I don’t know about you but I’ve seen my fair share of articles talking about how millennials are broke young adults who can’t save enough money to pay off student loans and, as a result, are delaying marriage, home ownership, and having children.
Ultimately, the thing that drives capitalist economies is the question, “What’s in it for me?” Time is money and we often sacrifice one for the other. You’ve probably seen the following graph from Business Insider, published using data from 2014:
These numbers strike me as low but compared to what? One-dimensional statistics give no context. There is also no mention of whether this information is household data or single income data. So I pulled up the St. Louis FRED Economic Data tool, sourced from the U.S Bureau of the Census, and found that the real (inflation-adjusted) median personal income for 2014 was $28,790.
This doesn’t sound so bad. Millennials aren’t tracking very far below the national income, especially considering that most of us are only a few years into our careers with decades to go. The Business Insider story doesn’t specifically state education level, industry, or other variables which are often considered, but this is a blog and not an academic journal.
Lets put this into historical context now. Luckily, Business Insider did this as well. The following chart compares median weekly earnings in every year from 1979 to 2013, measuring the young professionals age group (25-34 years of age) to all workers over the age of 25.
For the most part, young adults have seen more extreme movements compared to all workers, to the surprise of nobody. Since 2002, young adult median income has been on a downtrend except for a couple of years of nearly-flat wages and one spike in 2008.
This negative change, year in and year out, does not bode well for the new generation of consumers.
When discussing millennials and income/net worth, no conversation is complete without mentioning college degree attainment and student debt. That’s another train of thought for another time but remember that we’re seeing the highest level of student debt while facing decreasing wages.