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The biggest financial recession since the Great Depression dealt a particular blow to those who came of age in the US during the crisis. Many older millennials, an age group entering the labour force just as the crisis hit, suffered early career setbacks that have hindered their ability to afford the lifestyle that their parents enjoyed at the same age.
While the employment of nonmilitary male civilians between the ages of 18 and 33 stayed at a steady 78% for the previous three generations, only 68% of the same demographics are working today. When the crisis hit, the employment rate dropped for all Americans, but for young Americans at the start of their career, the ramifications could last the longest. The line on this chart shows how slow the employment rate for younger Americans has been to recover.
Compounding a lower employment rate, the cost of US higher education has grown sharply. The total cost of college tuition fees rose 63% in the decade between 2006 and 2016. Student debt now exceeds all other forms of consumer debt except mortgages. The chart shows how the average borrower now graduates with $5,000 in debt. Home ownership for 25- to 35-year-olds today is also lower than that of previous generations at the same age, adding to a bleak picture of a generation that's falling behind their parents in terms of net worth.
Indeed, a recent study by economist Raj Chetty found that children today are much less likely to out-earn their parents at the same age. He found that someone born in the 1940s, for instance, was almost guaranteed to be in a better economic position at age 30 than his or her parents were at age 30. In contrast, 30-year-olds today have only a 50/50 chance of earning more than their parents did at the same age.
