Millennials Will Be The First Generation Not To Make More Money Than Our Parents, So Is The American Dream Basically Dead?
We learn a lot about the "American Dream" growing up — but it seems that for many young people, it seems that the American Dream is basically dead. According to a new study led by Rej Chetty, a Stanford professor of economics, millennials will be the first generation to make less money than their parents did. You know, how we all talk about wanting our children to do better than us, be more successful, buy a nicer home, and so on and so forth? Many millennials won't be able to do that, and it doesn't really have much to do with how hard we do or don't work.
Of course, we all define success differently, so no one has to conform to the same ideals given to us in the American Dream in order to consider themselves successful. But the idea is pretty firmly ingrained in our culture, so even if you don't buy into it 100 percent (or at all), you may feel pressure to make a particular income, live in a certain area, or achieve a certain "status" in order to be considered "successful." And sadly, the latest data suggests that for our generation, this sort of mobility might not be in the cards.
In their study, Chetty et al found some concerning results. For example, roughly half of people born in the 1980s will grow up to earn less money than their parents did, after you adjust for inflation. As Jim Tankersley at the Washington Post points out, that's a drop of 92 percent compared to children born in '42.
Depending on your socioeconomic class and your parents income, of course, these estimates vary. But across the board, millennials are predicted to earn less than our parents. For example, for people born in the bottom 10 percent of income, their mobility has still declined, albeit less than for those from higher socioeconomic backgrounds. Admittedly, as Tankersley explains, this happens largely because when parents make so little, it is "easier" to make more money than they did. But for children born to parents in the top 10 percent, there is still a mobility gap in that it's difficult for children to out-earn their parents considerably massive incomes. For people who are born to two middle-class parents, mobility is expected to decline more than it has in past decades. The data also suggests that people who live in the Rust Belt states like Indiana and Michigan are being hit particularly hard.
Of course, it's good to point out that estimating the odds that something will or will not happen is tricky; after all, no one can predict the future. So, to conduct this study, Chetty et al got creative: They used anonymized data from tax records statistics on the distribution of income from the U.S. Census. This data allowed researchers to estimate the chance that a child in the United States from a particular background would earn more than their parents in the future.
What does this mean for the Millennial generation? Well, it's important to remember that our values are always changing. Even if you can't buy a home by a certain age, for example, it doesn't mean you're a failure. While it's good to aim for stability and financial security, it's important not to put too much pressure on ourselves to achieve certain ideals just because it's the way they've "always" been done.
Change is good. Change is necessary. And we are all worth more than our paychecks.
Images: Bustle; Giphy (2)