Report: Younger Generation at Risk of Being Poorer Than Parents

Mark Stevenson
by Mark Stevenson
report younger generation at risk of being poorer than parents

Automakers are turning up the wick on drive-sharing investments and slowly transitioning from car manufacturing to providing mobility. That’s likely a good bet, too, considering a recent report from McKinsey Global Institute.

The report, titled “ Poorer than their parents? A new perspective on income inequality,” is a stark reminder that the economic situation isn’t as good as it was 10 years ago, let alone compared to the highs of the postwar West.

For starters, 65 or 70 percent of households in the advanced nations studied were “in income segments whose incomes in 2014 were flat or down compared with 2005,” states the report. The United States is one of the countries pulling up that average with 80-percent of households in income segments either flat or falling.

The 2008 recession is the epicenter for much of the economic turmoil over the last 10 years as “income from wages fell for all population segments between 2002 and 2012, regardless of age or level of education.”

But it’s the disproportionate nature of that downturn that worries researchers.

“The recession and weak recovery in some of the countries have led to persistently high levels of youth unemployment, preventing young people across advanced economies from launching careers. These are the people who are literally at risk of growing up poorer than their parents,” the report states.

Car ownership is expensive and operating a vehicle on public roads is a privilege. For young people, car ownership may also be a privilege they simply can’t afford.

The full report is available from McKinsey Global Institute.

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  • Jeff S Jeff S on Jul 15, 2016

    That is part of the problem, many of today's generation are not willing to stick it out on a job that they feel is boring and below their dignity. Also that many are not willing to relocate to where the jobs are. There are those I know that live in the Cincinnati and N KY area who do not want to leave the area. Doesn't do you any good if you have a degree in Engineering, Accounting, Finance, or Math if you are not willing to go to where the jobs are. Mike Rowe who use to have the Dirty Jobs series on cable and then did the Ford commercials has a music degree and is a trained singer. Mike changed his career path and used his talents in TV. Mike Rowe now travels around the US speaking to students telling them they do not have to go to college to get a good paying job, that they can learn a trade such a plumbing, auto repair, electrician, and heating and cooling repair. It is a disservice to young people to allow them to live at home indefinitely without a job. How will these children take care of themselves if something happens to their parents and it is much harder to get a job if you have not employed for a long time.

  • Thelaine Thelaine on Jul 16, 2016

    America did not become an economic juggernaut because of the effects of WW2, and it's economic decline was not inevitable. The post war recovery of other nations helped the is economy. Unfortunately, US government policies have created stagnation, just as many predicted. Massive government, massive regulation, massive debt and other policies have retarded private sector growth. Young people, unfortunately, consistently vote for the politicians who promote these very policies and ridicule those who earn of the consequences. Don't bitch, young people, you are getting what you asked for.

  • Dwford Dwford on Jul 16, 2016

    We like to blame the government, the bad economy, the evil corporations for the decline in living standards for our young people. All true to different degrees. But a big problem I see in most millennials I know is simply poor money management. Making a large income from a job is not what makes you financially secure (working in car sales I saw plenty of people with 6 figure incomes that had crappy credit and maxed out credit cards), spending less than you earn and investing gets you there. Kids today seem perfectly happy to spend on fun and wonder how to pay the bills later. Part of that is many having indulgent parents that let them live at home for free. Part of it is just being young and narcissistic. We need to teach proper money management in schools.

  • Matt3319 Matt3319 on Aug 16, 2017

    No they wont. Once their parents pass away they will just resume living at home and live off their inheritance.