U.S. Senator Amy Klobuchar, Senate Chair of the U.S. Congress Joint Economic Committee, released a report this week examing the current economic outlook for Millennials.
Klobuchar’s analysis looks at how the economic status has changed for young workers – those ages 18 to 34 – from before the recent recession and throughout the recovery. The report found that young people who enter the workforce at a time of high unemployment and stagnant wage growth often experience persistently lower earnings and savings for much of their careers relative to workers who enter the labor force during stronger economic times.
The report lays out steps Congress can take to help further support young workers, including reducing the burden of student debt, improving workforce training, and making housing more affordable.
“The success of our younger generations is critical to our country’s future. Millennials are the most-educated generation in history, but many of them still face challenges because they entered the workforce during the worst economic downturn since the Great Depression,” said Klobuchar. “By working together on common-sense policies – from making college more affordable to making sure students have the skills they need to get good jobs and compete in the global economy – we can make sure Millennials help drive our nation’s economic growth for decades to come.”
Klobuchar’s report found:
Annual real median income for households headed by a 25- to 34-year-old is down by more than 10 percent from its peak in 2000, though it did tick upward last year after five consecutive years of declines.
The spread between the unemployment rates for young workers and workers ages 35 to 54 widened during the recession – increasing from an average of 3.4 percentage points over the prerecession period to nearly five percentage points in 2009. This spread remains at more than four percentage points.
Nearly 17 percent of Millennials are underemployed, down from a peak of nearly 22 percent of young adults ages 18 to 34 in 2010, but still well above the roughly 12 percent rate that prevailed on average in the years leading up to the recession.
One sign of the recession’s impact on Millennials is the declining rate at which young people are starting households and buying homes. To some extent, this is a result of longer-term trends. But research shows a substantial portion can be attributed to recent economic conditions as well.
Millennials have a higher rate of college education than previous generations. Sixty-three percent of Millennials ages 25 to 34 have at least some college education, compared with 52 percent of people in this age bracket in 1994.
The amount of student loan debt carried by Millennials may have a significant impact on our economy. Record levels of student debt can restrict career choice for Millennials, lead them to delay major purchases, and generally restrain consumer spending.