Debt-Squeezed Gen X Saves Little

Publication: USA Today

Author: Lynn O'Shaughnessy

05/20/2008 - At age 30, Bryan Short has, by any standard, achieved professional success since graduating from Boston College and law school at the College of William and Mary. Yet despite his job as a Washington mergers-and-acquisitions lawyer, he's nowhere near as financially secure as he expected to be by now.

He and his wife own one car and rent a 500-square-foot studio apartment. More than one-third of his take-home pay is gobbled up by repayment of college and law-school debt. Children are unaffordable right now. And retirement savings? They've barely begun.

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Gen Xers also face this harsh reality: The standard of living that most of them have so far managed to achieve falls short of their own parents' standard at the same age. The median income for men now in their 30s, when adjusted for inflation, is 12% lower than what their dads earned three decades earlier, a report by the Economic Mobility Project, an initiative of The Pew Charitable Trusts, concluded.

The mobility project found that from 1974, when many Gen Xers were children, until 2004, when most were in the workforce, family income rose only 9%. And most of that gain came from 1964 to 1994 — before the Gen Xers even started thinking about résumés.

Why did income decline just as Gen Xers began their careers? A key reason is that pay had risen so steadily while many of them were children — thanks to women entering the workforce in greater numbers — that pressure for wage growth had declined by the time the Gen Xers began working.

"Now that women's workforce participation has stabilized, where will the next bump in family income come from?" asks John Morton, director of the Economic Mobility Project. "With rapidly rising costs at a time of stagnating income, the question is, 'What do you have left?' "

Read the full article Debt-Squeezed Gen X Saves Little on the USA Today Web site.

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