Millennials are experiencing sinking wages across almost every industry.
So we keep hearing about this “recovery” that is going on. Even in an article about descending wages, the writer rehearses the standard line.
The evaporation of real wages for young Americans is a real mystery because it’s coinciding with what is otherwise a real recovery. The economy has been growing steadily since 2009. We’re adding 200,000 jobs a month in 2014. That’s what a recovery looks like. And yet, overall U.S. wages are barely growing, and wages for young people are growing 60 percent more slowly than overall U.S. wages. How is a generation supposed to build a future on that?
This is the conclusion of the article, “The Incredible Shrinking Incomes of Young Americans” in the Atlantic. I simply don’t see why decreasing wages can be called a “real recovery.” Not even adding “otherwise” to the description makes it accurate.
To answer the writer’s rhetorical question, a generation is not building a future. Instead they are becoming basement-dwellers in their parents’ house. This could have immense consequences for the future as people who would normally be having children are indefinitely delaying such household-formation.
American families are grappling with stagnant wage growth, as the costs of health care, education, and housing continue to climb. But for many of America’s younger workers, “stagnant” wages shouldn’t sound so bad. In fact, they might sound like a massive raise.
Since the Great Recession struck in 2007, the median wage for people between the ages of 25 and 34, adjusted for inflation, has fallen in every major industry except for health care.
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.
The picture isn’t much better for the youngest group of workers between 18 and 24. Besides health care, the industries employing the vast majority of part-time students and recent graduates are also watching wages fall behind inflation. (40 percent of this group is enrolled in college.)
While a few things the article mentions have contributed to this wage decline, I think the real problem is that the “recovery” is being driven by no real economic reform. Instead of deregulating industry and lowering taxes the government is simply using currency debasement as its only strategy for stimulating the economy. That only serves to enrich a few people while hurting others.