Effects of the recession lingering for millennials


BLOOMBERG: While much of the country is emerging from the effects of the recession, younger workers may never fully recover.

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BLOOMBERG: While much of the country is emerging from the effects of the recession, younger workers may never fully recover.

When you’re desperate for a paycheck, you take whatever you can get. During periods of economic turmoil marked by high unemployment, job-seekers are more likely to take roles at lower paying companies, because that’s what’s available to them, according to a National Bureau of Economic Research paper by Yale Economist Lisa Khan. The pool of talent is bigger and more competitive, allowing employers to cut salaries.

A depressed starting salary could mean less income for decades, Khan’s research showed. Setting a low bar on your payscale to begin your career makes it harder to climb the ladder. Another study found the initial losses in income endured by new graduates entering the labor force during a downturn are significant and persist for 8-10 years.  It also means your annual raise could be incrementally smaller for years thereafter,  eroding your lifetime earnings. 

The article ran down three other ways millennials are still hurt by the recession.

Read more here.