Middle-class millennials in developed nations decrease in number as their pay growth stagnates and prices of housing surge, an Organization for Economic Cooperation and Development report said.
The organization of advanced economies revealed that across 40 major countries, which include the U.S., the middle-income group of every generation since the baby boomers dwindled and its economic impact declined. The report covered OECD’s 36 member nations as well as Brazil, Russia, China, and South Africa.
The younger generations are struggling to obtain a financial footing in these rich countries, including the U.S. In the report, only 6 of 10 millennials have enough earnings to be considered middle class. In comparison, 7 of 10 baby boomers had this earning capacity at the same age, the Paris-based organization report found.
These figures show that younger generations get denied the same opportunities as their parents.
In the OECD’s standards, the middle class is a group of people who earn between 75% to 200% of the average national income (around $23,416 to $62,442 in the U.S.)
Across all demographics, the share of middle-class people is shrinking across the group’s member nations, falling from 64% of households in the mid-1980s to 61% in the mid-2010s, the OECD said.
The group said the income of the middle-class has not kept up with the increase the wealthier people enjoys. Since the 2009 recession, the annual growth rate of real median incomes across the OECD member countries was only 0.3%, compared with 1.6% between the mid-1990s and mid-2000s.
For Stefano Scarpetta, OECD’s director for employment, labor, and social affairs the group’s findings is a “wake-up call” about the current situation of the middle class in advanced economies. In the past, reaching the middle class gives people a sense of financial stability. But nowadays reaching this status is no longer an assurance of having stable earnings.