A woman checks a news website on her smartphone before boarding a train home at the end of her workweek in Chicago, March 2015. Source: AP/M. Spencer Green
Washington, D.C. — (ENEWSPF)–March 3, 2016. More productivity, but no payoff: That’s the bottom line of a new analysis from the Center for American Progress that compares median compensation for 30-year-olds from the Baby Boomer generation, Generation X, and the Millennial generation. The analysis reveals that Millennials today make around the same amount of money as 30-year-olds in 1984—when adjusted for inflation—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. Median hourly compensation for today’s 30-year-olds is also approximately $1 less than it was for Generation X workers in 2004.
“The current U.S. labor market is still one where Millennials compete for jobs instead of employers competing for Millennials by offering them higher wages—a fact that is borne out by the data, which show that the median hourly compensation of today’s 30-year-olds has scarcely budged from that of previous generations,” said Brendan V. Duke, Associate Director for Economic Policy at the Center for American Progress. “More education and more productivity haven’t made the difference, so the question for policymakers is, how do we move the needle on millennial wages? Improving worker bargaining power—which has been severely weakened over the past few decades—and better work-family policies may be the keys.”
CAP’s analysis shows that 30-year-olds experienced slow and even negative real pay growth from 1979 to 1996, a large jump from 1996 to 2002, and then a renewed downward march from 2002 to 2014. The result is that the median compensation for 30-year-olds in 2014 was the same as for 30-year-olds in 1984, meaning that 30 years of economic growth has not trickled down to today’s 30-year-olds. The data are particularly striking because higher levels of education and a more productive economy have been two traditional remedies for sluggish wage growth, and these data strongly suggest that they are not by themselves the solutions to raising the pay of Millennials.
Perhaps the most important reason why Millennials’ compensation did not grow as expected is that they entered a labor market where the deck is stacked against workers; CAP’s analysis notes that Millennial workers have spent most of their careers in a loose labor market. CAP’s issue brief lays out specific solutions to raising the pay of Millennials, including restoring worker bargaining power and reducing or ending the motherhood penalty through policies such as paid family and medical leave and accessible, affordable child care—especially key, as many Millennial women are now beginning to have and raise children.
Click here to read “When I Was Your Age” by Brendan V. Duke.
Source: http://www.americanprogress.org
