Wall Street executive and New York Times op-ed columnist Steven Rattner presents a sobering array of evidence that the Millennial generation, “the most educated generation in history,” is “on track to becoming less prosperous, at least financially, than its predecessors.”
You can read the entire report here.
Some of the gloomy highlights:
- In 1980, the 18-34 age group had median annual earnings of $33,845 (in 2013 dollars). This rose to $36,716 in 1990, and dipped slightly to $36,355 in 2000. Today it stands at $33,883 — right back at the 1980 level.
- At the same time, a higher percentage of this age group have a bachelor’s degree or higher. In 1980, 15.7% had that level of education; today, it’s 22.3% — almost 50% higher.
- And the cost of that education is in itself a huge problem. College tuition has increased 234% since 1995 (inflation was 63% over that same period), and today 71% of bachelor’s degree recipients graduate with debt, compared to 46% in 1995.
- To complete the perfect storm of problems, they’re graduating into an economy with less-than-robust job growth, to put it charitably, and runaway government deficits that are certain to trigger an even more intense inter-generational fight for scarce resources, as Social Security and health care come under increased pressure due to the aging of the population.
The results, at least in the immediate term, are predictable: Millennials are marrying later, having kids later, and delaying the purchase of new homes and even cars.
So what’s the solution? “First and foremost would be to get the nation’s economy onto a stronger growth trajectory,” Rattner argues. This would require more federal spending on education, infrastructure and r&f, which would in turn mean higher taxes “on my generation, which is getting a lot more from government than we are paying into it,” and the reform of entitlement programs like Social Security. We can quibble with some of this — and certainly, we’re entitled to be massively skeptical of the government’s ability to execute effectively, even if the underlying policies make sense. But there is no doubt that Rattner has accurately described a massive and urgent problem.
There are some interesting spinoffs for marketers in all of this, and I’ll have more comments in future posts. Meanwhile, I urge everyone to read the full article.