October 14, 2020 | computer | No Comments
The median annual earnings for full-time working millennials in the U.S. was $40,000 in 2018, about 16 percent lower than the median for all workers of $48,000. Across major metropolitan areas, unadjusted millennial earnings ranged from a low of $25,000 per year to a high of $71,000 per year in San Jose, CA.
Of course, the cost of living varies widely by metro, from a low of 19 percent below average to a high of 31 percent above average. After adjusting for cost of living, the range in earnings narrows from a low of approximately $28,000 per year to a high just over $54,000 annually.
While locations with higher living costs tend to offer higher wages, sometimes wage gains don’t make up for the increased cost, as is the case with San Diego, CA. On the other hand, in metropolitan areas like San Francisco, CA and San Jose, CA higher wages more than make up for increased expenses.
The inverse is also true in low-cost areas. For example, wages can be so depressed that despite lower living costs, residents still experience below-average purchasing power. This is true for Memphis, TN, San Antonio, TX and Tucson, AZ. Fortunately, many low-cost cities offer strong enough wages to boost purchasing power above average, as is the case with many large Midwestern metropolitan areas, such as Minneapolis, MN and Columbus, OH.
While one might expect that cities offering the most purchasing power would attract more residents, the analysis found no significant correlation between adjusted millennial earnings and population growth. Across the best-paying cities for millennials, there’s a wide range in growth rates. For example, Austin, TX grew 15 percent over the past five years, whereas Pittsburgh, PA saw a population decline.
To determine the best-paying cities for millennials, Fabric analyzed data from the U.S. Census Bureau’s 2018 American Community Survey Public Use Microdata Sample (ACS PUMS), the U.S. Census Bureau’s Population Estimates, the Bureau of Economic Analysis’s Regional Price Parity dataset and Zillow. The Pew Research Center defines millennials as the generation of people born in 1981-1996, meaning millennials were 22 to 37 years old in 2018.
Statistics on the median earnings for full-time millennial workers, median earnings for all full-time workers and the share of workers in STEM occupations are from the U.S. Census Bureau’s 2018 American Community Survey Public Use Microdata Sample (ACS PUMS). STEM occupations are defined according to the Census Bureau’s 2018 list of STEM Occupation codes. The cost-of-living index is from the Bureau of Economic Analysis’s Regional Price Parity dataset for 2017, and the 5-year population change is calculated as the percent change in population from 2013 to 2018 using the U.S. Census Bureau’s Population Estimates. Median home list price data is sourced from Zillow.
To make earnings comparable across locations, median earnings for each metro were adjusted using the cost-of-living index for that metro. Earnings in expensive metros were adjusted down to reflect lower purchasing power while earnings in relatively affordable cities were adjusted up to reflect higher purchasing power.
Metro areas are ranked by the cost-of-living adjusted median earnings for full-time millennial workers.
Only metropolitan areas with at least 100,000 people were included in the analysis. Additionally, metro areas were grouped into the following cohorts based on population size:
- Small metros: 100,000-350,000
- Midsize metros: 350,000-1,000,000
- Large metros: more than 1,000,000