This analysis looks at employment by industry and related wage trends among 19- to 34-year-olds today, known collectively as “millennials.” Despite higher levels of educational attainment and a U.S. economy 70% more productive than it was in the mid-1980s, the group is finding it difficult translating high education levels into higher earnings[i]. The dire situation of earnings and employment for millennials is compounded by this generation’s sky-rocketing student debt compared to generations prior.
The primary reason for this age group’s low earning potential at the moment seems mainly a matter of the type of industries in which they are being employed. In many metros across the country, this age group, particularly following the recession, has seen their employment in lower wage industries like food service and retail rise at the same time as their numbers in higher wage industries like finance and information fall. With a recent report in New York City[i] highlighting this trend at the city scale, we investigate how Atlanta’s millennials are faring, both over time and in comparison to other metro areas in the United States.
We analyzed U.S. Census Longitudinal Employer-Household Dynamic (LEHD) employment and wage data from 2000 to 2015 for 19- to 34-year-olds in the metro areas of Atlanta, Houston, Dallas, and Seattle. By comparing the share of 19- to 34-year-olds in each industry to the share of the age group in each of the metro economies as a whole, an annual cohort quotient (CQ) for each major industry sector over the 15-year time span was calculated. The CQ each year is essentially a measure of how concentrated 19- to 34-year-olds are in that industry. A value less than 1 means the age group is underrepresented, whereas a value greater than 1 means the age group is overrepresented (or concentrated) in that industry in a given year. Figure 1 shows the shifting concentration of 19- to 34-year-old-Atlantans between the various major industry sectors. There is increasing concentration of the age group beginning in 2008 in “Accommodation and Food Services” and “Retail Trade” industries, with proportional employment decreases in the higher wage “Finance and Insurance” and “Professional, Scientific, and Technical Services” industries.
Figure 1. Atlanta metro cohort quotient chart (2000-2015) for workers, 19 to 34 years old, by major industry sector (click to enlarge)
The CQ data in Figure 2 are sorted from highest to lowest CQ 2000-2015. The 19-34 age group in 2000 was dispersed more broadly across a variety of industries, but by 2015 it had concentrated into fewer, mostly lower wage, industries.
Figure 2. Atlanta cohort quotient (CQ) table (2000-2015) for workers, 19 to 34 years old, by major industry sector (Green denotes a CQ>1; Red denotes a CQ<1). Data source: US Census LEHD (click to enlarge)
Not only has the age group concentrated into lower wage industries over the last 15 years, the wages in these industries has shown an overall decline over the same time period (fig.3).
Figure 3. Atlanta Metro average monthly wages (2000-2015), in 2015 US Dollars, for workers, 19 to 34 years old, by major industry sector (click to enlarge)
Similar trends in millennial employment and wages, to a lesser degree, were uncovered for Houston, Dallas, and Seattle. In fact, whereas all three of the other metros analyzed have at least two higher wage industries categories in which millennials were finding expected (CQ=1) or higher than expected (CQ>1) employment in 2015, Atlanta had no such industry (fig. 4).
Figure 4. The cohort quotient (CQ) is the share of workers aged 19 to 34 in each industry divided by the share of workers aged 19 to 34 in all industries. A CQ greater than 1 (indicated in green) means the proportion of workers aged 19 to 34 in that industry is larger than the proportion of that aged group to all workers in the metro. A CQ less than 1 (indicated in red) means the opposite, that workers aged 19 to 34 are underrepresented in that major industry sector. The wages are a color-coded from highest (green) to lowest (red). Highlighted industries are those with both a CQ>1 and an above average wage (click to enlarge).
Saddled with student debt and entering or experiencing a still recovering labor market, the millennial generation in Atlanta and elsewhere faces a number of obstacles going forward if the group is to see the economic payoff that previous generations have.