Millennials earn less than their parents did at the same age (despite being better educated)

 
Courtney Goldsmith
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Millennials finally have a good comeback to their parents
Millennials finally have a good comeback to their parents (Source: Getty)

Millennials earn 20 per cent less than their parents did at the same age despite being better educated as wages have shown a downward trend, new research suggests.

The report that was released today assessed the financial state of today's young adults by measuring income, retirement savings, home ownership, assets and net wealth.

The baby boomer generation (young adults aged 25-34 in 1989) was more financially secure than today's millennials (young adults aged 25-34 in 2013) across all categories.

Read more: Pay gap at lowest ever level for young women but jumps again at this age

The kids never stood a chance

Millennials who entered the job market during an economic downturn started on a lower rung of the economic ladder, advocacy group Young Invincibles found.

That will project lower earnings for today's young adults throughout their working lives.

"Incomes earned early in one's career often set the stage for lifetime earnings, with the highest growth occurring in the first decade of work," the report said.

Read more: Augmented reality architect or digital banker? 13 future millennial careers

In 1989, the median household income for young adults averaged $50,910 (£41,873) compared with $40,581 in 2013, analysis of Federal Reserve data by the US group suggested.

The report said estimates show the one million young adults who experienced long-term unemployment during the recession will collectively miss out on $20bn in earnings over the next decade, which is equal to $22,000 per person.

Read more: Generation unlucky: Millennials feel sorry for themselves financially

Education is no longer an option

Education is still the best wait to find financial security today, however. Regardless of student debt, university graduates earn greater incomes, are more likely to have saved for retirement and in some cases have been protected from macroeconomic declines in financial security.

However, a young adult without a university degree in 1989 earned roughly the same income as a college graduate with student debt today.

The study said home ownership continues to be the primary means for families to build and transfer wealth, but eight per cent fewer millennials are buying their own homes compared with young adults in 1989.

And when baby boomers were young adults, they owned twice the amount of assets as young adults in 2013: $61,277 compared with $29,350.

Read more: The kids don't want rented homes: They want to buy, like everyone else

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