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Incomes of young in 8-year nose dive
By Dennis Cauchon, USA TODAY
The incomes of the young and middle-aged especially men have fallen off a cliff since 2000, leaving many age groups poorer than they were even in the 1970s, a USA TODAY analysis of new Census data found.
People 54 or younger are losing ground financially at an unprecedented rate in this recession, widening a gap between young and old that had been expanding for years.
While the young have lost ground, older people have grown more prosperous over the years and the decades. Older women have done best of all.
The dividing line between those getting richer or poorer: the year 1955. If you were born before that, you're part of a generation enjoying a four-decade run of historic income growth. Every generation after that is now sinking economically.
Household income for people in their peak earning years between ages 45 and 54 plunged $7,700 to $64,349 from 2000 through 2008, after adjusting for inflation. People in their 20s and 30s suffered similar drops. Older people enjoyed all the gains.
The line between the haves and have-nots runs through the middle of the Baby Boom, the population explosion 1946-64.
"The second half of the Baby Boom may be in the worst shape of all," says demographer Cheryl Russell of New Strategist Publications, a research firm. "They're loaded with expenses for housing, cars and kids, but they will never generate the income that their parents enjoyed."
What caused the income gap:
Waiting line for good jobs. Older people are working longer, crowding out young people from the best-paying jobs while boosting the incomes of older workers and seniors.
Global competition. Low-income workers in other nations have pushed down wages in the USA. Newly hired workers generally younger people experience the wage decline first, says economist Dean Baker of the Center for Economic and Policy Research, a liberal-leaning think tank.
Golden age of retirement. Social Security and private pensions have elevated the incomes of retired people to record levels and reduced poverty among the elderly.
One bright sign: Women have boosted income by holding half the USA's jobs, working longer hours and narrowing the gender pay gap from 2000, when women made 25% less than men, to 2008, when they made 23% less. Older, college-educated career women have had the biggest gains.
Terry Neese, founder of a human resources firm in Oklahoma City, says income shifts partly reflect changing gender roles and values.
As women bring in more income, men can work less or stay home with children, she says. Neese says her own daughter, who now runs the family firm, worked less and went to more kids' soccer games. "My daughter says, 'I'm not going to work like you worked,' " says Neese, 60.
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