Baldknobber123 wrote on Reddit…
I always find looking at the economic condition of millennials (those under 40) vs baby boomers at that age useful.
The overall economic growth rate for first 15 years in the workforce for millenials is the worst on record, going back to 1792. Millennials in the US have had the worst GDP growth per capita of any generation, and about half that of boomers and Gen X. “When boomers were roughly the same age as millennials are now, they owned about 21% of America’s wealth, compared to millennials’ 3% share today, according to recent Fed data.”
This combined with various changes since the 70s that have significantly reduced labor power, and thus helped reduced the amount of income going to the working class. So, not only is overall growth lower, but in 1980 the working class was seeing the most income growth, while now the richest see the largest growth by far. Hence average hourly wages being lower now (inflation adjusted) than in 1973. Not even getting into some other issues: multiple financial crises, education costs, healthcare, housing costs, increased levels of job competition due in part to a global workforce (general capital mobility), financialization, union busting, increased educational competition (even since 2001 colleges like Stanford have seen their acceptance rates drop from ~15-20% to ~5%), mass incarceration, all the general problems with wealth and income inequality (such as power dynamics and opportunity differences), etc.
The recession sliced nearly 40 percent off the typical household’s net worth, and even after the recent rebound, median net worth remains more than 30 percent below its 2007 level.
Younger, less-educated and lower-income workers have experienced relatively strong income gains in recent years, but remain far short of their prerecession level in both income and wealth. Only for the richest 10 percent of Americans does net worth surpass the 2007 level.
Data from the Federal Reserve show that over the last decade and a half, the proportion of family income from wages has dropped from nearly 70 percent to just under 61 percent. It’s an extraordinary shift, driven largely by the investment profits of the very wealthy. In short, the people who possess tradable assets, especially stocks, have enjoyed a recovery that Americans dependent on savings or income from their weekly paycheck have yet to see. Ten years after the financial crisis, getting ahead by going to work every day seems quaint, akin to using the phone book to find a number or renting a video at Blockbuster.
A decade after this debacle, the typical middle-class family’s net worth is still more than $40,000 below where it was in 2007, according to the Federal Reserve. The damage done to the middle-class psyche is impossible to price, of course, but no one doubts that it was vast.
A recent study by the Federal Reserve Bank of St. Louis found that while all birth cohorts lost wealth during the Great Recession, Americans born in the 1980s were at the “greatest risk for becoming a lost generation for wealth accumulation.”
In 2016, net worth among white middle-income families was 19 percent below 2007 levels, adjusted for inflation. But among blacks, it was down 40 percent, and Hispanics saw a drop of 46 percent.
In a new report, Data for Progress found that a staggering 52 percent of people under the age of 45 have lost a job, been put on leave, or had their hours reduced due to the pandemic, compared with 26 percent of people over the age of 45. Nearly half said that the cash payments the federal government is sending to lower- and middle-income individuals would cover just a week or two of expenses, compared with a third of older adults. This means skipped meals, scuppered start-ups, and lost homes. It means Great Depression–type precarity for prime-age workers in the richest country on earth.
Studies have shown that young workers entering the labor force in a recession—as millions of Millennials did—absorb large initial earnings losses that take years and years to fade. Every 1-percentage-point bump in the unemployment rate costs new graduates 7 percent of their earnings at the start of their careers, and 2 percent of their earnings nearly two decades later. The effects are particularly acute for workers with less educational attainment; those who are least advantaged to begin with are consigned to permanently lower wages.
A major Pew study found that Millennials with a college degree and a full-time job were earning by 2018 roughly what Gen Xers were earning in 2001. But Millennials who did not finish their post-secondary education or never went to college were poorer than their counterparts in Generation X or the Baby Boom generation.
The cost of higher education grew by 7 percent per year through the 1980s, 1990s, and much of the 2000s, far faster than the overall rate of inflation, leaving Millennial borrowers with an average of $33,000 in debt. Worse: The return on that investment has proved dubious, particularly for black Millennials. The college wage premium has eroded, and for black students the college wealth premium has disappeared entirely.
Some more data, such as the source for economic growth by generation and how younger people did not recover nearly as well from the financial crises, can be found here: https://www.washingtonpost.com/business/2020/05/27/millennial-recession-covid/
Of course – this is not limited to millennials. Inequality has risen across the board, and the working conditions in the United States are rampant with insecurity. The working class struggles in every age group. Our overall physical, educational, and financial health are severely lacking. Millennials, due to how insecure their situation is (as seen above), do provide a great example of how the lower income groups and least powerful worker groups face the brunt of economic catastrophe while the rich gain.
A good intro book to check out on some of the political causes of inequality in the US, such as major tax cuts and corporate lobbying, is Winner Take All Politics: https://en.wikipedia.org/wiki/Winner-Take-All_Politics
Additionally, a great intro book on labor history in the US is From the Folks Who Brought You the Weekend: https://thenewpress.com/books/from-folks-who-brought-you-weekend