Wealth Blog

Finance Blogs » Wealth » Shrinking incomes for young adults

Shrinking incomes for young adults

By Crissinda Ponder · Bankrate.com
Thursday, June 28, 2012
Posted: 11 am ET

If you’re younger than 45, getting your desired income is more difficult than it was just a decade ago.

According to the Federal Reserve Board’s latest survey of consumer finances, median household income for Americans ages 35-44 fell 14 percent between 2001 and 2010 -- to $53,900 from $63,000.

For those in the workforce who are younger than 35, their median income also dropped 14 percent during that decade, going from $40,900 to $35,100.

The most depressing statistic: Working Americans with college degrees saw their median income fall from $83,100 to $73,800 -- an 11 percent decline.

More recently, between 2007 and 2010, the decline in median income hit more highly educated families, families with heads-of-household younger than 55, and families living in the South and West regions of the country, the survey points out.

Overall, median income declined across demographic groups. Only a few groups, such as retirees, experienced rising or stable incomes.

The Federal Reserve Board cites families’ decision-making and the state of the broader economy for affecting finances.

The trickle-down factor of our hemorrhaging economy seems more pronounced, as the young 'uns in the workforce younger than 35 have to pull more than their fair share of weight and work even harder for a few extra bucks.

As a (very) recent college graduate, I find these numbers to be disturbing -- no, downright scary. If that income level keeps falling, will I be able to live off an income characteristic of those in the middle 50 percent of all earners in my age range? Do I need to beef up a side hustle and make it one of my primary sources of income?

Maybe working from home and holding down a full-time job don’t seem too tough to handle after all, especially after being slapped in the face with these numbers.

Crissinda Ponder is a reporting intern for Bankrate. Follow her on Twitter @CrissiPonder.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
26 Comments
Susan Ford
July 05, 2012 at 11:46 am

You ain't seen nothing yet. Just wait until Obamacare is fully implemented. You will discover albeit too late that your bank balance is shrinking a hell of a lot more. Obamacare is going to be punitive i.e. all of us will be paying substantially more for our healthcare. My insurance premiums just this year alone have shot up 30%, my deductible has almost doubled and my co-pays have more than doubled already which makes doctor visits even more expensive and the costs of my prescription drugs have noticeably become very expensive.

The young generation of today have a lot to look forward to when they graduate from college and are no longer entitled to remain insured through their parents who previously paid their medical bills. As the US Supreme Court determined that Obamacare is a "TAX" The Court said that, "Congress effectively has Unlimited Authority to tax the American people. Above all, the Supreme Court has ratified a law that fundamentally alters the relationship between the federal government and the American people. The Court has upheld a law that I believe is not only unconstitutional but also fails to improve the quality of health care in this country.

At the most fundamental level, the American people deserve common sense, patient centered health reforms: targeted reforms that increase access to affordable, quality health care and place the individual and families in control of their own health care decisions.

However, from now on and over the next several years you will discover that your personal freedoms and civil liberties have eroded as this Government not only infringes your rights between doctor/patient but this Govt. will dictate health policies and before you realize what happened your health care will be rationed and you will discover that certain health services are no longer available to you because your health care provider deems the service to be too costly. Obamacare is the British NHS in all but name. Please think twice before voting for this Obamanation. You will rue the day you voted for health care reform that essentially becomes a "Mill Stone around your Neck" that you can't shake off. The financial burden on your shoulders will increase exponentially as the taxes you will be paying soar rapidly.

Susan Ford
British Expat. now living in State of CA.

Eddie
July 05, 2012 at 8:45 am

I don't think we can say 'it's all good" anymore. Now "it's all bad". I don't blame any political party I blame both. How this country got in this position I will never understand, it has been a large number of things that have gotten us here. Companies sending Jobs oversees, political parties siding with lobbiest, BANKS. I am suprised we did not go into a depression. If it weren't for the FED's print press we might have. But it is still only paper. I guess it's a wait and see.

DixieCrat
July 05, 2012 at 8:21 am

And yet, most of these young folks will vote for Obama, even though he has done nothing to address this flagging economy (one could argue he's made it worse) and he's solely responsible for burdening young Americans with Obamacare. Even if you like the idea of universal health care, at whom do you think the individual mandate is directed? Old people, who are already covered by MediCare? Poor people, who are already covered by MedicAid? Nope. It's young people, who are typically healthy and don't consume much of the healthcare pie, yet are now going to be made to pay into a system with rising costs and foot the bill for others... all while their own income is falling. Anyone who votes for Obama this time around should have his head examined.

Jim
July 05, 2012 at 8:20 am

Any statistics on the income trends of CEO's, particularly in the medical, health, and financial industries over the same period? I'd really like to see those figures. And of course, I'm sure our elected officials in the federal government - those people we send to Washington to serve us - are suffering right along with us as well. This is not the United States that came out of the Revolution. Our Founding Fathers are rolling over in their graves.

onofrio
July 05, 2012 at 7:47 am

" everyone "" Please read """ The Price of Inequality " by Joseph e Stiglitz...There a reason why this is happen in our Society"" No more middle class...Just Rich or poor...!"

Bill Harris
July 05, 2012 at 12:22 am

Unfortunately, Everyone needs to re-evaluate their position in this world and to try to keep their position as close to normal as possible. This WILL be the new norm from now on is what I am afraid of. There is definately something amiss with general everyday life that everyone needs to acknowledge and act upon for their own sake.

Jeff
July 01, 2012 at 5:03 pm

Great job! Most of that I didn't know..

CJB
June 28, 2012 at 2:42 pm

The numbers you quote from the Federal Reserve's report are in inflation-adjusted dollars, and should be noted as such. Also, the decline in income among college educated Americans needs to viewed in the context of increasing college enrollments over the same time period.

Inflation adjusted incomes for high school graduates declined even more in percentage terms, 12%, than college graduate incomes over the same period. Times may be hard, but these numbers suggest that things are even harder for those without a degree.

Linda
June 28, 2012 at 1:18 pm

Great article! Very informative!

Ricky Andrews
June 28, 2012 at 12:55 pm

These surveys numbers are very disturbing and discouraging. With this being my last year in college, the future job outlooks are getting dimmer. Not to mention the student loans I have to repay back after six month, this is very scary if I haven't found a job. It makes me think maybe i should have starting a business right after high school, instead of cumulating debt in college without a promised job afterwards.
Keep them coming Ms.Crissinda Ponder