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Earnings for Young Americans: Which City Tops the List?

By / 12.22.2014

For young Americans, Washington, D.C. may have more to offer than government jobs and free museums.  It may also provide more opportunities to get a raise than any other top 10 U.S. city.

According to my analysis of new Census data on young Americans, Washington, D.C. was the only top 10 U.S. city, by population, where young workers saw an increase in real median earnings since 2000 (in addition to having the highest real median earnings overall).  Young workers in every other top 10 U.S. city experienced sizable declines.  More than half – six – of the top 10 cities saw declines greater than 10 percent, with young workers in Miami and Atlanta enduring real declines of more than 15 percent.

The table below shows the 2000-2013 change in real median earnings for young Americans age 18-34 working full-time by major U.S. city, where 2013 is measured as a five-year average over 2009-2013. Data for 2000 comes from the 2000 Census long form, and data for the 2009-2013 five year average comes from the American Community Survey 2009-2013 five-year estimate.

Median Earnings for Young Americans Aged 18-34 in the Ten Most Populated Metro Areas

  2013 Median Earnings         (in 2013$)* 2000-2013 Change           (in 2013$)** 2000-2013 Percent Change** Percent of 18-34 year-olds with a college degree or higher, 2013**
Washington, D.C. 47,380 1,560 3.4% 38.9
Boston 44,548 -2,196 -4.7% 38.9
New York City 42,108 -3,216 -7.1% 33.3
Philadelphia 39,413 -3,582 -8.3% 28.5
Houston 33,674 -4,082 -10.8% 21.0
Los Angeles 33,667 -4,200 -11.1% 23.6
Chicago 38,415 -5,111 -11.7% 30.2
Dallas 33,369 -5,660 -14.5% 22.6
Miami 30,728 -5,683 -15.6% 20.6
Atlanta 34,573 -7,203 -17.2% 25.4
US Average 33,883 -3,472 -9.3% 22.3
*Full-time, year round workers aged 18-34, where 2013 is the average median real earnings over 2009-2013
**Where 2013 is the five-year average over 2009-2013
Source: 2000 Census Long Form, 2009-2013 American Community Survey, PPI

That real median earnings increased in Washington, D.C. while falling elsewhere might help explain why the nation’s capital has become an increasingly popular place to be for young people. The number of 18-34 year-olds living in the D.C. metro area has increased by 19 percent, or 226,000, since 2000, compared to one percent increases in Chicago and New York, and 9 percent nationally. Washington, D.C. also has a high share of employment dependent on the federal government, and a highly educated youth population, both of which may have been less affected by the economic downturn. (Houston, however, was the top city for youth inflows in spite of falling real median earnings, which saw its 18-34 year-old population increase 25 percent since 2000.)

Still, falling real median earnings across the board outside Washington, D.C. suggests the underlying issues affecting young workers is not solely about educational attainment or geography. Other major cities with a higher than average share of young college graduates, such as New York and Chicago, also experienced a decline in real median earnings. This is consistent with my previous research, which shows falling real average earnings for young college graduates at a time when many are questioning the value of a college degree.

Overall, the sharp decline in real median earnings for young workers is troubling. It suggests young Americans continue to face strong financial headwinds during their professionally formative years. Moreover, it could hinder young people’s ability to fully participate in the greater economy long-term. That has significant implications for politicians on both sides of the aisle, especially Democrats who care about creating a more convincing pro-growth agenda.