Gen Y Struggles With Declining Wages
Whether it’s rising student debt levels, the Occupy movement, or fitting into a changing job market, news outlets (including StateImpact) are increasingly interested in how Gen Y is adapting to the slow recovery.
Their overarching conclusion: Coping with a struggling economy has clearly been tough on the early-30’s-and-younger set.
Now, the Wall Street Journal reports on new data providing a snapshot of the monetary pressures this group faces. Reporter James R. Hagerty writes:
“Young people entering the job market are taking the brunt of the downward pressure on wages caused by high unemployment, according to a new analysis of pay trends.
In data compiled for a coming report, the Economic Policy Institute, a center-left think tank in Washington, found that the average inflation-adjusted hourly wage for male college graduates aged 23 to 29 dropped 11% over the past decade to $21.68 in 2011. For female college graduates of the same age, the average wage is down 7.6% to $18.80.
‘New college graduates have been losing ground for 10 years,’ said Lawrence Mishel, president of the institute, which derived the figures from regular government wage surveys. The drop in average wages for young adults is in contrast to U.S. government figures showing that average inflation-adjusted hourly wages for production and nonsupervisory workers of all ages and education levels are up 3% from a decade ago.”
“Downward pressure on wages is likely to persist as long as unemployment remains high. At the current rate of job growth, the U.S. is still at least four years away from ‘a normally functioning labor market’ with a rough balance between supply and demand for labor, said Lawrence Katz, an economics professor at Harvard University.”
And, Hagerty notes, while federal figures show a slight increase in average hourly wages over the past ten years, that’s mainly because the lowest-paid workers have been laid off. Eliminating them from the workforce has in turn bumped up the average pay rate.