NEW YORK (Reuters) - Young people who joined the New York City workforce during and after the 2007-2009 recession earn less than earlier generations, a disadvantage that could last their entire working lives, a report by city officials said.
Academic research shows those joining the workforce during a recession can wind up in a lower paid and less prestigious job for years, and could even be less happy and less healthy than those who joined during a strong economy.
The report from the city Comptroller’s office goes further, suggesting that a national focus on public sector “deficit containment” and “fiscal restraint” since 2010 was “imposed at great cost to the generation entering adulthood in the early years of the 21st Century.”
Constraints on these workers may not fade as future generations enter the workforce, with many potentially facing a “wrenching readjustment” to a new normal in which career opportunities are more restricted, the report said.
As a counterbalance, the report suggests policies that disproportionately benefit young people such as raising minimum wages, keeping public universities affordable, cutting student debt, and creating more affordable housing.
The report on New York’s “millennial” workers comes at a time of heated debate over income inequality and the ability of the U.S. economy to provide for young workers.
“Every generation is expected to do better than the last, but too many millennials are not getting a fair chance to make it in New York City,” Comptroller Scott Stringer said in a statement on the generation defined by the report as those born between 1985 and 1996.
Millennial joined the city workforce when high-paying jobs in finance and law were drying up and lower paying jobs in hospitality and retail proliferated. As a result the cohort earns 20 percent less than earlier generations.
Average real incomes of employed 29-year olds in the city decreased from about $56,000 in 2000 to $50,300 in 2014, in what the report called a “fundamental deterioration of the earnings opportunities available to young workers.”
The new reality is an ill fit for millennials who are the most educated in the city’s history and struggling with large student debt burdens.
Student debt held by millennials in New York City has reached about $14 billion, the report found, with graduates in New York State holding an average of $27,822 in 2014.
Reporting by Edward Krudy; editing by Andrew Hay