March 20, 2006
Are the young getting ahead?
Several recently published books discuss how tough young adults have it in today’s economy, given the high costs of college, an unstable job market and large amounts of debt. But N.C. State University economist Mike Walden says that there is another side of the story.
“Let’s look at the data. The authors of these books who say that young households are having it tough do have a point if you look at income gains. ... We are defining young households here as people under the age of 35. They did make income gains in the 1990s, but they have actually seen their income fall back in this decade of the 2000s,” explains Walden, a North Carolina Cooperative Extension specialist. “So that paints a gloomy picture.
“But actually a better picture is painted if you look at net worth, which is simply the difference between the assets of young households and their debt,” he adds. “Federal Reserve data show that actually the net worth of people under the age of 35 dipped in the mid 1990s, but has actually risen since 1998.
“So this is really good news, and what it says is that on the income side young people may be having a tough time, but on the asset side they are actually making gains.
“And indeed with all their additional expenses that we talked about, those gains, I think, are all the more impressive.”
Posted by deeshore at March 20, 2006 08:00 AM