It seems like every other day, there's a new study or article about millennials and about what they are or aren't buying. Why aren't young people buying diamonds? Or cars? Or fabric softener? Well, data from a recent piece in Business Insider could offer some insight into why millennials aren't spending the way some expect them to. According to data provided by Business Insider, and covered in an article in Playboy, how much does the average millennial make? Outside of Washington, D.C., the median income of millennials doesn’t exceed $26,000 annually. So, maybe we aren't buying all that other stuff because we're focused on things like, you know, buying groceries and feeding ourselves instead.
With news like the fact that New York is the first state to make college tuition free at four-year public colleges through the new Excelsior Scholarship, millennial finances are a focus again. And the data from Business Insider shows that, across the board, young workers are struggling to earn a significant salary. Using data from the Minnesota Population Center's 2014 American Community Survey in the Integrated Public Use Microdata Series, Business Insider worked out that the median annual total personal income for employed millennials — based on the Pew Research Center's definition of millennials as being Americans born between 1981 and 1997 — ranged from a low number of $18,000 per year in Montana, to a "high" of $43,000 in the District of Columbia.
As a result of historically high student debt, and a job market that is more competitive than ever before, Business Insider reported that young people today aren't earning as much money as their parents did when they were younger. By comparison, as Playboy reported, "back in the 1980s, when millennials’ parents were 25-34 years old, their median income $40,560." That's quite the wage gap, huh?
According to the data, the median millennial salary works out to about $13 an hour. That's lower than the current fight for a $15 minimum wage. And with outlets like CBS News reporting that the average student loan debt has more than tripled in the past 20 years, with millennials bearing a large brunt of that, young people need to earn a decent wage more than ever.
The good news is, Playboy also reported that Pew survey data found that millennials with at least a bachelor’s degree will earn almost $20,000 more each year than millennials who only have a high school degree. So a degree that leaves young people with astronomical student loan debt appears to still be worth it in the long run. But that's hard to understand when you're stuck making high student loan payments and, on average, earning so little in the workforce.
There are some pretty specific things millennials aren't doing as a result of high student loan debt and low wages. For example, Pew research data found that, as a result of debt, the homeownership rate for millennials actually dropped 37 percent from 2004 to 2011. Lower incomes and higher debt levels means this demographic is postponing owning a home — 32 percent of millennials were living with their parents in 2014, according to the Pew Research Center.
So if parents want the kids out of the house? Salaries need to increase, and loan payment refinancing and forgiveness need to become more accessible and realistic for millennials.
Check out which state pays millennials the best on average here.