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Millennials are falling behind their boomer parents

Posted 9:48 a.m. Friday
Updated 9:49 a.m. Friday

In this Jan. 9, 2017, photo, Andrea Ledesma spreads sauce on pizza dough at Classic Slice restaurant in Milwaukee. The 28-year-old has a four-year degree and quit a higher paying job because it made her miserable. Ledesma thought she would be making more at this point in her life and she's not alone. With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles. (AP Photo/Carrie Antlfinger)

— Baby Boomers: your millennial children are worse off than you.

With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles.

The analysis being released Friday gives concrete details about a troubling generational divide that helps to explain much of the anxiety that defined the 2016 election. Millennials have half the net worth of boomers. Their home ownership rate is lower, while their student debt is drastically higher.

The generational gap is a central dilemma for the incoming presidency of Donald Trump, who essentially pledged a return to the prosperity of post-World War II America. The analysis also hints at the issues of culture and identity that divided many voters, showing that white millennials — who still earn much more than their blacks and Latino peers — have seen their incomes plummet the most relative to boomers.

Andrea Ledesma, 28, says her parents owned a house and were raising kids by her age.

Not so for her. Ledesma graduated from college four years ago. After moving through a series of jobs, she now earns $18,000 making pizza at Classic Slice in Milwaukee, shares a two-bedroom apartment with her boyfriend and has $33,000 in student debt.

"That's not at all how life is now, that's not something that people strive for and it's not something that is even attainable, and I thought it would be at this point," Ledesma said.

Her mother Cheryl Romanowski, 55, was making about $10,000 a year at her age working at a bank without a college education. In today's dollars, that income would be equal to roughly $19,500.

Romanowski said she envies the choices that her daughter has in life, but she acknowledged that her daughter has it harder than her.

"I think the opportunities have just been fading away," she said.

The analysis of the Fed data shows the extent of the decline. It compared 25 to 34 year-olds in 2013, the most recent year available, to the same age group in 1989 after adjusting for inflation.

Education does help boost incomes . But the median college-educated millennial with student debt is only earning slightly more than a baby boomer without a degree did in 1989.

The home ownership rate for this age group dipped to 43 percent from 46 percent in 1989, although the rate has improved for millennials with a college degree relative to boomers.

The median net worth of millennials is $10,090, 56 percent less than it was for boomers.

Whites still earn dramatically more than Blacks and Latinos, reflecting the legacy of discrimination for jobs, education and housing.

Yet compared to white baby boomers, some white millennials appear stuck in a pattern of downward mobility. This group has seen their median income tumble more than 21 percent to $47,688.

Median income for black millennials has fallen just 1.4 percent to $27,892. Latino millennials earn nearly 29 percent more than their boomer predecessors to $30,436.

The analysis fits into a broader pattern of diminished opportunity. Research last year by economists led by Stanford University's Raj Chetty found that people born in 1950 had a 79 percent chance of making more money than their parents. That figure steadily slipped over the past several decades, such that those born in 1980 had just a 50 percent chance of out-earning their parents.

This decline has occurred even though younger Americans are increasingly college-educated. The proportion of 25 to 29 year-olds with a college degree has risen to 35.6 percent in 2015 from 23.2 percent in 1990, a report this month by the Brookings Institution noted.

The declining fortunes of millennials could impact boomers who are retired or on the cusp of retirement. Payroll taxes from millennials helps to finance the Social Security and Medicare benefits that many boomers receive — programs that Trump has said won't be subject to spending cuts. And those same boomers will need younger generations to buy their homes and invest in the financial markets to protect their own savings.

"The challenges that young adults face today could forecast the challenges that we see down the road," said Tom Allison, deputy policy and research director at Young Invincibles.

8 Comments

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  • John Paschall Jan 13, 2:38 p.m.
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    View quoted thread


    Yeah, Polio, jim crow laws, segregation, no women's rights.

  • Randall Lamm Jan 13, 2:12 p.m.
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    She "bounced" around on several jobs before working at the pizza parlor.
    I guess she found out she couldn't be the boss or get a big raise the first week.
    Or...she couldn't stay off of her phone while working.

  • Fenway O'Donnell Jan 13, 10:20 a.m.
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    I agree with Mr. Stark and Mr. Greene. However, I must also state that , as a parent of three millennials, I feel that it is our duty to give our kids a dose of reality as to what they should study in college. If we, as parents, fail to give them this reality check, they will surely bounce back to our house and on our payroll.

  • Patrick Morningstar Jan 13, 10:03 a.m.
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    You can go to college for one of two reasons. To make a good living, or to be more educated. Just because these kids may be more educated than their parents means squat in the real world and the colleges are laughing all the way to the bank.

  • Paul Gemborys Jr Jan 13, 9:57 a.m.
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    What is funny is how the progressives always rail that the 50s were a horrible time for America, now the jokes on them.

  • Thom Stark Jan 13, 9:13 a.m.
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    I agree Walter. I have sat down with my children and we have had discussions about career choices. Too many people believe that a college degree is a TICKET. No, it is a TOOL and you better bring a useful one to the "work party."

    I know of a young lady right now, who is going to one of the less than satellite universities in the UNC system, majoring in recreation therapy. She is going to be sorely surprised when she graduates.

  • Walter Greene Jan 13, 8:44 a.m.
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    Why doesn't the reporter tell us more about this Millennial's degree? Was this woman a good student, who earned a useful degree? Or did she go into debt for a useless degree that doesn't lead to a real job? It really doesn't matter how smart you are (in terms of degrees), if you can't use your knowledge to earn a living for yourself and your family.

  • Brian White Jan 13, 8:26 a.m.
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    Not sure what else would be expected when a Millennial's idea of work is spending half their day on the facebook.