It Doesn’t Pay To Be A Millennial

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Danielle Kurtzleben explains why more education hasn’t meant higher incomes:

The Census Bureau [on Thursday] released new data from its American Communities Survey, showing that today’s 18-to-34-year-olds are earning less today than the same age group in 1980, 1990, or 2000. …

[E]veryone thinks of college as the ticket to prosperity, so America’s young people have increasingly invested in college degrees. And it’s true that those graduates are doing way better than those without degrees, both in terms of income and employability. But it’s mostly paying off because the economic situation just keeps getting worse for people with only a high school diploma. For millennials, this means investing four or more years, plus tens of thousands of dollars, to get a degree whose value isn’t really increasing much. The whole generation has been stuck on a sort of cruel economic treadmill: working harder and harder without really getting much further ahead.

Derek Thompson also absorbs the Census findings:

In retail, wholesale, leisure, and hospitality—which together employ more than one quarter of this age group—real wages have fallen more than 10 percent since 2007.

To be clear, this doesn’t mean that most of this cohort are seeing their pay slashed, year after year. Instead it suggests that wage growth is failing to keep up with inflation, and that, as twentysomethings pass into their thirties, they are earning less than their older peers did before the recession. …

Why are real wages falling across so many fields for young workers? The Great Recession devastated demand for hotels, amusement parks, and many restaurants, which explains the collapse in pay across those industries. As the ranks of young unemployed and underemployed Millennials pile up, companies around the country know they can attract applicants without raising starter wages.

But there’s something deeper, too. The familiar bash brothers of globalization and technology (particularly information technology) have conspired to gut middle-class jobs by sending work abroad or replacing it with automation and software. A 2013 study by David Autor, David Dorn, and Gordon Hanson found that although the computerization of certain tasks hasn’t reduced employment, it has reduced the number of decent-paying, routine-heavy jobs. Cheaper jobs have replaced them, and overall pay has declined.