Attention, young workers: It's not your imagination. Your're underpaid.
Wages for employees in their twenties took a sharp dive during the past decade, according to data compiled by the Economic Policy Institute, a left-leaning think tank, and reported in The Wall Street Journal.
The average income of college-educated men, aged 23 to 29, dropped 11 percent between 2001 and 2011, the WSJ reports. For college-educated women of the same age, the plunge was 7.6 percent. Although men's wages fell by a bigger percentage than women's, the guys still ended up earning more -- men in this age group were earning an average of $21.68 an hour in 2011, compared to women's $18.80.
Young adults may be earning less because the sluggish job market has pushed them into lower paying jobs. Young people are turning most often to waiting tables and tending bar, as they find it increasingly difficult to get office internships and permanent positions, according to a January survey from Millennial Branding.
And even when young workers can land traditionally high paying jobs, they're at the bottom of the totem pole, meaning their salaries are often cut first. Some major Wall Street banks instituted a pay freeze on its youngest workers earlier this year.
But the falling paycheck trend isn't limited to younger workers. Most Americans have experienced very minimal income growth in the last three decades, unless they happen to be among the super-rich.
The median annual wage in America is just $26,364. Experts say that salaries probably won't begin climbing until unemployment goes down, and that in the meantime, modest incomes are likely to keep consumer spending flat, which will make it harder for the economy to gain momentum.
At the same time, the falling wages for young workers have grim implications for the future financial security of this age group. Young people tend to have higher levels of student debt than they did just 15 years ago, and their dwindling paychecks mean those loans won't get paid off any time soon.
Among recent college graduates, the average student loan debt comes to about $25,000, and Americans' total outstanding student loan debt add up to about $870 billion -- more than what Americans owe on credit cards or auto loans, according to the Federal Reserve Bank of New York.
Research also suggests that when young workers' wages drop during a recession, they can stay relatively low for decades. All other things being equal, employees who enter the workforce during tough financial times tend to earn less than people who started their careers during boom years -- a gap that persists even much later in life.
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