the debt they incurred through stupid wars, benefits for themselves, etc...we and the next couple of generations are likely going to pay for it with higher taxes across the board than they would've had to pay due to interest piling up. Sooner or later, debts will have to be paid back or at least more and more money will go towards the debt. (By the way, without a suitable replacement, repealing Obamacare will cost about $350 BILLION now and accumulate to around 9 TRILLION over 10 years).
The thing about tax cuts: They aren't free and most of the tax cuts go to the already super wealthy who just stash it away without using it to better the economy. On top of significantly higher taxes, even more cuts to education and social programs will have to be made to make up for all of those years of lost revenue since they refuse to pay for what they spent.
We really need to reclaim the mantle of 'fiscal responsibility' (yeah, that mantra they like to beat over our heads as they **** more **** up for us financially) from our idiot parents."
Original post by Mathemagicien
u heard of inflation bro?
http://www.bankofengland.co.uk/education/Pages/resources/inflationtools/calculator/default.aspx
For example, the Bank of England says that £2 in 1970 would be worth £27.91 in 2015.
http://www.bankofengland.co.uk/education/Pages/resources/inflationtools/calculator/default.aspx
For example, the Bank of England says that £2 in 1970 would be worth £27.91 in 2015.
It must've been £2 a day then lol. Anyway, working in a shop was underpaid so much. My grandma said back in the 1950's her rent was 50p a week, soon 50p won't even buy me a freddo, which is why I support deflation! 👍🏼
TBH the only way the problem is gonna get fixed is when nearly all the baby boomers die and they can't affect the votes. We need to make sure we leave something for our kids and future generations but our generation is gonna have to work together to fix the economy and other problems (climate change etc). Maybe we'll go down as a great generation who had to go through the brunt of things to fix stuff for the future generations.
We also need to deal with the 1% properly and stop the privatisation that's happening.
One more thing:
Note this paragraph:
The declining fortunes of millennials could impact boomers who are retired or on the cusp of retirement. Payroll taxes from millennials helps to finance the Social Security and Medicare benefits that many boomers receive — programs that Trump has said won't be subject to spending cuts. And those same boomers will need younger generations to buy their homes and invest in the financial markets to protect their own savings.
This is what will cause the impending real estate crash. And it'll be bigger than 2008. It'll happen, mark my words.
We also need to deal with the 1% properly and stop the privatisation that's happening.
One more thing:
Note this paragraph:
The declining fortunes of millennials could impact boomers who are retired or on the cusp of retirement. Payroll taxes from millennials helps to finance the Social Security and Medicare benefits that many boomers receive — programs that Trump has said won't be subject to spending cuts. And those same boomers will need younger generations to buy their homes and invest in the financial markets to protect their own savings.
This is what will cause the impending real estate crash. And it'll be bigger than 2008. It'll happen, mark my words.
Liberals love to complain about stuff like this but they don't actually have a solution that doesn't involve forcing companies to pay more and reduce profits, or building millions of council houses.
The fact is you can still earn more than these 'boomers' if you work hard enough and get into the right jobs. The opportunities are better now than ever before, with new industries like data science and software engineering opening up new lucrative career possibilities. As well as this, everyone has the chance to go to university and improve their skillset. Don't kid yourself- things are much better for us than they were for the baby boomers.
The fact is you can still earn more than these 'boomers' if you work hard enough and get into the right jobs. The opportunities are better now than ever before, with new industries like data science and software engineering opening up new lucrative career possibilities. As well as this, everyone has the chance to go to university and improve their skillset. Don't kid yourself- things are much better for us than they were for the baby boomers.
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