An interesting article was written yesterday in the Times debunking some of the myths surrounding the causes of income inequality, and drilling down on the actual cause(s). I wrote a summary of it here, but you can read the full article in the Times here, if you like.
Well, today being another day, Quartz published a set of interesting datapoints first published by Credit Suisse related to inequality and how (and why) it is worsening, vis a vis millenials versus their parents, and suggests that millennials are likely going to face the worst income inequality of any generation in recent memory.
Reasons are given:
- Millennials are disproportionately burdened by student debt. 37% of Americans in their twenties had some student debt, making up close to 20% of their total debt holdings. They owe, on average, around $35,000, which is about twice what was owed by graduates two decades ago, after adjusting for inflation.
- Further, the opportunities for higher-wage employment seem to be dropping. Analysis of Federal Reserve data shows that the median millennial household earns around $40,500, 20% less than boomers at the same point in their lifetimes.
- The obsession millenials hold for self-employment and entrepreneurship seems to be mostly marketing hype. In the US, 2% of millennial are self-employed, while 8% of Gen-Xers and boomers can say the same. (Kady caveat: there may be an issue with the event horizon on this one. The average millenial is in their late 20’s, and self-employment picks up in mid-life.)
- The story alludes to the possibility that millenials stand to inherit less wealth than the previous generations, but this is a tough one to estimate and the article doesn’t drill down on the data.
Millennials are set to be the most unequal generation yet
In an economic climate where the top 1% own half the world's wealth, a new analysis by Credit Suisse suggests that…