This time it’s wages for millenials:
And there’s plenty of people commenting about how this proves that life isn’t fair, capitalism doesn’t work, etc etc.
Well, I got bad news for you. This map basically just reflects median wages and the fact the millenials are on the younger side of the work force.
The Social Security Administration compiles this kind of data all the time: https://www.ssa.gov/OACT/COLA/central.html
The median wage for everyone in the US in 2017? 31,561 USD. That’s actually pretty close to what we see in the map above.
Of course, being 20-38 and at the beginning of their productive years, the income will always skew lower when compared to the entire working population.
What people seem to be focusing on is the fact that they can’t afford a middle or upper-middle class lifestyle on these wages. But that’s not unique to millenials. The vast majority are broke, barely keeping pace with expenses, or going progressively more into debt.
But there are a couple different factors at play here. First and foremost, today’s lifestyles have huge maintenance costs that are pretty much brand new. Got a cell phone, wi-fi, and netflix? That’s 150-200 USD per month just to get started. Then there are needed-for-living utilities and rents.
According to hotpad, median rents in the US are now $1500/mo.
For a 2-bedroom specifically, it’s a bit less at $1,225
Add on electricity, water, and maybe gas/heating oil and now the monthly nut is somewhere in the neighborhood of $1750-$2k.
And then there’s food, which can vary wildly depending on lots of factors.
So let’s say you’re a young-ish person looking at these costs, what are you to do?
If it were me, I’d look at that 2-bedroom and think about a roommate. From personal experience as a
If you are sharing living costs, that brings your personal nut down to about $1000 USD/month plus food. Now making 20-30k is actually doable, and the people whining about it are mostly wanting to just live beyond their means.
That’s somewhat understandable. Their parents probably have a higher standard of living. It’s nothing magic though. That’s simply the result of being older, with more experience, and the ability to contribute more to the productive world in exchange for more money.
So lifestyle inflation is a thing, and it’s natural to want more material comforts than you can actually buy.
The other huge factor is the monetary system actively conspiring against you as a wage earner to accumulate wealth. I could go on and on about this, but most of the people reading this probably are already aware of how inflation is screwing you each and every day unless you are part of the financial system on the receiving end of the Cantillon Effect.
Finally, the last factor that people have to keep in mind is that comparing current young people life to baby boomer young life is a faulty comparison. The American baby boomers are the luckiest group of people in the history of the world. America came out of World War II practically unscathed and the rest of the industrialized world was destroyed. The relative wealth of Americans to everyone else was enormous. It’s still high today, but the disparity has been shrinking for decades. So yes, baby boomer dad was able to work one job at the local factory and support his wife and children – because there were no other factories! They all got bombed!
Then those other places started to rebuild. New places started to industrialize. And a lot of those high-paying blue collar jobs went to those cheaper places like China. That’s why the Rust Belt is now a thing.
Side Note: The Chinese are starting to get a taste of this as places like Vietnam are coming online and out-competing for bottom-end labor.
So what is the solution for those young people today?
It’s two parts: Get out of USD as much as possible and watch your lifestyle creep.
It’s easy to sit here and pontificate about getting more skills, becoming more valuable to the market, and all that. But in reality there are people out there who just aren’t equipped to do that. Yes, go make yourself more valuable if you can. If you can’t though, control what you can control
And at least not losing to inflation is a good first step.