- Young adults ages 25 to 34 have only seen a $US29 income increase from 1974 to 2017, adjusted for inflation, a SuperMoney report found.
- Older age groups saw an increase ranging from $US2,900 to $US5,400 in the same time period.
- Income growth hasn’t kept up with staggering increases in home prices and education.
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Paychecks are anything but fat for America’s young adults.
Those between ages 25 and 34 have only seen a $US29 income increase since 1974 when adjusted for inflation, according to a new SuperMoney report that analysed US Census Bureau data. That year, they were earning an average of $US35,426. By 2017, that jumped to a mere $US35,455.
These numbers are sad enough on their own, but they particularly pale in inflation-adjusted comparison to other age groups. Adults ages 35 to 44 made nearly $US2,900 more in 2017 than their 1974 counterparts did. And those ages 45 to 54 saw an income growth of nearly $US5,400 over that same time period.
The income increase – or lack thereof – for young adults is especially troubling when pitted against skyrocketing expenses for essentials.
The report looked at data from the US Federal Housing Agency and found that the median price of home sales has increased by 39% in roughly the same time frame. Meanwhile, national health care costs per person have increased by $US9,000 since 1970, and the cost of education has more than doubled since 1971, according to the report.
Cost of living and income increases are out of balance
The findings underscore a 2018 report from Student Loan Hero that found that rent, home prices, and college tuition have all increased faster than incomes in the US.
Housing has become so expensive that millennials are waiting longer than ever to buy homes. A report by SmartAsset found that in some cities, the median home outweighed the median income by so much that it could take nearly a decade to save for a 20% down payment.
And the rising cost of college is especially problematic considering that students are now borrowing more than ever. The national total student loan debt is $US1.5 trillion, and the average student debt per 2018 graduate who took out student loans is $US29,800.
It’s a shock for millennials, who came of age during the Great Recession, to find that the cost of college doesn’t necessarily lead to higher earnings. Living costs, student loan payments, and lower earnings make it difficult for them to catch up financially.