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.