The largest generation in the United States is in financial trouble, and that's a problem for all Americans. A new study analyzing federal data concluded that millennials, born between 1980 and the mid 2000s, are earning considerably less than their baby boomer parents did as young adults. That central finding has important implications for employment, housing and the nation's overall financial health — and President Donald Trump and Congress should take note.
The report by the advocacy group Young Invincibles used the Federal Reserve's Survey of Consumer Finances to compare 25- to 34-year olds in 1989 with millennials in 2013. They found that millennials' income is, on average, 20 percent less than boomers'. In real dollars, 25-year-olds in 1989 had a median household income of about $50,000. The figure for millennials: about $40,000. What's more, despite being better educated, millennials have more debt, save less and own fewer assets than the boomer generation. Those are all trends moving in the wrong direction.
Representing one-third of the U.S. population, millennials will gradually come to make up a larger and larger share of the workforce. In Florida, millennials actually outnumber seniors, but Florida still has the highest population percentage of people over 65 of any state, about 20 percent. That means seniors — and soon-to-retire boomers — need millennials to be working and paying into the entitlement programs on which older generations will increasingly rely.
Part of why they're starting so far behind is the increased cost of college. Many millennials are saddled with hefty student loan debt, while earning only slightly more on average than boomers without a degree did. A college education remains a sound pathway to prosperity, but it's not the only way. Some of the fastest-growing jobs in Florida don't require a four-year degree. Demand for skilled trade workers — carpenters, plumbers, electricians, auto mechanics — is expected to continue rising, with strong starting salaries awaiting those entering the trades. Health care is the job growth juggernaut, and many positions require only a technical certificate or two-year degree. Physical therapist assistant, which requires an associate's degree, pays nearly $50,000 starting out. Investing in trade and vocational programs should take on a higher priority in Florida, along with making college more affordable and alleviating student debt.
Housing is the other half of the coin. Millennials have helped drive the nationwide trend in declining home ownership because they're choosing to rent or can't afford to buy. Either way, ensuring reasonably priced housing in a hot real estate market remains a challenge. In St. Petersburg and Tampa, high-priced condos continue to crowd downtown skylines, so it's encouraging to see plans take shape for more moderately priced apartment developments in both cities. Republican Sen. Jeff Brandes of St. Petersburg is taking on the issue of affordable housing, which shouldn't just be a subsidy for the poor but also a tool for building the middle class.
The news about millennials isn't all bad. A White House Council of Economic Advisers report in 2014 noted that their rate of college attendance — the highest of any generation — means that more minorities are earning degrees than ever. Millennial women enjoy more equity in the workplace than their predecessors. As a generation, they have grown up being shaped by technology, making them better prepared for the challenges of the new economy. But the new economy, where manufacturing jobs are scarce, wages are lower and benefits are leaner, is also taking a toll on the next generation of workers. As the president and Congress talk about overhauling tax policy and reshaping the economy, they should pay particular attention to the plight of the millennials.