Despite being the largest and best-educated generation in the country, millennials are far worse off financially than baby boomers were, spelling out a troubling financial future for young people throughout their lifetime, according to a depressing new analysis from the advocacy group Young Invincibles.
After looking at 2013 Federal Reserve data for 25- to 34-year-olds and comparing it with the same age group back in 1989, the analysis found that millennials today are making a median income of around $40,000—a whopping 20 percent drop from what baby boomers were earning when they were just starting out. Baby boomers also had twice the number of assets that millennials have now.
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We’ve been seeing this trend develop in different ways over the past couple years—millennials are more burdened by student loans and less likely to own a home, choosing instead to move back in with their parents. Despite being well-educated, entering in to the job market during one of the worst recessions since the Great Depression has resulted in lower starting wages, which could lead to an overall stunted standard of living.
As far as solutions go, the analysis offered some suggestions to policymakers, like raising the federal minimum wage, offering paid family and medical leave, and providing more apprenticeships for middle-class jobs. The study also found that, despite how expensive it might be, college is still a good investment. College grads with student debt own homes at a higher rate than baby boomers did in 1989, and they are currently saving more for retirement than those without a degree, according to the study.
“By demonstrating the severe intergenerational declines impacting today’s young adults, we hope policymakers take up young adult financial security as a priority issue, and that these recommendations serve as a guide of how to level the playing field and offer basic social and economic protections in today’s economy,” the study says. “As the largest and most diverse generation in history, and a plurality of our workforce, the financial health of young adults is the financial health of the nation and will dictate our shared economic future.”
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