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Table 1. Characteristics of Young Adults Ages 18-34, 1980 vs. 2009-2013

Demographic Characteristics 1980 2009-2013 Percent of total population 29.6% 23.3% Foreign Born 6.3% 15.4% Speak language other than English at home 10.9% 24.6% Bachelor’s degree or more 15.7% 22.3% Minority 21.6% 42.8% Never Married 41.5% 65.9% Live with a Parent 22.9% 30.3% Live Alone 7.5% 7.1% Military Veteran 9.4% 2.4% Employed 69.3% 65.0% Income Below Poverty Line 14.1% 19.7% Median Income (2013 dollars) $35,845 $33,883

Table 2. Top 20 US Metro Areas (pop. > 400,000) Ranked by Highest Median Income (2013 dollars) for Young Adults Ages 18-34, 1980 vs. 2009-2013

Rank Metro Area Median income, full time workers, 1980 Metro Area Median income, full time workers, 2009-2013 1 Flint, MI $50,208 San Jose, CA $51,149 2 Detroit, MI $47,460 San Francisco, CA $47,426 3 Chicago, IL $43,480 Washington, DC $47,380 4 San Jose, CA $43,229 Boston, MA $44,548 5 Houston, TX $43,028 Bridgeport-Stamford-Norwlk CT $42,757 6 San Francisco, CA $42,047 Hartford, CT $42,322 7 Milwaukee, WI $41,987 New York-Newark, NY-NJ $42,108 8 Seattle, WA $41,712 Baltimore, MD $41,807 9 Portland, OR $40,941 Seattle, WA $41,167 10 Rochester, NY $40,869 Minneapolis-St. Paul MN $39,963 11 Washington, DC $40,746 New Haven, CT $39,794 12 Youngstown, OH $40,738 Philadelphia, PA $39,413 13 Cleveland, OH $40,732 Worcester, MA $39,115 14 Minneapolis-St. Paul, MN $40,528 Chicago, IL $38,415 15 Pittsburgh, PA $40,253 Denver, CO $37,958 16 Bridgeport-Stamford-Norwalk CT $39,900 Des Moines, IA $37,456 17 Toledo, OH $39,766 Sacramento, CA $37,397 18 Denver, CO $39,664 Albany-Schenectady-Troy NY $37,249 19 Grand Rapids, MI $39,413 Raleigh, NC $36,811 20 Cincinnati, OH $38,997 Springfield, MA $36,464

Derek Thompson provided some fascinating income data for young Americans by metro areas in his recent article in The Atlantic titled “The Richest Cities for Young People: 1980 vs. Today.” The income data are from a new Census Bureau study released in December that show how “young adults today compare with previous generations in neighborhoods nationwide.” The study “Young Adults: Then and Now” is based on 1980, 1990 and 2000 Censuses and the 2009-2013 American Community Survey, and includes an interactive data tool with estimates of 40 demographic variables at the national, state, metropolitan, county and neighborhood levels.

A comparison of some demographic characteristics of today’s millennial generation to young Americans ages 18-34 in 1980 is displayed above in Table 1. Specifically, the Census Bureau study finds that compared to 1980: a) young adults today represent a smaller share of the total population (23.3% today vs. 29.6%), b) the share of young adults who are foreign born has more than doubled (15% vs. 6%), as has the share who speak a language other than English at home (24.6% vs. less than 11%), c) young adults today are more likely to have a bachelor’s degree or higher (22.3% vs. 15.7%), twice as likely to be a minority (42.8% vs. 21.6%), more likely to have never married (66% vs. 41.5%), more likely to live with a parent (30.3% vs. 23%), and more likely to have income below the poverty line (19.7% vs. 14.1%), d) young adults today are less likely to live alone (7.1% vs. 7.5%), less likely to be a military veteran (2.4% vs. 9.4%), and less likely to be employed (65% vs. 69.3%). Young adults today have a lower median income of $33,883 compared to the median income of $35,845 for that group in 1980 (in constant 2013 dollars).

The bottom chart above (Table 2) displays an interesting comparison of the top 20 metro areas (wotj populations above 400,000) ranked by median annual earnings (in 2013 dollars) for full-time workers ages 18-34 in 1980 and 2009-2013. Some observations:

1. In 1980, three Michigan cities (Flint, Detroit and Grand Rapids) ranked among the top 20 US metro areas for the highest median incomes for young adults, and Flint and Detroit were ranked No. 1 and No. 2. In 1980, young people working full-time in Flint and Detroit, thanks to an 80% market share for the Big 3 and the above-market wages of the UAW, had higher median annual incomes than their counterparts in all other major US cities including Chicago, San Francisco, Washington DC, Los Angeles (No. 36) , Boston (No. 35), Dallas (No. 45), and New York City (No. 23). When cities smaller than 400,000 in population are considered, many more Michigan cities made it into the top, highest-income cities for young Americans in 1980: Midland ($49,000), Saginaw ($47,000), Monroe ($46,500), Ann Arbor ($44,500) and Bay City ($44,000), all with median incomes for young Americans higher than No. 3 ranked Chicago ($43,480) for large cities.

2. Interestingly, the high income levels for young Americans in most Michigan cities in 1980 didn’t reflect a wage premium for education, since the shares of the young adult population ages 18 to 34 with college degrees in most Michigan cities were significantly below the 16% national average, e.g. 9.7% in Flint, 10.2% in Saginaw, 13.4% in Detroit, 8.6% in Bay City, and 8.1% in Monroe. Given its relatively low cost of living compared to other areas of the country, along with income levels that were about one-third above the national median of $35,845 in 1980, Michigan was probably one of the best states in the country for young people back then. You didn’t even need a college degree in those days, you could graduate from high school in the Flint-Detroit-Saginaw areas and go to work in the auto industry, and earn almost $15,000 above the median annual income for young adults back then. Not a bad deal, except that it was unsustainable because the UAW wages had gotten negotiated over the years levels far above realistic, market levels. Once the Big Three and the UAW faced competition from foreign automakers like Toyota and Honda, the market share of GM, Ford and Chrysler fell by almost half to below 44% in 2009 before recovering slightly in more recent years.

3. From its No. 1 rank in 1980, Flint’s median income for young adults fell to the rank of No. 428 in 2009-2013, out of 929 US metro areas of all sizes, with median annual income of $30,732 – a drop of almost 39% in real dollars in just a generation. Likewise, for large metro areas, Detroit slipped to No. 40 in 2009-2013 with median income of only $34,756, a decrease of almost 27% from its 1980 median income of $47,460.

4. Not surprisingly, more than half (11) of the top 20 metro areas with the highest median incomes for Americans ages 18-34 in 1980 were in Midwest or Rust Belt states (Flint, Detroit, Chicago, Milwaukee, Youngstown, Cleveland, Minneapolis-St. Paul, Pittsburgh, Toledo, Grand Rapids and Cincinnati). By 2009-2013, only three of the top 20 metro areas by income for young Americans were in Midwest or Rust Belt states: Minneapolis-St. Paul, Chicago and Des Moines (and none of those cities have a strong manufacturing base), and almost all of the top 20 metros by income for young Americans were in East Coast or West Coast states (San Jose, San Francisco, Washington, DC, Boston, New York, Philadelphia, Baltimore, Seattle, etc.).

5. In 1980, 1990 and 2000, Williston, North Dakota wasn’t even included in the Census Bureau list of US metro areas. But by 2009-2013 Williston ranked as the sixth highest-income city in the US (for cities of all sizes) for young adults with median income of $46,081, just slightly behind Washington, DC at $47,380, San Francisco ($47,426) and San Jose ($51,149). The median income for the millennial generation working in Williston is higher than the median incomes in Boston ($44,548), New York City ($42,108)and Seattle ($41,167). It’s another amazing sign of shale prosperity that young Americans today are earning incomes in Williston, North Dakota, in the epicenter of the Bakken Oil fields, that are comparable to the median incomes of their counterparts in Washington, DC and San Francisco.

Bottom Line: The new Census data provide a striking look at how today’s young adults are different on many important demographic characteristics compared to their counterparts in 1980. We can also see from the Census study how the geographic center of gravity in the US for the highest-paying jobs for young Americans has dramatically shifted over the last several generations, from cities in the Midwest and Rust Belt states to the West Coast (Silicon Valley and Seattle) and East Coast (Boston, Washington, New York, Baltimore). That shift reflects the never-ending gales of Schumpeterian creative destruction that characterize a market economy and result in some industries and geographical regions emerging as economic centers of entrepreneurship, innovation, growth, investment, employment opportunities for young people, and rising income levels, only to eventually have those forces of economic change shift and move away to other industries and other geographical regions, leaving reduced opportunities and lower levels of incomes in the once-prosperous cities.

While Flint and Detroit and other cities in Michigan once provided incomes for young working adults that were the highest in the country in 1980, those high-paying jobs have gradually faded and income levels are now below-average for most young people in Michigan. For the millennial generation, the high income jobs have shifted away from Michigan to the coasts and cities like San Jose, San Francisco, Boston and New York; and to unlikely places like Williston, North Dakota in the heart of the shale-rich Bakken Oil fields. What geographical areas and industries will provide the highest-income opportunities for the future generations of young Americans, and how will those young Americans be different from today’s millennial generation? It’s hard to tell, but it’s likely we’ll see a demographic and economic/geographic shift over the next 30 years that will be as dramatic as the shift and changes that took place between 1980 and 2010.