Millennials Now Earning a Median-Wage Income at Age 30


Through analyzing about three decades of census data—from 1980 to 2012—the study found that on average, young workers are now 30 years old when they first earn a median-wage income of about $42,000, a marker of financial independence, up from 26 years old in 1980.

About a third of adults in their early 20s work full time, a proportion that rises to about half of adults in their late 20s. The labor-force participation rate for young people last year declined to its lowest point in about 40 years, according to the report.

WSJ takes a look at a new report from the Georgetown University Center on Education and the Workforce, which shows how much more difficult it is for millennials to reach financial stability and find their footing in the workforce. One of the reasons it’s taking millennials longer to earn the median-wage income of $42,000 is that factory jobs, which used to pay decent salaries and didn’t require much more than a high school education have disappeared in the recession (not to mention, jobs in general). The factory jobs that are available require advanced skills, and those who can’t score full-time work are cobbling together part-time work in the service and retail industries while taking on internships to keep their resumes relevant. Every generation has had to hustle a little bit, but this one has a lot stacked up against them. [Report here.]

Photo: Vernon Chan

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12 Comments / Post A Comment

Marge (#4,715)

What was the median wage income in 1980? How much of this number has been adjusted for inflation I wonder.

eta: can’t read the WSJ report without a WSJ Paid Account

@Marge Adjusted for inflation, 1980 median personal wage would be about $35,500 in 2013 dollars.

In any case if you’re interested in the average age at which a person achieves the median income then inflation isn’t really a factor.

Marge (#4,715)

@stuffisthings But wouldn’t it be a factor if the median income is changing over time? Is the median income dropping or going up? How much does it fluctuate year to year? Numbers! How do they work.

@Marge Well I think the way they measure it is in a single year (i.e. what is the median age of a person earning the median income?) rather than tracking individuals over time. So really they’re talking about the distribution of ages across incomes in a single year.

For the record, median incomes went up slightly through the 90s, after a dip for the 91-92 recession, then fell slowly during the Bush years before collapsing completely after the financial crisis, so that a typical family now earns less than in 1989. As you may have heard, almost of the productivity gains of the last 30 years have gone to the very richest Americans.

You are right that inflation could impact how quickly someone moves up the ranks, in theory. Today most income growth for younger people comes when they change jobs, which is harder to do in a depressed, high-unemployment economy. A 26-year-old in 1980 would have entered the labor market during a similarly depressed, high-unemployment time. But the late 70s and early 80s were also a period of *very* high inflation in which (nominal) raises for employed people would be common, making it potentially easier to secure (real) raises in the process — i.e. you might get a 10% raise in an 8% inflation year, equating to a 2% real increase. Whereas today you’d be lucky to get a raise that’s even commensurate with inflation.

@fo (#839)

@stuffisthings “median incomes went up slightly through the 90s, after a dip for the 91-92 recession, then fell slowly during the Bush years before collapsing completely after the financial crisis”

In ‘Real Dollar’ terms. Important to clarify that, esp with context of this exchange. Median family income is below ’89 in real dollars, but appears much higher bc we pay for things in nominal dollars.

@fo (#839)

@stuffisthings Also: “measure it [] in a single year (i.e. what is the median age of a person earning the median income?) rather than tracking individuals over time.”

I don’t think that’s right, bc the thing measured is ‘when a ‘typical’ young person first earns the median income or more’ and that (1) requires some degree of tracking and (2) is going to be heavily influenced by the un- and under-employed, like in this state noted in the article: “Between 2000 and 2012, the employment rate for people ages 21 to 25 dropped from 84% to 72% overall”.

@@fo Right, exactly.

Real dollars = dollars that have been somehow indexed for inflation (e.g. 2013 dollars, or 1980 dollars, doesn’t really matter).

Nominal dollars = actual dollar amounts in whatever year you’re talking about.

So if there was, say, 10% inflation, your paychecks might show that you earned $30,000 in year 1 and $33,000 in year 2, but your ‘real’ income hasn’t changed because what cost $100 in year 1 now costs $110 in year 2. (Right now inflation is pretty low, around 2%, so most people don’t notice that much, but over time it’s really important. Inflation in 1980 was ~15%.)

Of course economists would come up with a system where an actual dollar bill you hold in your hand is a “nominal dollar” and an abstract mathematical construct of value is a “real dollar.”

@@fo Nope, those figures are all based on the Current Population Survey, so there’s no way to track one individual across multiple surveys. And anyway if you did do some kind of large cohort tracking study the results should basically replicate the age distribution shown in each month’s CPS. Looking at un/underemployment in a given year can still be used to explain changes in later years. For example, high unemployment in the early 1990s probably caused Gen-Xers to attain the median income at a later date than they would’ve otherwise.

@fo (#839)

@stuffisthings “Nope, those figures are all based on the Current Population Survey, so there’s no way to track one individual across multiple surveys.”

Then it’s just a made up stat, at least **as reported**. It claims to be when the ‘typical’ (aka, approximately median) person first experiences something. Can’t figure that out without knowing something about the history of your subject cohort. Unless one is guesstimating.

Alternately, it could be a sorta-mis-reported representation of when the median member of [cohort] is making the median wage. If it is this, then it’s all about the un- and under-employed among the under-30s–if only ~50% of your cohort is employed full-time, it’s hella hard for 51% of them to make over the nationwide median income.

@@fo FWIW I don’t think they’re averaging in the out-of-labor-force folks as having zero income, they’re just saying that high unemployment implies delay of first job which explains lower incomes for younger people who are employed.

e.g. I got my first “real job” which is just about median income (and ~half the median income for people with the same education as me) at age 28 because I was marginally employed or in school/Peace Corps for most of my 20s. So let’s say I was in the CPS sample this year, but not in previous years, they could still look at my income now and the unemployment/labor force participation rate over the past decade and infer the reasons why I’m not earning more.

garysixpack (#4,263)

Factory jobs have been disappearing, period. I don’t think the most recent recession mattered much, one way or the other.

Also, jobs in general require more credentials than in 1980. A Bachelor degree is often the minimum required now when graduation from high school used to be enough. A later start means more years to reach the median.

xenu01 (#4,239)

@garysixpack Yup. It took me graduating from college to break the $10 an hour ceiling.

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