A study by a group of research organizations have determined that men in their thirties are earning less, when adjusted for inflation, than their fathers earned in their thirties. Studies like this help to explain the reported financial condition of younger households throughout the United States.
Relying on Census Bureau figures, the study’s authors found that after adjusting for inflation, men in their 30s in 2004 had a median income of about $35,000 per year, for a 12 percent drop compared with $40,000 per year for men in the same age group in 1974… Similarly, American families, which experienced a 32 percent increase in income levels between 1964 and 1994, saw household income growth slow to 9 percent between 1974 and 2004, according to the report. (CNN Money)
I’ve heard people say that every generation will be better off than their fathers thanks to economic progress, but this doesn’t seem to be true at the moment for those in my age group. Perhaps the relative income stability of our father’s generation allowed those in my generation to pursue interests that aren’t as income-driven.
Any thoughts?
Subscribe
Hello. Reading the Pew report’s fine print tells me that the report should be ignored because there are too many strange decisions in the methodology.
J: Which fine print? What strange decisions? Please share.
I haven’t read the fine print, but I am very skeptical about the report. I grew up during the 1960’s and 1970’s. My observation is that people today are far more affluent than when I grew up.
If incomes are lower, I wonder to what extent it reflects lower wages of recent immigrants, perhaps that people are delaying marriage longer and therefore are not as focused on earnings, and perhaps inflation has been overstated.
PaulD is on the right track. I posted an article with specific examples for people to review (click name link) but those examples are only the tip of the iceberg. Thank you.
One thing to keep in mind is that there may be quality of life improvements as well. I think that’s the real judge of “better off”. The spread of the World Wide Web, for instance, gives me information to save more money. So while the average cost of a gallon of milk may have gone up compared with wages, I can offset that by saving or making money elsewhere, like the deals on FatWallet.
Here’s an anecdotal vote in the other direction—I’m less than 30, and make more than my dad (40 something) makes now.
PaulD, are people truly more affluent now, or are they simply giving the appearance of being more affluent, when in fact they’re doing it all on credit and setting up for a major collapse in a few years (subprime mortgages, leasing a fancy car or buying far more car than they can really afford, etc.)?
Darkboy asked, “PaulD, are people truly more affluent now, or are they simply giving the appearance of being more affluent.”
Perhaps many people are living on credit, but there is little doubt in my mind that people are far more affluent today than in the 1970’s and 1980’s. I could give example after example, but a few will suffice. I remember buying a new stereo when I graduated from college in 1980. I spend about $350.00 in 1980 dollars. I could purchase now a superiour stereo system for less than $100.00. The computer I am using now has more computer capacity than the top university super computers that existed in 1980. I have a upper middle income salary, but live in a house that was built by a high-level executive of a major corporation in the 1960’s. Common , almost universal conviences, that exist today such as central air conditioning, cable tv, second and third automobiles and automatic garage door openers were found only in affluent neighborhoods during the 1960’s.