Younger Generations Lag Parents in Wealth-Building
Finally, and perhaps most important, younger workers have faced a brutal job market in the last half-decade. The unemployment rate is 7.8 percent for workers between the ages of 25 and 34; it hovered over 10 percent for more than a year during the recession and early stages of the recovery. For workers between the ages of 45 and 54, the unemployment rate is 5.5 percent, and it peaked at 8 percent in 2010.
Those who held on to their jobs are often worse off. Wages, adjusted for inflation, have stagnated for a broad swath of workers for over a decade. For millions of workers, wages have actually declined through the recession and the sluggish recovery.
With the wage and jobs picture bleak, and fixed pensions largely gone from the private sector, the answer to the conundrum of shoring up savings for younger workers might lie in new government policies, the Urban Institute scholars said. They suggested encouraging retirement accounts by making them automatic unless an employee opted out, or modifying the home mortgage interest deduction to push more money toward homeownership for lower-income workers.
For now, millions of younger workers are on their own.
"We both had vanilla lower-middle-to-middle-class lifestyles," said Christopher Greer, a 32-year-old who works in astronomy and lives in Arizona, referring to himself and his girlfriend. "I'm not sure how that's going to play out for us."