Millennials Have No Savings; Here’s Why

Since the Great Recession began, the wages of young workers have plummeted in all major industries except health care.

Millennials Have No Savings; Here’s Why Photo (cc) by avlxyz

It’s hard to save money when your wages haven’t kept up with the cost of living.

According to The Atlantic, that’s the unfortunate reality for millennials in America. When you adjust for inflation, the median wage for workers between the ages of 25 and 34 has slumped in all major industries, with the exception of those working in health care, since the Great Recession began.

More than 25 percent of young workers are employed in retail, leisure, wholesale and hospitality, where inflation-adjusted wages have plunged 10 percent since 2007. The Atlantic said:

To be clear, this doesn’t mean that most of this cohort are seeing their pay slashed, year after year. Instead it suggests that wage growth is failing to keep up with inflation, and that, as 20-somethings pass into their 30s, they are earning less than their older peers did before the recession.

In general, wages for young people are increasing 60 percent more slowly than overall U.S. wages, The Atlantic said.

According to a recent report from Young Invincibles, there is more bad news for millennial workers:

In addition to declining wages in some sectors, research has shown that millennials are staying with their employers for a longer time than previous generations did at the same age, locking them into lower-wage positions. While these early-career positions are vital for job training, decreased job mobility may also reduce opportunities for wage growth in [the millennial] generation, repressing incomes for years to come.

We told you in November that millennials, those born roughly between the early 1980s and the early 2000s, have a savings rate of negative 2 percent, which indicates they’re spending more money than they’re earning.

“It’s easier to see why young Americans aren’t saving any more than we used to: Their wages are falling behind the cost of basic goods and many are going into debt to pay for a college degree,” The Atlantic said.

Were you aware of the deteriorating wages in the jobs held by many millennials? Share your thoughts below or on our Facebook page.

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