Millennials earn a fifth less than their baby boomer parents did at their age despite being better educated, according to new analysis.

The advocacy group Young Invincibles concluded that while the younger age group's $40,581 (£33,309) median household income is 20 per cent lower than their parents' was at the same stage of life, millennials' net worth is half that of the boomers.

Its analysis is based on US Federal Reserve data from 1989 and 2013, and shows the younger generation's student debt is higher and rate of home ownership lower.

Tom Allison, the group's deputy research director, said: "These findings uncover that millennials have been set back significantly, by not just the Great Recession but by decades-long financial trends, resulting in major generational declines in financial security between millennials and baby boomers when they were the same age.

“Millennials make up the greatest share of the workforce and the largest generation in history, so in many ways the situation facing young adults today forecasts the financial challenges ahead for the nation.”

A young adult without a college degree could expect the same income in 1989 as a graduate today who is burdened with student debt, Young Invincibles' report said.

And it added: "Significant financial gaps persist between young African Americans and Latinos and their white peers. For instance, young African Americans and Latinos earn 57 cents and 64 cents, respectively, for every dollar earned by young whites."

Young Latinos were "on a more secure financial foothold than they were 25 years ago" but their black compatriots have "lost ground", with their median net worth declining by a third since 1989.

The report continues: "Incomes earned early in one’s career often set the stage for lifetime earnings, with the highest growth occurring in the first decade of work.