America's younger workers losing ground on income

• The entry of women into the workforce in those decades has helped push median family incomes up over time. But even when men and women are included together, younger workers (age 25-34) are earning well below what they did in 1970. And at all ages, evidence suggests that families are putting in more hours of work to make their household incomes rise.

• Even with extra time at work, median family income has barely budged since 1995 for householders below 45, up about 5 percent after inflation through 2004.

Those aged 45 to 54 did better, with family incomes rising 23 percent during that period, according to the numbers released last week from the Federal Reserve Board.

And since the end of 2001, at the outset of the current economic expansion, younger workers again have underperformed, with incomes generally falling while their older counterparts have seen incomes rise.

That all helps explain the subtitle of Ms. Kamenetz's book: "Why now is a terrible time to be young." The book is partly a manifesto on generational politics, as she eyes the cost of baby boomers' retirement for her generation.

It's unfair, some economists say, to blame the baby boom generation, since the larger issue is that healthcare costs keep rising and people keep living longer in general. Rising healthcare costs are hitting younger workers in another way, too. As benefit costs rise, employers often have less left to boost wages.

Another factor behind the weak incomes for younger generations may be shifts in household composition.

The past few decades have seen a rise of single-parent and nonfamily households, which typically have lower incomes than married-couple households.

Perhaps most significant, though, is a labor market that has become tougher on workers, especially those with lower skills. Global competition has compressed wage gains.

Thus, despite a boom in worker productivity, "what the typical family or typical worker has to show for it has been remarkably little," says Dean Baker, an economist at the Center for Economic and Policy Research in Washington.

In his view, the biggest issue is the rising inequality of incomes during the past quarter century.

At the Blue Frog Bakery, Ms. Brown sees that trend among her own peers. "People are either doing phenomenally well or living paycheck to paycheck," she says, as the smell of fresh croissants wafts through the air.

Still, many economists say progress is possible.

"In the long run I'm optimistic," says Michael Shields, an economist who specializes in demographics at Central Michigan University in Mount Pleasant.

What worries him most, he says, is the long work hours for his children who are just out of college. "When are they going to be able to take a break?" he asks. "I don't see it."

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