Has Being a Young Adult Always Been a Financial Nightmare?
Young people have never had it easy, but they have certainly had it better.
Young adulthood has always been financially perilous. But is it more perilous today than in the past? That question has come my way a fair number of times, ever since I shared a bit of new research showing that roughly a quarter of Americans spend at least a year living below the official poverty line between the ages of 25 and 34.* (More than 4 in 10 spend a year earning less than 150 percent of the poverty line, as shown in the graph below).
That figure provided a very longterm view of things, as it was based on an analysis of Panel Study of Income Dynamics data from 1968 through 2009. More than a few readers wondered: How have things changed? After all, we just lived through a little recession that ratcheted up poverty across the board.
Unfortunately, I couldn't convince Mark Rank, the Washington University in St. Louis professor who provided me with the data in my original post, to send over any more numbers from his forthcoming book (he wants to save a few surprises for the launch). But all is not lost. In 2009, Rank and his collaborators published a paper on how the odds of experiencing poverty in this country shifted between 1968 and 2000. The figures aren't 100 percent comparable to the graph up above, but they give us a strong sense of how times have changed.
So what do we learn? Young people have never had it easy, but they (probably) have had it better. By the turn of the century, 20- and 30-somethings were much more likely to experience a stint in poverty than they had been in the 1970s.
That said, I think we should be cautious about simple comparisons across time. The truth is, poverty in 2000 was not quite like poverty in 1973. Consumer goods that make life more bearable (think air conditions and decent televisions) have become cheaper and more commonplace over time. We have cell phones and Internet. And some changes in the safety net, though certainly not all of them, have made life near or right above the poverty line a bit less harsh. You don't necessarily have agree that the poor are far better off today than at the start of the Reagan era, as some conservatives will argue. But their standard of living has improved in ways that make it hard to say definitively whether Gen Xers or boomers really had a rougher time when they were young.
There is a bigger picture story here, however. During these thirty years, poverty became more common for Americans of all ages. Whether you think life has become more pleasant overall, it's also far more unstable.
A quick addendum: No matter if you're young or old in U.S., your chance of experiencing poverty has an overwhelming relationship to the color of your skin. I've been remiss in failing to discuss that in these posts. In their 2009 paper, Rank & Co. found that, between 1985 and 2000, white men in their 20s were about half as likely to spend a year in poverty as nonwhites, for instance. In their 40s, they were about one-third as likely.
As I've written, being a young adult in America is a financial nightmare. But it's far more of a nightmare if you're a young person of color.
*Correction, November 16: A previous version of this article stated that nearly 4 in 10 Americans between the ages of 25 and 34 spend a year living under the official poverty line. As noted above, the correct statistic is that 4 in 10 spend a year living below 150 percent of the poverty line. As a result of that error, it incorrectly stated that a young adult was more likely to spend a year in poverty than earn a bachelor's degree.