Millennials: First generation to earn less than their parents
Millennials: Brace yourself for some depressing news.
A new report by the British think tank Resolution Foundation found that millennials in the U.K. are on track to be the first ever generation to record lower lifetime earnings than their parents.
The report, titled “Stagnation Generation,” laid out in stark terms how millennials are falling behind in terms of wealth, earnings and home ownership.
Here are some key points from the report:
– A typical millennial will earn about £8,000 ($10,600) less during their twenties than those in the previous generation — Generation X. That’s partially due to the Great Recession, but also due to other factors including “a lack of productivity boosting training for young people.”
“No one knows what the future will bring, but even [in] optimistic scenarios it looks likely that the millennials will record much lower generational pay progress than their predecessor generations did,” the report said.
– Getting onto the housing ladder is more difficult than ever before. The Baby Boomer generation was 50% more likely to own a home at the age of 30 compared to millennials.
– Older generations had access to much more generous pension programs in the U.K., while new workers have been essentially blocked out.
Report author Laura Gardiner told CNNMoney there is evidence that companies are suppressing the pay of younger workers to fill deficits in their pension schemes that have been closed to new members and therefore almost exclusively only benefit older and retired workers.
– The U.K. government’s plans for tax and welfare policies over the next four years are expected to reduce the income of millennial workers by roughly £1.7 billion ($2.3 billion), but result in a gain of £1.2 billion ($1.6 billion) for the Baby Boomers.
The report is the latest kick in the teeth for a group that experienced the biggest pay downturn during the Great Recession and lost the “Brexit” referendum as they were overruled by older voters. Millennials voted overwhelmingly to remain in the EU.
Resolution Foundation built on earlier research showing that British people aged 65 to 74 currently hold more wealth than the entire population under 45, even though there are more than twice as many people in the younger age group.