May 12, 2023
Since the 1980s, the economy has changed in ways that are simply difficult to describe. The real impact of inflation and wage stagnation isn’t apparent unless you dig deeper into the numbers. That’s precisely what a recent college grad did when her mother commented on the idea that young workers “expect too much.”
“I think boomers can’t conceptualize this [struggle] because they never had to fight for jobs,” said Cat, a 21-year-old college student. She recently took to TikTok to explain why older workers might find it difficult to empathize with the economic struggles of younger people after a discussion with her mother about mismatched expectations. The video has been viewed 2.2 million times as of May 12.
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Cat says her mother made $36,000 a year as an entry-level bank teller in 1980. Meanwhile, the average entry-level worker in America now makes $55,260 a year, according to her calculations. However, when adjusted for inflation the entry-level salary in 1982 — about $33,700 — was closer to $102,200 in today’s dollars.
Effectively, a recent college grad is making half as much as his or her parents did if they graduated 40 years ago. This is also true for low-income workers. The federal minimum hourly wage in the U.S. was $3.10 in 1980 and just $7.25 today. These workers may have doubled their income over 40 years, but it’s apparent the cost of living has accelerated more quickly.
A dollar in 1980 had the same purchasing power as $3.68 today. To preserve purchasing power — at least by 1980 standards — the minimum wage should have soared to $11.40 by now.
Labor has effectively been devalued, which is at the root of many younger workers’ frustrations. And TikTok comment sections are one of their favorite places to express these feelings.
Comments agree
“Boomers had the door wide open and then slammed and barred it behind them,” said one angry commenter to Cat’s video.
“Everything goes up but our salaries,” said another.
Across 7,000-plus comments on the video, most appear to be in complete agreement with Cat’s sentiments. Some claiming to be recent graduates say they’re making less than the national average or have been searching for years for a good job.
“The job market hates entry-level workers,” said one commenter who says they’ve been unable to get a job in their industry after graduating two years ago.
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Some good news
It’s not all doom and gloom for American workers. The median weekly wages for full-time workers outpaced inflation for the first three months of 2023, according to the Bureau of Labor Statistics.
In addition, the country’s lowest wage earners are seeing faster growth than the top earners. From January 2020 to September 2022, the bottom 10% of American workers have seen their real (inflation-adjusted) wages rise 6.4%, according to the National Bureau of Economic Research.
Add in a low unemployment rate and it seems younger, poorer workers may be enjoying a rare period of outperformance over older, wealthier ones.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
