About half of 30-year-olds won’t make as much money as their parents did at the same age, a new study has found.
That’s a substantial decline from nearly 50 years ago: While in 1970s, 92% of American 30-year-olds earned more than their parents did when they were young, that figure fell to 51% by 2014.
What’s more, even if President-elect Donald Trump fulfills his promises of rapid economic growth, the trend won’t be reversed significantly. Even if income levels grew 3.8%, the percentage of 30-year-olds who out-earn their parents would bump up to just 62%, the Wall Street Journal reports.
In fact, it would take sustained income growth of more than 6% a year, adjusted for inflation, in order to return to a society when the vast majority of children made more money than their parents. That hasn’t happened since World War II.
The percentage of young people making more than their parents dropped sharply in 1992, to 58%. The figure hovered around that point for about 10 years, before nosediving again. The authors didn’t provide a specific answer to why younger Americans aren’t making as much money as their parents, though it did point to a general slowdown in economic growth.
The study was conducted by economists and sociologists at Stanford, Harvard and the University of California. They used tax and census data to compare the earnings of 30-year-olds starting in 1970 to that of their parents.