The Wealth Gap Between Older and Younger Adults Gets Even Bigger
Adding more fuel in the "Sucks to Be Us" or "Generation Jobless" vein, a new analysis of Census data from the Pew Research Center finds the wealth gap between older and younger adults gets even bigger, the Associated Press reported.
Adding more fuel in the "Sucks to Be Us" or "Generation Jobless" vein, a new analysis of Census data from the Pew Research Center finds the wealth gap between older and younger adults gets even bigger, the Associated Press reported. This won't be news to Millenials occupying their old bedrooms back at their parent's home, who, as Noreen Malone pointed out in her New York magazine story, are already coming to grips with the notion that they might not be better off than the previous generation. But the Pew analysis looks stark:
As a result of these divergent trends, in 2009 the typical household headed by someone in the older age group had 47 times as much net wealth as the typical household headed by someone in the younger age group–$170,494 versus $3,662 (all figures expressed in 2010 dollars). Back in 1984, this had been a less lopsided ten-to-one ratio.
In this analysis, Pew Research divides Americans into the 65 year-old and older group and the 35 year-old and younger group. Unsurprisingly, as you can see from the chart, the 65 year-olds have traditionally done better than 35 year-old age group, but it's huge, divergent trends that look worrisome, as the Associated Press reports from the Pew data:
The 47-to-1 wealth gap between old and young is believed by demographers to be the highest ever, even predating government records.
As root causes, Pew Research singles out housing, specifically declining home equity. And there are plenty of indicators to look to. Last week, for instance, a new report showed that the average student loan debt for recent graduates was estimated at $25,250, up 5 percent from last year. Or, as The Wall Street Journal pointed to today in their depressingly named "Generation Jobless" series, unemployment for those under the age of 24 means youth have already lost ground in earnings:
The unemployment rate has been above 16% for 32 months—and counting. For 29 of those months, the rate has been above 17%, reaching a record 19.5% in April of last year.
...If history is a guide, when today's young graduates do find a job, they will earn 9% less on average than if they had finished college in better times, according to a recent Columbia University study.