A friend recently shared with me a new expression going around his office about young workers: They’re called “24s,” he said: “They’re 24 years old, and willing to work 24 hours a day for $24,000.”
Sure, it’s an exaggeration, but it carries with it a lot of truth. A toxic mix of circumstances has put immense financial pressure on young workers today: record student loan debt, a tough job market, rising healthcare costs—all in a housing market that punishes renters and first-time home buyers alike.
Oh yeah, and you’re probably underpaid.
The Center for American Progress ran the numbers recently and found this dismal result: In 1984, the median hourly wage for a 30 year old was $18.99 (inflation adjusted). In 2014, it was $19.32, despite the latter group being 50 percent more likely to have a college degree. For perspective, the median U.S. home price in December 1984 was an inflation-adjusted $181,000 ($78,300 real dollars); in December 2014, it was $302,000.
Granted, national numbers can make for inexact comparisons, so we’ll look at a local market: Last year, the New York City Comptroller’s Office released a report that found real annual wages of a typical 29-year-old New Yorker shrank from $56,000 to $50,000 between 2000-2014.
“This group of young people is confronting unique economic challenges that their parents did not,” New York City Comptroller Scott M. Stringer said when the report was released. “Every generation is expected to do better than the last, but too many millennials are not getting a fair chance.”
So why is this happening?
Simple: most aren’t finding jobs they went to school for.
The Comptroller’s office found that the percentage of college-educated young adults working in low-wage industries soared from 23 percent to 33 percent during that span. And while the New York City unemployment rate is about half of what it was during the recession, many high-paying jobs have been replaced with lower-wage jobs.
In fact, two of the fastest-growing employment sectors are “hospitality and food service” and “retail trade”—meaning there are a lot of college grads waiting tables and selling clothes. (What’s more, pay in those sectors fell 16 percent during that time). That effect—mid-wage jobs being replaced by low-wage jobs—has been repeated around the country.
Are high-wage earners doing any better?
Even then, employers have the upper hand in negotiations, knowing they have a stack of resumes representing candidates willing to replace employees who demand more money.
“The current U.S. labor market is still one where millennials compete for jobs instead of employers competing for millennials by offering them higher wages,” the Center for American Progress said.
Well, I’m depressed. Is there hope?
Actually, yes. The December 2016 unemployment report showed that hourly wages climbed 2.9 percent from the prior year—the highest since 2009. Even better, the Census Bureau, which takes a longer view, said last fall that wages had grown at a 5.2 percent annual rate, one of the largest recorded. While those increases include all ages, there’s hope the raises will eventually filter down.
That said, there’s still a long way to go to compensate for decades of stagnation and years of higher living costs. So when older relatives claim, “We had it hard!” don’t be afraid to show them the data.
February 27, 2017