In the mid-to-late-20th century, the American economy and culture were ripe for 30-year-old men, who — more than European and Japanese — typically landed well-paid careers, bought homes, and supported large families. But since then, getting ahead has become much harder.
What's going on: Today, 30-year-old millennials are more likely to be still living with their parents and, while earning about the same or less than boomers, are typically saddled with college debt.
One consequence: Possible trouble for an older generation that will rely on them doing better.
The background: Millennials now comprise almost a quarter of the population and are the largest generation participating in the workforce. But their median salaries are lower than the prior generation of 30-year-olds, and the financial burdens they carry are heavier, limiting how much their lifestyle can mirror that of their parents:
- So far, the trends suggest a break with prior American rites of passage, including marriage and child-bearing. According to some demographers, this break could slow economic growth.
- Men are more likely to earn less. In 1975, only a quarter of 25 to 34-year-old men made less than $30K per year, but that number rose to 41% in 2016.
- Going deeper: As a measure of upward mobility, 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.
Chetty attributed most of this erosion to slower GDP growth and a change in the distribution of GDP favoring higher earners: GDP would have to rise by 6% a year to get the same impact, he said, and wealth would have to be distributed much more evenly.
In other words, Chetty suggested, it has become much, much harder for young lower- and middle-income workers to earn as much of the nation's growing wealth as they once did.
Today, 30 year olds are:
- Living with their parents: In 1975, when the oldest Boomers were 29, 57% of 18 to 34- year-olds lived with a spouse in their own household. Even as late as 1990, almost half lived with a partner. But in 2016, 31% were living in their parents’ home, making it the new, most common living arrangement for young adults, according to Census data.
- Paying more for college: In 1975, college tuition cost $2,450 for public, four-year colleges (in 2017 dollars). In 2017, it was almost $10,000, according to CollegeBoard.
- In more debt: In 1989, less than 20% of families had student debt, compared with 41% in 2013, according to the Census. The amount owed almost tripled in that time.
- Less likely to be homeowners: 57% of 30 to 34-year-olds were homeowners in 1982, compared with just 45% in 2017.
The impact of significant student debt can be seen in lower marriage rates, according to Dora Gicheva, an economist at UNC Greensboro.
- In 2017, 57% of millennials were never married. In 1985 — when boomers were around the same age — only a third had never been married, Pew Research's Richard Fry told Axios. Even accounting for unmarried living partners does not make up the difference, he said.
- Having fewer children: When Boomers were in their 20s, the fertility rate was 2.48, well beyond the replacement level of 2.1. Today, it is just 1.76.
- When a recent survey asked why they were having fewer kids, most young adults said “child care is too expensive.”
“Millennials are more risk averse than earlier generations at the same age. People 50 or even 25 years ago didn’t wait to be ‘financially well established’ before starting a family. Now it’s considered irresponsible not to.”— Richard Jackson president of the Global Aging Institute, told Axios
Exceptions:
Opportunity for 30-year-old women has improved, which contributes to falling fertility rates, says Eric Kaufmann, a professor at Birkbeck College.
- Millennial women are likelier to hold a Bachelor’s degree than men.
- Women’s pay has increased substantially from one generation to the next
- The share of young women who are homemakers has decreased from 43% in 1975 to 14% in 2016, according to Census data.
And the percentage of 25 to 29-year-old African Americans and Hispanics with at least a Bachelor's degree has increased even faster than white Americans since 1980, although a gap still exists, according to the National Center for Education Statistics.
- Twice as many African Americans have graduated from college than in 1991 and there has been a 60% increase for Hispanics over the past 20 years.
Still, an income gap between young, white Americans and racial minorities has persisted. Median income for African Americans between the ages of 25 and 34 as a percentage of white Americans has hovered around 75% since 1974.