A fun fact about earning capacity, according to the Center for American Progress: 30-year-olds today make about as much, on average, as 30-year-olds did in 1984, “despite the facts that they are 50 percent more likely to have finished college and that they work in an economy that is 70 percent more productive.”
The Center for American Progress lays out the way the economic downturn, slow recovery and student debt have cancelled out today’s record workforce productivity and levels of higher education. Wages rose slightly in the mid-2000s, but have dipped again: the median overall hourly wage for a 30-year-old in 1984 was $18.99, in 2004 was $20.63 and in 2014 was $19.32.
This stagnation is due to a perpetually “loose” market, in which supply has been higher than demand for a long time, and the fact that there are few non-public unions to protect the people who are working. The study notes that employers raise wages only when they are required to; the last few decades show that they do not raise wages simply out of generosity. The Center for American Progress notes that the playing field between employees and employers will have to be leveled—by keeping interest rates low, as to not dampen the effects of wage growth, and by making it easier for employees to unionize in the private sector.
The Atlantic spoke to Brendan Duke, the author of the study and the Center for American Progress’s associate director for economic policy, who noted that this generation is reportedly the “least likely… to belong to a union, and union membership on the whole has been on the decline,” but that it’s in their best interest to break that cycle. Via the Atlantic:
There are other changes that might also improve Millennials’ lot. “Paid leave really represents an opportunity to do better,” Duke says. The report suggests that if successful, the current push for more robust leave policies could help Millennial women bridge the gender-wage disparity, which is expected to start growing as more of the generation takes time off for birth, childcare, and caring for ailing relatives. On top of that, more generous leave policies would mean that women could not only take time away from the office without fear of a wage or promotion penalty, but also that men could do the same, creating a more equitable division of labor both at home and and work.
The lingering problem, of course, is student debt. Duke tells the Atlantic: “I think people are kind of stuck in a catch-22 where they feel they need to get these skills in order to compete in the 21st century economy, but on the other hand they have to pay more tuition and take on more debt in order to do that.”
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