Economic Forces Working Against Millennials
Millennials are the most educated generation in American history. On the surface, that seems like a good thing. But college and grad school cost money -- increasingly insane amounts of money. The price of attending a public four-year college rose 54 percent from 1998 to 2008 while the typical American household earned less in 2008 than it did a decade earlier, adjusted for inflation [sources: College Board, Leonhardt]. Therefore, to pay for the education touted by parents, teachers and the government as critical to future success, millennials took on massive debt, a record-breaking $35,200 on average for each 2013 U.S. college graduate [source: Ellis].
Student debt isn't necessarily a bad thing if there are well-paying jobs waiting for college graduates. Oops! Millennials had the poorly timed misfortune of graduating in the middle of the worst economic collapse since 1929. The Great Recession forced companies to downsize or at least stop hiring. The U.S. unemployment rate went from 4.4 percent in 2007 to a crippling 10 percent in 2009 and remains more than 7 percent in 2013 [source: Bureau of Labor Statistics]. When jobs become scarce, competition gets fierce. Millennials fresh out of college have to compete with applicants who have 10 years of experience but are willing to take lower-paying jobs out of desperation.
But this is only a blip, right? Statistics show that the economy is slowly improving, and unemployment numbers are slowly falling. Can't millennials make up for lost income? Not according to the experts. Yale economist Lisa Kahn found that people who graduated from college during the deep recession of the early 1980s earned $100,000 less over the next 20 years than their older and younger colleagues [source: Thompson]. That early unemployment spike and wage decrease scarred them for life.
But perhaps the biggest economic forces working against millennials -- and younger Generation Xers, too -- are income stagnation and the wealth gap. From 1950 to 2000, the average household income of American families steadily rose. From 2000 to 2010, when many millennials entered the workforce, median household incomes fell for the first time since World War II [source: Leonhardt]. It's hard to make more money than your parents when jobs are paying less for the same work. (Insult to injury: Worker productivity is up 37.6 percent since 1995, but median real wages only rose 9.6 percent [source: Reeve]).
The wealth gap between older and younger people has also widened significantly over the past 30 years. A 30-year-old in 2013 is worth 21 percent less than a 30-year-old in 1983. Meanwhile, the net worth of the average 60-year-old today is more than twice as high as 1983 [source: Lowrey]. In other words, young people keep getting poorer, while old folks get richer. Demographers point to skyrocketing college tuition for younger generations, higher unemployment, sinking home values and middle-class income stagnation [source: Yen].
These broad economic trends have nothing to do with narcissism, entitlement or Twitter. But taken together, they add up to ballooning debt, fewer well-paying jobs for college graduates and bleak long-term career prospects for millennials. Wouldn't you move into your parents' basement, too?
Keep reading for a glimmer of hope.