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Millennial households are earning more money than ever before—here's why it may not be enough

Portrait of young family and baby son
Cultura RM Exclusive/Sofie Delauw | Cultura Exclusive | Getty Images

Millennial households — those headed by people age 22 to 37 — are earning more money than ever: a median income of $69,000, according to a Pew Research Center analysis of new census data.

"That is a higher figure than for nearly every other year on record, apart from around 2000, when households headed by people ages 22 to 37 earned about the same amount — $67,600 in inflation-adjusted dollars," reports Pew.

Millennial households "now earn more than young adult households did at nearly any time in the past 50 years," Pew adds, though it may not be for the reason you expect: "The growth in household incomes among young adults has been driven in part by Millennial women, who are working more — and being paid more — than young women were in previous years."

In 2017, 78 percent of women in millennial households worked at least 50 weeks over the course of the year; in 2000, 72 percent did. And "the median earnings of women working full time for a full year (in households headed by people ages 22 to 37) rose from $37,100 in 2000 to $39,000 in 2017," according to Pew.

It's not just this age group that saw their earnings increase: Incomes of households headed by baby boomers — defined as those age 54 to 72 — are also at record levels. For this group, Pew notes, "the typical household income was $77,600 in 2017, outpacing the previous record for households in the 54-to-72 age group ($75,800 in 2007)."

Generation X households, those headed by people age 38 to 53, are earning a median of $85,800, which is about the same amount this age group earned at their peak: $86,200 in 2000.

Overall, the Census Bureau found that the median US household income rose 1.8 percent in 2017 and reached a new high of $61,372.

Why the news may not be as good as it seems

The 2017 gain was actually smaller than it has been in previous years: 5.2 percent in 2015 and 3.2 percent in 2016.

The gain was also "driven by increased employment, rather than increased pay. The average annual earnings of both male and female full-time workers actually declined last year, but that drop was offset in the national data by the increase in the number of people with jobs," The New York Times points out.

And the larger problem is that even this increase in earnings may not be enough. That's because the average paycheck has the same purchasing power it did 40 years ago, according to a different report from Pew. So though American households may be earning more, salaries still aren't going as far as they used to to cover the necessities, let alone the soaring cost of college, housing, health care and child care.

As a result, Americans of all ages are struggling to get by. Many are turning to part-time gigs or side hustles. About four in 10 Americans hold some kind of second job, according to a July Bankrate survey. That rate is higher among millennials: 51 percent.

"Young people entering the workforce today are far less likely to earn more than their parents when compared to children born two generations before them," research from Stanford finds. While Americans born in the 1940s had a 92 percent chance at making more money than their parents, millennials born in the 1980s only have about a 50 percent chance of doing the same.

And the average millennial had about $36,000 in personal debt, excluding home mortgages, last year, according to Northwestern Mutual's 2018 Planning & Progress Study. Just over 60 percent of millennials with debt don't know when, or if, they'll ever be able to pay off what they owe.

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