
Young Households Are Losing Ground in Income, Despite Education - kaa2102
http://www.nytimes.com/2014/09/13/business/economy/young-households-are-losing-ground-in-income-despite-education.html
======
nthj
This is because our society has conflated education with acquiring skills
which can be used to create value. What do we tell our young people? “Get good
grades, so you can go to college, get a degree, and get a good job.”

Now, don't get me wrong: being well educated has many benefits to both society
as a whole and to any given individual. A great education is a wonderful thing
to acquire and very valuable.

But when we tell our young people, “just get the best grades you can and stick
it out until you have a piece of paper”—we shouldn't be surprised when they
don't have skills they can trade in the free market for the income they want.
(You can argue whether this /should/ be the case, but I'm not arguing what
should be, only what reality currently is.)

I was fortunate enough to realize this several years ago, in large part thanks
to Hacker News, PG's writings on creating wealth, and Jason Fried's Inc
Magazine article on making money [1]. But I only found these resources
indirectly because I happened to be excited by programming while in high
school—not because my school counselors, parents, or society as a whole was
pushing me in this direction.

Living life well requires balancing many things: work, family, learning,
hobbies, helping others. I don't have an easy answer to that. But I do think
we need to stop glossing over the whole making-money-is-a-skill thing. It's
not doing our young people any good. They need to spend their early years both
acquiring a great education, and learning marketable skills. And we need to
ask them those hard questions before they turn 25, graduate, and suddenly
wonder how they're going make it in the real world. Otherwise, the trend
outlined in the article will only continue.

[1] [http://www.inc.com/magazine/20110301/making-money-small-
busi...](http://www.inc.com/magazine/20110301/making-money-small-business-
advice-from-jason-fried.html)

~~~
vladtalto
So you what your indirectly saying is that instead of telling everyone to go
to school and get good grades they should all aspire to be programmers?

~~~
rm445
There are other professions that make money. But it's possible to get educated
in all kinds of fields where either there isn't much demand for work, or the
work intrinsically breeds a few stars and others in the field get nothing.

Not that there's necessarily anything wrong with pursuing those fields anyway;
the question is, are the people going into them properly informed?

~~~
gaius
14% of CS grads in the UK are unemployed.

Tony Blair told a generation, don't learn a trade, get a degree. Now we have
graduates making coffee, and we import all our skilled labour from Eastern
Europe, because no Brits know how to be plumbers, electricians and carpenters
anymore.

------
jing
Some claim that this is part of a broader trend of "generational theft" from
the young to the old and have some interesting slides to demonstrate their
thesis:

[http://online.wsj.com/news/articles/SB1000142412788732348570...](http://online.wsj.com/news/articles/SB10001424127887323485704578257753243530078)

[http://vimeo.com/65731171#t=11m55s](http://vimeo.com/65731171#t=11m55s)

------
spindritf
_Single-person households are included in the family calculations._

So is the difference between older and younger families or between two-person
and one-person households? Depending on the definition of household
(flatmates?), I'd guess there are more young one-person households nowadays
than 30 years ago.

You can't even correct for it. Because people who would get married early
today are also different than people who would 30 years ago. For example, more
religious.

 _Among families of all ages, those with more education tend to earn more than
those with less. But that differential appears to be shrinking._

As more and more marginal college students are accepted?

I am very sceptical about stats like that. College graduates from 30 years ago
are not the same in many other regards as today. Households headed by a young
person today are not the same as those 30 years ago. This goes double for the
US who accepted tens of millions of immigrants in the meantime.

[http://cafehayek.com/2013/11/when-facts-arent-
facts.html](http://cafehayek.com/2013/11/when-facts-arent-facts.html)

~~~
jiggy2011
Also, people are staying in education for longer and deferring earnings. A 23
year old working at Walmart will probably out earn a 23 year old studying for
their masters while they are both 23 but probably not when they are both 30.

~~~
bdcravens
Some of those 23 year olds will be making more as a 30 year old manager at
WalMart than some 30 year olds with a masters degree.

~~~
jiggy2011
Some of them, but retail management salaries aren't very high unless you are
running the entire store. In many cases supervisors aren't paid much more than
the staff they manage and they still want graduates for higher management
positions.

~~~
MisterBastahrd
It is very easy to become a store manager (refrain from screwing up and take
transfers when available for promotions), and those jobs pay exceptionally
well. A Walmart or Winn-Dixie store manager is going to be making six figures,
and at least in the case of Winn-Dixie, they actively avoid people with
advanced degrees because district managers are afraid of getting passed over.

------
quaffapint
I'm in the 35-44 group and I just continue downward. Salaries post 2k7 haven't
recovered, and health care costs in the past couple years have sky rocketed
with the new plans. So, with cost of living and property taxes increasing, my
pay stagnating to falling when you include health care premiums, I can't even
live paycheck to paycheck half the time. The sad thing is I make more in my
current developer job of 15 years than if I left to go somewhere else to 2k7
pay levels, so that's not an option.

It's not just a young person thing. It's the new economy with the gap ever
widening and I don't see it changing. Just get into the right field. Sales
execs making real good money around here (the mid-Atlantic) while IT is not.

~~~
morgante
With due respect, shouldn't a developer with >15 years of experience be making
in the high 6 figures? (>$150k)

Is it really hard to live on that, even with a family?

~~~
quaffapint
Just to add on to what sologoub stated...When I started IT many moons ago, I
had a nice linear progressions of jobs and pay. We moved from an apartment to
small house to slightly bigger rural area house. My job felt steady and I
liked that with a young family. When I was ready to move onto the next
position 2007 happened.

Now any move I make in the field would likely end up being a step down or
lateral move in pay, based on the many recruiters and their position offerings
I speak with. It's just the nature of the current economy. I make good money,
but the cost of living has now outpaced what good money means and my pay has
stagnanted if not gone down with health premium costs.

~~~
morgante
> When I started IT many moons ago

I can't help but think that referring to technology as "IT" might be part of
the problem. Nobody I know who's doing technical product development calls it
IT. In my mind, that term connotes working as a glorified support specialist
in a large corporation.

~~~
collyw
I am similar age rage. That was what it was called back then. What is it now?

~~~
morgante
> I am similar age rage. That was what it was called back then. What is it
> now?

Technology? Development? Engineering? Depends on the company, but generally
tech-driven companies don't have developers working in an "IT" department.

~~~
collyw
Technology? You do know what the 'T' in 'IT' stands for don't you?

~~~
morgante
> Technology? You do know what the 'T' in 'IT' stands for don't you?

Yes...

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alasdair_
I'm confused. From the article:

"The results are released by family, not by individual, so the median family
income may include the income of both spouses. Single-person households are
included in the family calculations."

Doesn't this study simply measure the fact that someone who is fifty years old
is likely to have a spouse, while someone who is twenty is less likely to have
one?

~~~
ori_b
No; They're comparing across different points in time. Unless the portion of
older families that are married has increased, the gap would not change with
time due to that factor.

~~~
morgante
> No; They're comparing across different points in time. Unless the portion of
> older families that are married has increased, the gap would not change with
> time due to that factor.

The proportional difference in marriages definitely has increased. As people
are getting married later, it absolutely makes sense that the average
household income for younger people is falling as more of them are single-
earner "households." [1]

1: [http://www.businessinsider.com/why-people-get-married-
later-...](http://www.businessinsider.com/why-people-get-married-
later-2013-10)

------
adventured
They would have to be losing ground, the math demands it. The job recovery is
almost entirely fake. At the rate we're going, we should hit 4% unemployment
with the lowest participation rate in 45 years.

A quick review of the labor force participation rate, how many full-time jobs
existing today vs. 2007, the number of full-time jobs vs part-time jobs, and
the quality of jobs created, will tell you all you need to know.

Full-time jobs are still at 2006 levels (we've added maybe 17 million total
people in that time), and barely above 1999 levels (ie in 15 years, we've
added almost no net full-time jobs).

[http://i.imgur.com/hHp3WvO.png](http://i.imgur.com/hHp3WvO.png)

~~~
krakensden
The participation rate seems like it could be a little misleading- the baby
boomer pig in the demographic python is squeezing out the other end. People
retiring doesn't seem like the worst of all possible worlds.

~~~
jjoonathan
If they vacate the labor market and start spending their savings, it could be
a very good thing indeed.

------
parennoob
"In the first survey (1989), the younger group included families headed by
people born after 1954, and so was dominated by baby boomers. The latest group
(2013) includes families headed by people born after 1984, and they seem not
to have done nearly as well early in their careers."

1989 - 1954 = 35

2013 - 1984 = 29

I'm not particularly surprised that younger-than-29-year olds, on an average,
don't earn as much, or are as successful as younger-than-35-year-olds.

What am I missing here?

~~~
cperciva
It's very poorly written, that's all. In both surveys, the group in question
is "under age 35".

------
AndrewKemendo
_Single-person households are included in the family calculations._

This skews the numbers considerably.

The overall point is certainly well made, however "family" to me means at
minimum 1 parent and 1 child.

------
refurb
This shouldn't be that surprising. 1989 was the lowest year for unemplyment in
the '80s after several years of high growth.

The US economy is still recovering from the 2007 crash.

~~~
Zigurd
It might be more accurate to say it is _trying_ to recover from the 2007
crash. There is a distinct possibility of another downward leg in the economy.
For example QE was probably unavoidable, but QE2 and QE3 is a symptom of
continuing to spend on war when 2007 should have caused a much more sudden and
dramatic reduction in shoveling money into that fire.

The ECB is pondering _beginning_ a QE-like program. Will QE4 follow QE3? Can
it? The economy is still running on emergency measures. It's difficult to call
that "recovering."

~~~
mcnees287
I think you're reading too much into the conspiracy theories here.

The quantitative easing (QE) programs are designed to decrease long-term
rates, in other words, flatten the yield curve, which have been more-or-less
successful. In the US this program is drawing to a close.

The EU is really a different story and a lot of what is going on there has to
do with the fact that they failed to tackle their banking crisis in 2009-2010.
The US was able to swallow the medicine more quickly.

The EU did put in place other programs, including the long term refinance
operation, which has never has used explicitly.

The economic cycle is just that. Always expect the next downturn. The question
is will there by another financial crisis in the next few years, or will the
crisis come later?

~~~
Zigurd
There are a lot of lo-tinfoil people who are appalled that we are on QE3,
which followed immediately after QE2, which "ended on schedule." The problem
is QE is the last ditch. In monetary policy our backs are against the wall.
And too many people think "OK, we didn't have a total financial meltdown,
things must be pretty OK." They're not "pretty OK" until lowering the CB
interest rates becomes effective again, and the assets<cough>junk</cough> on
the CB balance sheets is getting sold off.

The next thing that snaps is going to be very very ugly.

------
segmondy
when everyone has a bachelor's, what is it worth?

