Millennial income 20% less than boomers at same stage of life
Millennial income did not recover from the Great Recession like older generations', a disparity that can have dire consequences for future generations.
- A New America report shows millennial income and wealth accumulation lags dramatically behind their parents' and grandparents' generations.
- Resulting from the Great Recession, rising debt, and volatile wealth flow, this imbalance will impair future generations if not corrected.
- The report's authors argue the shortfall can be redressed with comprehensive policy changes.
Millennials are defined by their diversity, but like every generation, they have experiences and milestones they all share.
In their formative years, millennials witnessed the rise of the internet, protracted wars in the Middle East, and a burgeoning political polarization. They ignited the experience economy and shifted the values of American culture. They are more educated than previous generations, yet stumbled into the workforce among the financial gyre of the Great Recession.
That last one has had a profound impact on the shared millennial experience. While the broader economy has convalesced, and Gen Xers have recovered the wealth they lost, millennials continue to lag behind previous generations, unable to find purchase in the financial system that made their parents and grandparents among the most well-off generations in history.
According to a New America report, The Emerging Millennial Wealth Gap, millennials currently earn 20 percent less than boomers at the same stage of life. In fact, millennial wealth accumulation is on track to fall short of their parents' lot. And this imbalance may impair subsequent generations, too.
Millennial income and debt
The Great Recession catalyzed the millennials' poor financial state. Just as the generation entered the workforce, businesses began downsizing, income wages nosedived, and millennials had to compete against an established workforce for fewer jobs. Since then, wage growth has been sluggish and recovery uneven.
But as the New America report illustrates, the recession is hardly the only factor at play. As is often the case, it's a nuance issue with many contributing influences.
For example, millennials are the most educated generation (for now). They have received more bachelor's degrees than previous generations, but that education has come at a cost. American tuition fees have increased faster than wages, with the average annual cost for attending a public four-year university at just over $19,000 (2015-16). At $1.5 trillion, today's student debt has surpassed loans for cars and credit cards, stymieing those who hold it from putting that money toward asset accumulation.
"It is not surprising that the median wealth of all millennials with any debt at age 30 is lower than those with no debt who attended college; however, their median wealth levels are also lower than young adults who never attended college," the New America report states.
Between student debt, car loans, and credit card debt, millennials maintain a higher debt-to-income-and-asset ratio than previous generations at the same age. Importantly, this debt is less mortgage debt and more consumer debt. The difference being that the former later becomes an asset value, while the latter does not.
Add to this debt sluggish wages and volatile income from an increased reliance on gig jobs—which lacks the assurances and benefits of full employment—and the millennial balance sheet has taken a huge hit.
How bad a hit? According to the New America report:
For families headed by an individual under the age of 35, net worth was 41 percent lower in 2016 than 1995. In contrast, households headed by someone over age 75 have seen their wealth rise. The recent growth of net worth among older households has been especially pronounced. It has increased 32 percent from 2013 to 2016, reflecting new growth in the generational wealth gap.
That generational wealth gap is further aggravated along racial lines. The report cites the median net worth of non-Hispanic White households at $171,000, compared to $17,600 for black households and $20,700 for Hispanic households. The authors chose the median because the mean proved substantially higher for all race and ethnicity households, "which reflects the concentration of wealth among the wealthiest in each category."
"Millennials are in a fundamentally different economic place than previous generations," writes Reid Cramer, director of the Millennials Initiative at New America, in the report. "Relatively flat but volatile incomes, low savings and asset holdings, and higher consumer and student debt have weakened their finances. The Millennial balance sheet is in poor shape."
A generation feels the effects
This graph from the World Economic Forum shows millennial income wage growth alongside average student debt.
This flagging wealth accumulation plays out in many of the stereotypes associated with millennials—stereotypes often wrongly attributed to other traits.
The trend of millennials living in their parents' basements has become a threadbare zinger, but there is truth to it. The number of young adults returning home has risen since 1997. Rather than the result of a lazy, lost generation who can't properly adult, the culprit is debt, stagnant wages, and the high cost of living.
Another result is the decline of millennial marriage. One study found a negative correlation between student debt and marriage. Under the financial strain, millennials less likely to embark on marriage and starting a family until much later in their lives. (Though, we should note, decade-long trends like women workforce participation and declines in teen pregnancy rates have also affect marriage rates.)
This wealth gap has also fueled the homeownership gap.
Millennials are less likely than Gen Xers and baby boomers to be homeowners, thanks to rising prices and fewer houses on the market. As the New America report notes, this single factor is perhaps the greatest detriment to millennial wealth building, as the home is often a household's largest asset.
"While the typical homeowner had a net worth of $231,400 in 2016, the typical renter had a net worth of $5,200, making this single variable among the most significant in explaining different wealth trajectories among American households," the report states.
A cascading recession?
Inadequate wealth accumulation is not solely the problem of a single generation. Unless corrected for, it can have a cascading effect that hinders future generations, as parental wealth informs what economic resources can be invested in their children's development.
A study out of the London School of Economics showed a strong causal link between household finances and children outcomes. It found evidence that low incomes prevent parents from investing in goods and services for their children. Additionally, these parents suffer from stress and anxiety, which can have further detrimental effects on their children. The study found that poor children are more likely to have worse education, health, and social-behavioral outcomes as a result.
The New America report also cites large bodies of research indicating that the family economic resources impact a child's human potential and their own economic outcomes.
Redressing the wealth gap
Democratic nominee Senator Elizabeth Warren wants to cancel student loan debt, a potential redress for the millennial income and wealth gap.
The conclusion of the New America report is that the intergenerational wealth gap must be redressed through system-wide policy changes. That's because wealth isn't simply luxury; it's the "key to financial security and economic mobility."
Those with little to no wealth accumulation cannot participate in the economy or society at the same level as their wealthy peers. They lack the tools and resources to reach their full potential, they cannot exercise or defend their rights as effectively, and in some ways basic needs become more expensive when they can be acquired.
The report's researchers cite eight potential responses to repair the millennial balance sheet, as well as examples of what those policies may look like:
1) Promote savings to build up cash reserves
Remove taxes for savings account interest up to a certain amount. Offer bonuses or matches on saved amounts.
2) Reduce the debt overhand
A large-scale cancellation of student load debt. Improve income-based repayment plans. End taxation on forgiven student loans. Make loan repayment a standard employee benefit.
3) Facilitate deposits to retirement plans
Incentivize savings through a government match program. Develop a public-option savings plan for people without an employer option.
4) Increase the supply of affordable rental housing while promoting paths to sustainable homeownership.
Pass laws to increase oversight over the mortgage market. Draft support systems to help people save for down payments.
5) Invest in the next generation's asset development
A government plan that provides every child with a savings account and seed deposit. State-based 529 college savings plans with progressive matching features.
6) Address the rising cost of college and reduce reliance on student loans.
Increase tuition subsidies for low-income students. Improve transparency at educational institutions. Better regulate for-profit educational institutions. More robust support for four-year program alternatives.
7) Promote new sources and opportunities to grow incomes and build wealth
Greater ownership in common assets (e.g., the Alaska permanent fund). Develop a "data dividend" where people are paid for sharing their personal data. More widespread adoption of employee stock and profit-sharing plans.
8) Support family caregiving
Increase and support better paid family leave. Improve income support for low-wealth families. Develop a universal family care system.
These are a few of the ideas offered by the report. But as Reid Cramer points out, the broad idea is to reinforce the pillars of our society to support everyone.
"In order to fashion a policy response to the emerging millennial wealth gap, it is instructive to acknowledge the pillars that historically have anchored the ladder of economic opportunity," Cramer writes. "For some, these pillars were never there at all; for others, they have weakened in the years since the Great Recession."
- Millennials are poorer than their parents - Big Think ›
- Student debt is keeping millennials single - Big Think ›
- How bad is income inequality? Millennials may be the new peasants. ›
- Stress levels affect Gen X the most, study finds - Big Think ›
- Millennials reconsider finances and future under COVID-19 - Big Think ›
Northwell Health CEO Michael Dowling has an important favor to ask of the American people.
- Michael Dowling is president and CEO of Northwell Health, the largest health care system in New York state. In this PSA, speaking as someone whose company has seen more COVID-19 patients than any other in the country, Dowling implores Americans to wear masks—not only for their own health, but for the health of those around them.
- The CDC reports that there have been close to 7.9 million cases of coronavirus reported in the United States since January. Around 216,000 people have died from the virus so far with hundreds more added to the tally every day. Several labs around the world are working on solutions, but there is currently no vaccine for COVID-19.
- The most basic thing that everyone can do to help slow the spread is to practice social distancing, wash your hands, and to wear a mask. The CDC recommends that everyone ages two and up wear a mask that is two or more layers of material and that covers the nose, mouth, and chin. Gaiters and face shields have been shown to be less effective at blocking droplets. Homemade face coverings are acceptable, but wearers should make sure they are constructed out of the proper materials and that they are washed between uses. Wearing a mask is the most important thing you can do to save lives in your community.
Two massive clouds of dust in orbit around the Earth have been discussed for years and finally proven to exist.
- Hungarian astronomers have proven the existence of two "pseudo-satellites" in orbit around the earth.
- These dust clouds were first discovered in the sixties, but are so difficult to spot that scientists have debated their existence since then.
- The findings may be used to decide where to put satellites in the future and will have to be considered when interplanetary space missions are undertaken.
What are they?<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODgyMDA0NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzNTM1ODc0Mn0.NH33LuauIo__sUBi4tvhwxDcsvhflDFD-Nhx9FjlSNk/img.jpg?width=1245&coordinates=148%2C0%2C149%2C0&height=700" id="cec96" class="rm-shortcode" data-rm-shortcode-id="acb78abe2ab46a17e419ad30906751d6" data-rm-shortcode-name="rebelmouse-image" />
Artist's impression of the Kordylewski cloud in the night sky (with its brightness greatly enhanced) at the time of the observations.
G. Horváth<p>The<a href="https://en.wikipedia.org/wiki/Kordylewski_cloud" target="_blank"> Kordylewski clouds</a> are two dust clouds first observed by Polish astronomer Kazimierz Kordylewski in 1961. They are situated at two of the <a href="https://www.space.com/30302-lagrange-points.html" target="_blank">Lagrange points</a> in Earth's orbit. These points are locations where the gravity of two objects, such as the Earth and the Moon or a planet and the Sun, equals the centripetal required to orbit the objects while staying in the same relative position. There are five of these spots between the Earth and Moon. The clouds rest at what are called points four and five, forming a triangle with the clouds and the Earth at the three corners.</p><p>The clouds are enormous, taking up the same space in the night sky as twenty lunar discs; covering an area of 45,000 miles. They are roughly 250,000 miles away, about the same distance from us as the Moon. They are entirely comprised of specks of dust which reflect the light of the sun so faintly most astronomers that looked for them were unable to see them at all. </p><p>The clouds themselves are probably ancient, but the model that the scientists created to learn about them suggests that the individual dust particles that comprise them can be blown away by solar wind and replaced by the dust from other cosmic sources like comet tails. This means that the clouds hardly move but are <a href="https://www.nationalgeographic.com/science/2018/11/news-earth-moon-dust-clouds-satellites-planets-space/" target="_blank">eternally changing</a>. </p>
How did they discover this?<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODgyMDAzNi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1Nzc4MjQ4MX0.7uU9OqmQcWw5Ll1UXAav0PCu4nTg-GdJdAWADHanC7c/img.jpg?width=1245&coordinates=0%2C180%2C0%2C181&height=700" id="952fb" class="rm-shortcode" data-rm-shortcode-id="a778280a20f1c54cd2c14c8313224be2" data-rm-shortcode-name="rebelmouse-image" />
"In this picture the central region of the Kordylewski dust cloud is visible (bright red pixels). The straight tilted lines are traces of satellites."
J. Slíz-Balogh<p>In their study published in the <a href="https://academic.oup.com/mnras" target="_blank">Monthly Notices of the Royal Astronomical Society</a>, Hungarian astronomers Judit Slíz-Balogh, András Barta, and Gábor Horváth described how they were able to find the dust clouds using polarized lenses.</p><p>Since the clouds were expected to polarize the light that bounces off of them, by configuring the telescopes to look for this kind of light the clouds were much easier to spot. What the scientists observed, polarized light in patterns that extended outside the view of the telescope lens, was in line with the predictions of their mathematical model and ruled out other possible sources. </p>
Why are we just learning this now?<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODgyMDAzOS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY2MjUyNDMyMH0.Zl8GmQ_rJHiL4b7hN0r_YBmgb6_ZqIRvqOVuko2ubpw/img.jpg?width=1245&coordinates=0%2C141%2C0%2C185&height=700" id="87afe" class="rm-shortcode" data-rm-shortcode-id="dd4c0b5088e601d7279cc5eb226f8b7b" data-rm-shortcode-name="rebelmouse-image" />
"Mosaic pattern of the angle of polarization around the L5 point (white dot) of the Earth-Moon system. The five rectangular windows correspond to the imaging telescope with which the patterns of the Kordylewski cloud were measured."
J. Slíz-Balogh<p>The objects, being dust clouds, are very faint and hard to see. While Kordylewski observed them in 1961, other astronomers have looked there and given mixed reports over the following decades. This discouraged many astronomers from joining the search, as study co-author Judit Slíz-Balogh <a href="https://ras.ac.uk/news-and-press/research-highlights/earths-dust-cloud-satellites-confirmed" target="_blank">explained</a>, <em>"The Kordylewski clouds are two of the toughest objects to find, and though they are as close to Earth as the Moon are largely overlooked by researchers in astronomy. It is intriguing to confirm that our planet has dusty pseudo-satellites in orbit alongside our lunar neighbor."</em></p>
Will this have any impact on space travel?<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="c3d797fff5430c64afcb5a49bddc3616"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/Ou8N3v9SFPE?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p>Lagrange points have been put forward as excellent locations for a space station or satellites like the <a href="https://jwst.nasa.gov/about.html" target="_blank">James Webb Telescope</a> to be put into orbit, as they would require little fuel to stay in place. Knowing about a massive dust cloud that could damage sensitive equipment already being there could save money and lives in the future. While we only know about the clouds at Lagrange points four and five right now, the study's authors suggest there could be more at the other points.</p><p>While the discovery of a couple of dust clouds might not seem all that impressive, it is the result of a half-century of astronomical and mathematical work and reminds us that wonders are still hidden in our cosmic backyard. While you might never need to worry about these clouds again, there is nothing wrong with looking at the sky with wonder at the strange and fantastic things we can discover. </p>
New cancer-scanning technology reveals a previously unknown detail of human anatomy.
- Scientists using new scanning technology and hunting for prostate tumors get a surprise.
- Behind the nasopharynx is a set of salivary glands that no one knew about.
- Finding the glands may allow for more complication-free radiation therapies.
PSMA PET/CT technology<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="676e611b970c9b516cace0870447b325"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/RHAyoQF09X4?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p>PSMA PET/CT is a new combination of <a href="https://www.mayoclinic.org/tests-procedures/pet-scan/about/pac-20385078" target="_blank">PET scans</a> and <a href="https://www.mayoclinic.org/tests-procedures/ct-scan/about/pac-20393675" target="_blank">CT scans</a> that is believed to offer a more reliable means of locating prostate cancer metastasis. A <a href="https://www.cancer.gov/news-events/cancer-currents-blog/2020/prostate-cancer-psma-pet-ct-metastasis" target="_blank" rel="noopener noreferrer">study</a> published last spring suggests it may be the most accurate way to diagnose prostate cancer metastasis than any method previously available.</p><p>Prior to PSMA PET/CT, the primary way to look for metastatic prostate cancer was to image the body using x-ray-based CT scans and to perform bone scans, since bone is where prostate cancer often spreads. CT scans, however, often miss small tumors, and bone scans can generate false positives as a result of other damage or abnormalities that have nothing to do with prostate cancer.</p><p>PSMA PET/CT scans track the travels of an intravenously administered radioactive glucose tracer throughout the body. For hunting down prostate cancer, this tracer contains a molecule that binds to the <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1472940/" target="_blank">PSMA</a> protein that's present in large amounts in prostate tumors. The molecule is linked to a radioisotope, <a href="https://netrf.org/2018/11/13/gallium-68-scan-for-neuroendocrine-tumors/" target="_blank" rel="noopener noreferrer">gallium-68</a> (Ga-68).</p><p>In last spring's research, PSAM PET/CT was shown to be 27 percent more accurate than previous methods at finding metastases (92 percent accuracy as opposed to 65 percent). In addition, it was found to be much less likely to produce false positives, and it was particularly good at detecting tumors far removed from the prostate.</p>
A good kind of avoidance behavior<p>"Radiation therapy can damage the salivary glands," says Vogel, "which may lead to complications. Patients may have trouble eating, swallowing, or speaking, which can be a real burden."</p><p>The researchers looked back through the cases of 723 patients who had undergone radiation treatment, interested in seeing if inadvertent radiation of the tubarial glands was associated with the complications experienced by the patients. It turned out that this <em>was</em> the case: In cases where more radiation had been delivered to this area, patients did indeed report more in the way of complications of the type one would expect when salivary glands are radiated.</p><p>Now that we know the tubarial salivary glands exist, therapists can stay out of their way. Vogel says, "For most patients, it should technically be possible to avoid delivering radiation to this newly discovered location of the salivary gland system in the same way we try to spare known glands."</p><p>He's hopeful that that things may be about to get at least a bit better for cancer patients: "Our next step is to find out how we can best spare these new glands and in which patients. If we can do this, patients may experience less side effects which will benefit their overall quality of life after treatment."</p>
A new survey found that 27 percent of millennials are saving more money due to the pandemic, but most can't stay within their budgets.