There’s always some level of generational bickering, and lately, it’s been between Baby Boomers and Millennials. Boomers claim Millennials are entitled, which is ironic since Millennials were raised by Boomers. Meanwhile, Millennials argue that Boomer selfishness has contributed to a world where it’s harder for younger generations to thrive.
No matter who’s right, the reality is that Millennials are on far shakier financial ground than their parents. Robert Reich, an admitted Baby Boomer, and former Secretary of Labor in the Clinton Administration, does a great job at explaining the discrepancy in a new video/blogpost entitled “Four Reasons Why Millennials Don’t Have Any Money.”
“Millennials aren’t teenagers anymore,” Reich writes. “They’re working hard, starting families and trying to build wealth. But as a generation, they’re way behind.”
They are only half as likely to own a home and more likely to live in poverty than their parents.
Number one: Stagnant wages.
Between 2007 and 2017, median wages grew by just 0.3%. As many Millennials were starting their careers, they entered an economy where paychecks stayed flat while living costs, especially for education and healthcare, soared. In contrast, wage growth in the mid-’80s to mid-’90s was over three times higher.
Second: As wages have stagnated, the costs of essentials like housing and education have gone through the roof.
The most common way that Americans have built wealth in previous generations was by owning a home. But the exorbitant cost of real estate across the country has priced Millenials out.
The median home price in 1980 was $147,000 in today’s dollars and then $178,000 in 2000. As of May 2019, the U.S. median home price is $315,000
Adjusted for inflation, the average cost of a college education in 2018 is nearly three times that of 1978.
via PixaBay
Third: As a result of all of this, debt.
Due to the drastic increase in the price of education, Millenials have an average of $28,000 in student loan debt. Add to that, the average young adult carries an average of $5,000 in credit card debt.
Fourth: Millennials are finding it harder than previous generations to save for the future.
That makes total sense given the fact that their expenses are higher and they are saddled with debt. Millennials also aren’t saving as much because very few companies offer pension plans like they did for the Baby Boomer generation. Instead, they offer do-it-yourself retirement plans such as 401Ks.
“All of this means that fewer Millennials are entering the middle class than previous generations. Most have less than $1,000 in savings. Many young people today won’t be able to retire until 75, if at all,” Reich writes.
Reich believes there are steps we can take to improve the financial stability of Millennials and future generations. He suggests policies like debt relief, universal healthcare, paid family leave, affordable housing, and a more equitable tax code for renters.
In the current economy, people are looking for ways to make and save save money more than ever, given the poorer economic outlook. One way folks have been trying to make extra money, or even a full living, is through rideshare services like Uber. However, after one man shared his take-home pay once Uber took its cut, the result has both passengers and passengers and drivers seething.
An English Uber driver shared a breakdown of his seven-day earnings summary. He worked 13 hours, with Uber taking out 1.5% of his pay for rider promotions, 4.5% in third-party fees, and a whopping 26.1% going directly to Uber itself. In the end, the driver took home only 67.9% of his earnings. That means that out of the 13 total hours he drove, he was effectively paid for just under nine hours of work. How is this the case?
In 2023, Uber introduced an algorithm to determine fares and pricing, dubbed “dynamic pricing,” as an alternative to the old “surge pricing” model, which increased fares during periods or areas of high rideshare demand. The new system uses a different supply-and-demand formula to calculate the cost of a ride. There was a presumption that while rides would cost more, a greater portion of the fare would go directly toward the driver’s earnings.
In 2025, a study from the University of Oxford found that Uber’s “dynamic pricing” not only raised the cost of rides for passengers but also took a significantly larger cut of the driver’s overall pay. Research by academics at Columbia University found that the algorithm harmed both American Uber drivers and their passengers..
Haa anybody heard of Uber’s “dynamic pricing”? First it was surge pricing & NOW you’re just showing us cheap prices to charge us expensive prices once the ride is complete?
According to study author Len Sherman, Uber’s dynamic or “upfront” pricing model has allowed the rideshare company to “raise rider fares and cut driver pay on billions of rideshare trips, systematically, selectively, and opaquely.”
This is just one of several issues that has led Uber drivers to take the company to court. After all, many frequent Uber passengers assume that higher fares mean drivers earn more, not less—especially when those same drivers take a financial hit for rider discounts or promotions they aren’t responsible for offering.
There’s also the reminder that Uber drivers are still considered independent contractors, meaning that fuel costs, repairs, and other vehicle maintenance are their responsibility and must be paid out of pocket in order to work. However, some areas have driver pay rates or compensation structures that are fixed or adjusted to comply with state or city laws, but those changes appear to be handled on a case-by-case, city-by-city basis.
If you want to see improvements in both prices and driver take-home pay, rideshare drivers and frequent riders should contact their app’s customer service and reach out to local elected officials to push for fairer fares in their area. After all, drivers and riders should benefit more than the company that isn’t even in the vehicle.
This article originally appeared last year. It has been updated.
She’d paid $5 for her coffee, skipped the card tip prompt at checkout, and left a bill in the jar on her way out the door. The barista noticed, glanced at the cash in her customer’s wallet, and said loudly enough for the room to hear: “Oh wow! A whole dollar… that’s SO generous! Thank you SO much.”
Reddit’s reaction was not especially sympathetic to the barista. “Should have picked that dollar back,” was among the most upvoted responses. Others said they would have asked for a full refund on the drink. The OP herself landed on a version of that position: if a tip is going to be met with sarcasm, why tip at all?
But the incident is a little more complicated than a straightforward etiquette violation, because the math here actually favors the customer. A dollar on a $5 drink is a 20% tip, the same percentage most people consider the standard for a sit-down restaurant with table service. Industry veterans generally say a dollar a drink is a reasonable coffee shop tip, and that baristas at most cafés (unlike servers) are paid standard minimum wage rather than the lower tipped-employee rate that makes gratuities more essential.
None of which makes a public sarcastic remark the right response. But it does situate the incident inside a broader frustration that’s been building for a few years. A Pew Research Center survey found that 7 in 10 American adults say tipping is now expected in more places than it was a few years ago. A Bankrate survey found that 41% of Americans think tipping culture has gotten out of hand, and around 63% have at least one negative view about tipping overall. More than 60% agreed that employers should simply pay workers better so tips don’t have to fill the gap.
The tip jar and the checkout screen have become the place where all of that tension gets concentrated into a single uncomfortable moment. The barista’s comment was out of line. The customer’s dollar was not stingy. And the fact that it’s hard to say either of those things without someone disagreeing is probably the actual story.
This article originally appeared earlier this year.
Several Danish policies are intended to help mothers stay employed.
For example, subsidized child care is available for all children from 6 months of age until they can attend elementary school. Parents pay no more than 25% of its cost.
Using administrative data from Statistics Denmark, a government agency that collects and compiles national statistics, we studied the long-term effects of motherhood on income for 104,361 Danish women. They were born in the early 1960s and became mothers for the first time when they were 20-35 years old.
They all became mothers by 2000, making it possible to observe how their earnings unfolded for decades after their first child was born. While the Danish government’s policies changed over those years, paid parental leave and child allowances and other benefits were in place throughout. The women were, on average, age 26 when they became mothers for the first time, and 85% had more than one child.
We estimated that motherhood led to a loss of about the equivalent of US$9,000 in women’s earnings – which we measured in inflation-adjusted 2022 U.S. dollars – in the year they gave birth to or adopted their first child, compared with what we would expect if they had remained childless. While the motherhood penalty got smaller as their children got older, it was long-lasting.
The penalty only fully disappeared 19 years after the women became moms. Motherhood also led to a long-term decrease in the number of the hours they worked.
We estimated that motherhood cost the average Danish woman a total of about $120,000 in earnings over the first 20 years after they first had children – about 12% of the money they would have earned over those two decades had they remained childless.
Most of the mothers in our study who were employed before giving birth were eligible for four weeks of paid leave before giving birth and 24 weeks afterward. They could share up to 10 weeks of their paid leave with the baby’s father. The length and size of this benefit has changed over the years.
The Danish government also offers child benefits – payments made to parents of children under 18. These benefits are sometimes called a “child allowance.”
Denmark has other policies, like housing allowances, that are available to all Danes, but are more generous for parents with children living at home.
Using the same data, Christensen and I next estimated how motherhood affects how much money Danish moms receive from the government. We wanted to know whether they get enough income from the government to compensate for their loss of income from their paid work.
We found that motherhood leads to immediate increases in Danish moms’ government benefits. In the year they first gave birth to or adopted a child, women received over $7,000 more from the government than if they had remained childless. That money didn’t fully offset their lost earnings, but it made a substantial dent.
The gap between the money that mothers received from the government, compared with what they would have received if they remained childless, faded in the years following their first birth or adoption. But we detected a long-term bump in income from government benefits for mothers – even 20 years after they first become mothers.
Cumulatively, we determined that the Danish government offset about 80% of the motherhood earnings penalty for the women we studied. While mothers lost about $120,000 in earnings compared with childless women over the two decades after becoming a mother, they gained about $100,000 in government benefits, so their total income loss was only about $20,000.
Benefits for parents of older kids
Our findings show that government benefits do not fully offset earnings losses for Danish moms. But they help a lot.
Because most countries provide less generous parental benefits, Denmark is not a representative case. It is instead a test case that shows what’s possible when governments make financially supporting parents a high priority.
That is, strong financial support for mothers from the government can make motherhood more affordable and promote gender equality in economic resources.
Because the motherhood penalty is largest at the beginning, government benefits targeted to moms with infants, such as paid parental leave, may be especially valuable.
The motherhood penalty’s long-term nature, however, indicates that these short-term benefits are not enough to get rid of it altogether. Benefits that are available to all mothers of children under 18, such as child allowances, can help offset the long-term motherhood penalty for mothers of older children.
