Young workers’ income lower than in 1975

The United States has enjoyed extraordinary economic progress over the past four decades, but average incomes for today’s young workers are lower than they were in 1975.

Over the past four decades, young American workers saw their average incomes decline by 5.5 percent after adjusting for inflation, according to new figures published Wednesday by the U.S. Census Bureau. In 1975, workers aged 25 to 34 had a median personal income of $37,000 in modern dollar terms. In 2016, that number was down to $35,000.

Earnings have declined despite the fact that today’s young people are better educated than 40 years ago. Thirty-seven percent of young people had a bachelor’s degree last year, compared to 22.8 percent in 1975.

Experts say a more unequal economy presents fewer opportunities for younger workers. Young people today must compete with a well-educated labor force, while young people in the past often had an advantage over older workers who were less qualified.

In another sense, the decline represents progress, because it is partly a result of striking gains among young women. Young women have joined the workforce in high numbers, but because they still earn less than young men, their entrance has driven down the average for young workers in general. In 1975, just under half of women aged 25 to 34 were working, and only 18.4 percent had at least a bachelor’s degree. In 2016, about 70 percent of women between those ages were employed, and 40 percent had at least a bachelor’s degree.

The typical income for a young woman in the labor force increased 28.5 percent since 1975, from $23,000 to $29,000 in 2015 dollars.

Meanwhile, young men’s earnings have declined. For a man in the labor force aged 25 to 34, the typical income declined from $46,000 in 1975 to $40,000 last year.

Young men are also more educated — 34 percent now have a bachelor’s degree, compared to 27.4 percent of their counterparts 40 years ago. Last year, roughly 5 in 6 were working and two-thirds had full-time, year-round jobs, figures that have changed little since 1975.

Typical weekly earnings for workers aged 25 to 34 in this category have declined 4 percent between 1979 and last year after adjusting for inflation, according to Arloc Sherman, a researcher at the liberal Center on Budget and Policy Priorities.