The above contains a comparison of how 25-34 year old people were doing in 1977 versus 2016 (i.e. boomers and millennials). Dollars are inflation-adjusted.
Median income for 25-34 year old people today is $34k, the same as it was in 1977, but 37% of today’s 25-34 year old people attended 4+ years of college, compared to 24% in 1977. But today’s 25-34 year old people faced $20k cost of public four year college, versus $8k in 1977. Perhaps as a result of having a higher cost of education to reach the same early career earnings, today’s 25-34 year old people have median debt of $33k, versus $10k in 1977, and only 39% own homes today, compared to 48% in 1977, and only 47% have married, compared to 80% in 1977.
The page also notes that “92% of 30-year-olds in 1970 earned more than their parents at that age, according to a 2016 study led by Raj Chetty, a Stanford economist (h/t Roger Lowenstein). But of those who were 30 in 2014, just half earned more.” I.e. the vast majority of the US was upwardly mobile in the 1970s, but this is no longer true now.
@ucbalumnus interesting info. The only misleading part is the 92% of 25 to 34 year olds in 1970 making more, on inflation adjusted basis, than their parents at the same age. This is a meaningless stat to me. Their parents were that age during the Great Depression and WW2.
1970 less ages gives us a range of birthdays from 1936 to 1945.
To the extent the ROI on college is low, it could be an indication sending a higher percent of the population to college does not improve aggregate productivity. There may be a mismatch between the skills employers want and the skills the typical college develops at the undergrad level.
Gee… it’s almost like we’re not lazy and that the odds actually are stacked against us.
Programs to help young people have been slashed to nothing and wages are abysmal. Add in college debt and you have a recipe for stagnation and falling status.
I am 28 and I’m the only person I know who is doing better than those statistics. We own a home, have a very middle class income, good cars, etc but we’re also still deep in student debt and we have significantly delayed kids because of that. It’s also the primary reason we’ll almost certainly only have one child.
Also, more jobs these days have credential creep BA/BS requirements, and many which do not require a BA/BS require more post-high-school education/training/certification/licensing at the expense of the applicant, rather than hiring a high school graduate and doing on-the-job-training like in the past.
Yes, it is hard to be a young adult today, harder than it was in 1970 or 1980. But nowhere near as hard as it was in the 1930s and 1940s, so keep some perspective.
In the 1930s and 1940s, though, people didn’t criticize you if you lived with your parents as a young working adult. You weren’t expected to achieve enough financial independence immediately after finishing your education so that you could establish your own household.
In the 1930s and 40s, most young adults were expected to affirmatively contribute to the family income and help support the family unit, not be supported by it.
@Marian, in the '30’s, some families had trouble even buying peanut butter to eat. In the '40’s, most able-bodied men that age were sent off to a world war that ultimately claimed the lives of hundreds of millions.
They had a few more pressing concerns that what people thought of them.
Thinking back to what my mother told me about her life as a young adult, I think some mutual support was going on.
When she got a job after high school (she didn’t go to college), she continued to live with her mother and contributed to the household income. Her contribution was important because her mother was a widow living on a fixed income. But her mother didn’t expect her to contribute more than she earned. Living with her mother was affordable. Living on her own would not have been.
So it seemed to work out well for both of them, and nobody said that she was an unsuccessful young adult or that her mother was an unsuccessful parent because they were still sharing a home. It was considered an entirely normal thing to do.
I think the difference is that currently fewer young adults at their parents’ home are contributing to supporting the family unit. More seem to expect to be supported, fed, cleaned up after, etc, upon returning home, as when they were teens.
Ill bite. In 1977, i was 26 years old. I lived in my own apartment…rent $100 a month. I had a three year old used car with a $35 a month payment. My salary was under $8000 a year…but compared to being a starving college student who worked several jobs…I felt wealthy.
At 30 I’d been married for two years. We were living in Germany. No kids, two salaries. We shared an apartment with another young woman we liked very much. We felt as rich as we’d ever felt. Traveled in Europe, ate out regularly. IRCC at 31 a smaller apartment opened up in the building and we were able to have a place to ourselves.
My 30 year old kid makes more than we do. Lives in a rented one bedroom apartment and has been on his own since graduating from college.
My 27 year old lived with us for a couple of years after college with underpaid internships and jobs, but he’s been on his own for two years now. He has a nice apartment, one bedroom, girlfriend is moving in, though she will be back on the road for dissertation research at least some of the time.
Interesting stats. I was at the very top of that age category when this study was taken. I can say, without a doubt… that I make more than the median for my age, that I borrowed less than that average, that I have less than that debt (outside of my mortgage), that I own a home, and that not only did I make more than my parents ewhen they were my age, but that I make more than them now.
It’s obviously but a good position to be in, across the board, and i’m very fortunate, but I feel bad for people who are struggling. I have friends with masters degrees who are in a much less fortunate financial position.
Is there some conversion/formula to compare money earned in 1980s with money now? I have a hard time comparing the two.
Never mind—found a CPI inflation calculator that shows $100 from 1987=$215 in 2017.
Our S is doing MUCH better than we were at our respective ages financially. He was fortunate we were able to fund his very expensive BEE degree so he could graduate debt-free, even though each of his four years of college cost more than my 4 years of college + 3 years of law school. He makes more in his BEE job + his part time job than H & I made together in 1987, even with the CPI adjustment—me as an attorney and H as a fed govt civil servant with many years seniority.
I didn’t say productivity had decreased. I said the increase in the percent of the population going to college did not cause an increase in productivity.