Photo by Amanda Goldstein

Report finds first 10 years of working determines lifetime earnings

4 mins read

Growth in lifetime earnings are determined in the first ten years of a worker’s life, said a new report from the Federal Reserve Bank of New York released in early February.

The report focused on the growth in average income earned over a lifetime for workers in the U.S. with a median worker earning a growth of 38 percent in their lifetime.

The authors of the report noted there is no other age starting point where there is such a large growth in earnings. In fact, “average earnings growth from ages 35 to 55 is zero.”

Rebecca Chan, a junior, did not believe the study as she felt there was more involved in determine lifetime earnings.

“I would say [the first 10 years] do not determine it, it’s mostly about the experience because when you’re starting out you pretty much do any job you can get for experience,” Chan said.

In fact, Chan said there are individuals who immediately obtain a significant amount of money despite not going to college or dropping out.

“There’s those people who either by luck or good fortune earn a lot of money early in their lives or what they think is sufficient and don’t start or complete college because they think they can just work and make the money without education or with minimal education,” Chan said. “So either it works out for them in the future or they end up with the worst salaries.”

The report highlighted a difference of growth based on income individuals earn. For the top five percent, they experience a growth rate of 230 percent, while the top one percent experience a growth rate of 1450 percent. Overall, in contrast to the rest of the population, the top 10 percent do not experience a drop in lifetime income.

“With the exception of those in the top 10 percent of the lifetime earnings distribution, all groups experience negative growth from ages 45 to 55. So, the peak year of earnings is strongly related to the lifetime earnings percentile,” the authors wrote.

Franklin Rodriguez, a senior, believed the report did not provide any good news for Millennials.

“It makes me really scared for my generation. I don’t know if the study accounts for job outsourcing that we have experienced. If it does account for that, then I am scared,” Rodriguez said.

Millennials, or Generation Y, are individuals born after 1980. The previous generation was Generation X, who were individuals born 1965 to 1980.

It may be difficult for Millennials to obtain a job with high earnings as the U.S. Census Bureau released a report in late December highlighting one in five Millennials living in poverty. In Queens County, at least 15 percent of Millennials live in poverty.

Moreover, the report found 65 percent of Millennials are employed, which is down from 69 percent in 1980. In addition, the median earnings of Millennials working a full-time job, in 2013 inflation-adjusted dollars, was $33,883, which is down from $37,355 in 2000. In Queens County, Millennials earned $38,791, which is down from $44,572 in 1990.

Rodriguez felt, overall, Millennials are facing major obstacles that may grow worse in the future.

“I feel that my generation is getting the short end of the stick. We were raised in a recession that is compared to the Great Depression,” Rodriguez said. “The price of undergraduate college is too expensive and, if we wish to continue on, it is even more expensive. I feel many in my generation have suffered and I do not know if it will get any easy for us anytime soon, if at all.”

Brandon Jordan

Brandon is a senior majoring in Political Science and Economics with a minor in Business And Liberal Arts. He covers labor and activism at CUNY. He also likes to cook, bake, run and make puns, sometimes not in that order. You can follow him on Twitter @BrandonJ_R and email him at brandon[at]

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