Recession's Mark on Millennials

[imoldernu]

The business section of this morning's Chicago Tribune had an interesting article that compares the financial situation of millennials with that of their boomer parents. While the article is geared to personal stories, the numbers appear to be real, and to me, disturbing.
Though we're from the silent generation, looking back at when we were in our twenties, the economy was promising, and afforded us a decent salary as well as an affordable lifestyle. Perhaps, even more than that, a bright outlook for the future.
The dollar differences, while shown on an annual basis are wide enough, but the lower income in today's economy does not augur well for building a financial base for the future.

Using U.S. government data from the Survey of Consumer Finances, Young Invincibles researchers found that young adult workers earned $40,581 in 2013, compared with the average $50,910, adjusted for inflation, that young adults earned in 1989.

Going to college and finishing without any debt, however, doesn't put millennials on par with their parents' generation. Recent college graduates without student loans are trailing the 25- to 34-year-olds of 1989 who also had graduated from college without debt. The median net worth of this group in 1989 was $125,572 compared with just $75,000 for millennials with degrees, according to the Young Invincibles report.

The article:
Thanks to recession, millennials trail their boomer parents financially - Chicago Tribune

 

[MichaelB]

This is the study referenced by the article http://younginvincibles.org/wp-content/uploads/2017/01/FHYA-Final2017-1.pdf

The time period looks strange. Boomers began much earlier, why would they be leaving out that salary data from the late 70's and early 80's?

Edit - to answer my own question, it may be due to limited availability of historical data / SCF.

 

[Bir48die]

First of all how guilty am I supposed to feel about things I cannot or could not control from the past? I just tried to survive. How many like myself got laid off in the early and mid 80's when interest rates were in the 20's? How many had to switch careers and start at the bottom because the banking industry was in the shi**er? I would have officially been around the poverty level with my new income. Home mortgage rate bought down two points to 11%.

I'm sorry about the millennials. They have not gone through many of the turbulent times that preceded them. Work harder than the other person. Rise above. Don't take out $100k loans for social science majors. Sorry but tired of articles and claims such as these.

 

[Midpack]

"Thanks to [the last] recession?" Not a very well researched article. Try globalization, and it's not over.

 

[LOL!]

Let's see, ... I was around in the late 70s and early 80s. Oh, look! Recessions in 1973-1975 and in 1980-1982 and in 1990-1991. They just didn't stop. I knew people who lost their homes. You know, put the keys in the mailbox and walked.

Lots of folks from Michigan left and moved to Texas. Unemployment was above 10% for 10 months straight in 1982-1983 and 9.8% or above for a full year.

We didn't buy a home until we were in our late 30s. My parents didn't buy a home until I was in first grade.

This article might have been written by a Millennial, but the author is not Millennial. Cry me a river.

 

[NW-Bound]

... Cry me a river.

Just the excuse that I need. Time for a music break anyway.

 

[dtbach]

Tough crowd here. I put myself through college by working 35 hours or more per week and then graduated just in time for the '73-74 recession. But at least I had no college debt (and the parents didn't give me anything either)

But I look at what my tuition was and how many hours I needed to pay it and it was doable in the early 70's. My kids just can't do it now even if they worked 60 hours per week. And the starting salaries just are not what they were in the 70's or 80's. So give the millennials a little break here. I'm glad I'm not in their shoes.

 

[Amethyst]

I'd gladly be in their shoes if it meant I got to be 30 again.

 

[Midpack]

I'd gladly be in their shoes if it meant I got to be 30 again.

Most people would probably agree with you.

But you couldn't pay me to be 30 again. Call me a pessimist but the future doesn't look as bright for today's 30 year olds - I hope I'm wrong.

 

[meierlde]

Most people would probably agree with you.

But you couldn't pay me to be 30 again. Call me a pessimist but the future doesn't look as bright for today's 30 year olds - I hope I'm wrong.

Of course as an alternative assume you turned 30 in 1940 and were a man. How did the future look to you then (or turned 20) In both cases military service was likley in your future. In 1940 it was not clear that the allies would win. (Or put your self in 1861 turning 30 in the US)
So while times may not be great there have been worse times in the past.

 

[Badger]

Worked continuously during college and grad school including summers and holidays. Learned to like daily beans and biscuits the last couple of years. Finished grad school with a small loan. Started work in 1973 at $7k. Retired after 40 years at a top salary of $50k in 2013. House paid for, no debt, and have enough saved to easily see us through until the bucket is kicked. Had a ball knowing I did it my way and don't owe anyone. I don't know how that would compare to millennials today but a little restraint on instant gratification and frugal living like my parents and I practiced might help some.

 

[bob boag]

Try globalization, and it's not over.

<ducks>

Just the excuse that I need. Time for a music break anyway.

 

[JoeWras]

"Thanks to [the last] recession?" Not a very well researched article. Try globalization, and it's not over.

Bingo.

I (and many here) have been fortunate to have either missed the globalization wave, or just gotten a portion of it.

 

[Clone]

I just looked at the SS numbers in another thread. When I graduated from college, I had 6 or 7 job offers, and I didn't interview that hard. Almost everybody was hiring. I did get a job working for the company that I had always wanted to work for. The offers from that company were at the top of the job offers for my class. That amount was within a few dollars of maxing out the Social Security the first year on the job.

Now, the grads are getting offers at 50 to 60% of the max SS numbers. So either the SS numbers have inflated relative to where they were when I was a new grad, or the pay scale has not kept up.

I agree that the globalization has held down the wages or eliminated the jobs for many people. The amount of manufacturing that has left the country took with it a lot of jobs for not only the assembly line workers, but also for the office staff and the engineers. I saw a lot of folks with non-related degrees that were working in support roles. Some of these degrees which don't have much street value today (they didn't have much value 40 years ago either), but they were enough to get a person into a manufacturing company where they could work in a support area. A lot of those jobs disappeared with automation and computers (filing clerks, typists, secretaries, mail room staff, etc).

 

[Mdlerth]

I'd gladly be in their shoes if it meant I got to be 30 again.

I suspect, if I were given the chance to be 30 again and be armed with the knowledge of all the mistakes I've made, that I'd just make different mistakes. And they might be much, much worse mistakes the second time around.

 

[Mr._Graybeard]

Tough crowd here. I put myself through college by working 35 hours or more per week and then graduated just in time for the '73-74 recession. But at least I had no college debt (and the parents didn't give me anything either)

But I look at what my tuition was and how many hours I needed to pay it and it was doable in the early 70's. My kids just can't do it now even if they worked 60 hours per week. And the starting salaries just are not what they were in the 70's or 80's. So give the millennials a little break here. I'm glad I'm not in their shoes.

Ain't it the truth. Speaking in terms of generations, boomers' parents (I'm a boomer) made it easy for their children to get educated through low-cost community colleges. We've failed to pass along that favor. I'm more than a little ashamed at my generation.

 

[Texas Proud]

Is it different today then when we were young It depends on when you were graduating...

I graduated at the end of 1982.... I was the top student in accounting and got a few job offers... but, there were some companies that were not hiring at all...

At graduation, we were talking among ourselves and of the 40 or so people around me I was the ONLY person with a job offer...

Many of the people I was in college with did not get a job for many months, and some took over a year....


I still believe that the kids today have it better than we did.... at least mine do... I could go into all the ways, but that would take a LONG time and become tedious...

 

[NW-Bound]

I just looked at the SS numbers in another thread. When I graduated from college, I had 6 or 7 job offers, and I didn't interview that hard. Almost everybody was hiring. I did get a job working for the company that I had always wanted to work for. The offers from that company were at the top of the job offers for my class. That amount was within a few dollars of maxing out the Social Security the first year on the job.

Now, the grads are getting offers at 50 to 60% of the max SS numbers. So either the SS numbers have inflated relative to where they were when I was a new grad, or the pay scale has not kept up...

As I stated in that other thread, the SS income limit was $25,900 in 1980 when I started work after graduate school. With inflation adjustment, that level is $80,290 in today's dollar, while the SS limit in 2017 is now $127,200.

The limit is most likely raised some more in the future to bring in more money to shore up the SS fund.

 

[ownyourfuture]

This letter was posted in my hometown newspaper in south central Minnesota.
I’m as far from a socialist as one can be, but it sure made me re-think things.


Increasing minimum wage makes a difference
Posted: 04/18/2014 6:14 AM


I was a beneficiary of the minimum wage laws.
When I was earning my undergraduate degree from 1972 to 1976, I was earning a minimum wage of $1.75 an hour as a laundry worker. In addition to taking 12-14 hours of college classes, I worked from 2 p.m. to 10 p.m. six days a week either driving a van that picked up dirty linen from nursing homes — or stuffing that laundry in 400-pound capacity washing machines.

For a year, I was also the assistant manager of an apartment complex, vacuuming hallways on the weekends, getting my apartment rent-free.
My after-tax take home pay 40 years ago was about $75 a week. Not only did my wife, who was a stay-at-home mom, & I live on it, we paid my full tuition, books, & fees; paid off the doctor ($600) and hospital ($600) bills for my daughter’s Caesarean birth, & even had about $1,000 in savings when I graduated.


We took no food stamps, no student grants or loans, & no money from relatives. And while it was at times tempting, we robbed no banks.
Yes, we were very frugal. Our apartments were small, uncarpeted, & un-air conditioned. We drove a $400 used car. The only time we saw the inside of a restaurant was when a relative took us out for supper. There were no cellphone, Internet, or cable bills. But we did not starve, go naked, or feel deprived — at least that I remember.


Why? Apartment rent was $80 a month, including utilities. Groceries ran about $15 a week. Full tuition was $140 a quarter.
In the 1970s a new car could be had for $3000 & house for $10,000. Gas was 30 cents a gallon. We had no health insurance, but could afford to pay for doctor & dentist appointments upfront. Chewing gum, candy bars & small bags of potato chips were all about a dime. I bought a new B&W 19” TV for $80 & a stereo for $300 (Big fight over that one, but boy, did Maria Muldaur singing “Midnight at the Oasis” sound good!)


So here is my point: I estimate that the cost of living has gone up by 1,000 percent since my days in college. Today’s apartment rents are $800, cars $30,000, & candy bars $1.00. Yet the minimum wage, even with this last increase, is nowhere close to $17.50 an hour. One cannot live, even modestly, on today’s minimum wage. This makes it necessary for the government to step in & provide food stamps, free-&-reduced hot lunches, & subsidized health care, child care, & housing for the working poor.

We’ve made the trade off as a society that we’d rather pay higher taxes to fund welfare benefits than pay an extra few pennies for our Big Macs so salaries would allow workers to live without help. My guess is that most people who are working at minimum wage would prefer making enough to take care of their own living expenses rather than being on the dole. Who really wants to see themselves as a charity case?

By raising the minimum wage we are also raising people’s self-sufficiency — a genuinely American value.

Thank you, Minnesota legislators, for nudging us in the right direction on this important issue.

 

[audreyh1]

Tough crowd here. I put myself through college by working 35 hours or more per week and then graduated just in time for the '73-74 recession. But at least I had no college debt (and the parents didn't give me anything either)

But I look at what my tuition was and how many hours I needed to pay it and it was doable in the early 70's. My kids just can't do it now even if they worked 60 hours per week. And the starting salaries just are not what they were in the 70's or 80's. So give the millennials a little break here. I'm glad I'm not in their shoes.

Me too. In the late 70s I easily paid for my top 10 engineering school tuition and books by working part time and joining the coop program.

I can't believe what kids have to pay now.

I did start my after college work in a bad recession.

 

[NW-Bound]

This letter was posted in my hometown newspaper in south central Minnesota.
I’m as far from a socialist as one can be, but it sure made me re-think things.

...

We’ve made the trade off as a society that we’d rather pay higher taxes to fund welfare benefits than pay an extra few pennies for our Big Macs so salaries would allow workers to live without help. My guess is that most people who are working at minimum wage would prefer making enough to take care of their own living expenses rather than being on the dole. Who really wants to see themselves as a charity case?

By raising the minimum wage we are also raising people’s self-sufficiency — a genuinely American value.

There's a lot of libertarian blood in me, yet at the recent election I voted to increase Arizona's minimum wage. I could see now that instead of paying welfare to people to do nothing, it's far better to pay them a living wage and to put people to work.

That proposition did pass, approved by 58% of the voters.

 

[Dan6912]

There's a lot of libertarian blood in me, yet at the recent election I voted to increase Arizona's minimum wage. I could see now that instead of paying welfare to people to do nothing, it's far better to pay them a living wage and to put people to work.



That proposition did pass, approved by 58% of the voters.

+1

 

[brucethebroker]

I dunno about the hard luck millennials............have lost two small businesses to recessions: one a service business that required driving a 10 MPG truck, destroyed when gas doubled in 1973-74 and businesses cut outside labor costs. The other wiped out by recent recession & "recovery". Meanwhile, hustled to buy a house when mortgage rates were 17% in early 80's.

Grandpa was laid off 4 different factory jobs during the great recession, and relocated from the deep south to the north to say employed. Only Dad seemed to escape the really hard economic times (home was owned mortgage free in 73-74).

It seems like most are hit with a hard time or two during their working years. All the more reason to teach financial survival skills in late H.S. and college years.

This forum seems to be a pretty good place to start on an advanced degree for Millennials....

 

[garyt]

This letter was posted in my hometown newspaper in south central Minnesota.
I’m as far from a socialist as one can be, but it sure made me re-think things.


Increasing minimum wage makes a difference
Posted: 04/18/2014 6:14 AM


I was a beneficiary of the minimum wage laws.
When I was earning my undergraduate degree from 1972 to 1976, I was earning a minimum wage of $1.75 an hour as a laundry worker. In addition to taking 12-14 hours of college classes, I worked from 2 p.m. to 10 p.m. six days a week either driving a van that picked up dirty linen from nursing homes — or stuffing that laundry in 400-pound capacity washing machines.

For a year, I was also the assistant manager of an apartment complex, vacuuming hallways on the weekends, getting my apartment rent-free.
My after-tax take home pay 40 years ago was about $75 a week. Not only did my wife, who was a stay-at-home mom, & I live on it, we paid my full tuition, books, & fees; paid off the doctor ($600) and hospital ($600) bills for my daughter’s Caesarean birth, & even had about $1,000 in savings when I graduated.


We took no food stamps, no student grants or loans, & no money from relatives. And while it was at times tempting, we robbed no banks.
Yes, we were very frugal. Our apartments were small, uncarpeted, & un-air conditioned. We drove a $400 used car. The only time we saw the inside of a restaurant was when a relative took us out for supper. There were no cellphone, Internet, or cable bills. But we did not starve, go naked, or feel deprived — at least that I remember.


Why? Apartment rent was $80 a month, including utilities. Groceries ran about $15 a week. Full tuition was $140 a quarter.
In the 1970s a new car could be had for $3000 & house for $10,000. Gas was 30 cents a gallon. We had no health insurance, but could afford to pay for doctor & dentist appointments upfront. Chewing gum, candy bars & small bags of potato chips were all about a dime. I bought a new B&W 19” TV for $80 & a stereo for $300 (Big fight over that one, but boy, did Maria Muldaur singing “Midnight at the Oasis” sound good!)


So here is my point: I estimate that the cost of living has gone up by 1,000 percent since my days in college. Today’s apartment rents are $800, cars $30,000, & candy bars $1.00. Yet the minimum wage, even with this last increase, is nowhere close to $17.50 an hour. One cannot live, even modestly, on today’s minimum wage. This makes it necessary for the government to step in & provide food stamps, free-&-reduced hot lunches, & subsidized health care, child care, & housing for the working poor.

We’ve made the trade off as a society that we’d rather pay higher taxes to fund welfare benefits than pay an extra few pennies for our Big Macs so salaries would allow workers to live without help. My guess is that most people who are working at minimum wage would prefer making enough to take care of their own living expenses rather than being on the dole. Who really wants to see themselves as a charity case?

By raising the minimum wage we are also raising people’s self-sufficiency — a genuinely American value.

Thank you, Minnesota legislators, for nudging us in the right direction on this important issue.

I'm not necessarily against raising the minimum wage, but the idea that you're supposed to be able to live off it is silly. Minimum wage jobs are a stepping stone to better jobs. If working at a fast food joint is all you intend to do in life, you have other problems.

 

[ugeauxgirl]

In a seminar on generational differences, they discussed the fact that the millenials (in general) are not ideal employees. They tend to be job hoppers, have poor work ethic, need lots of feedback on their job, not deal with conflict or criticism well (the trophy for showing up generation) and think that there is a job out there that they will love every aspect of. I have told more than one millenial that the job they are dreaming of is called a HOBBY. The reason an employer pays you to go to work is that its not always fun.