The glut of job seekers depresses wages in a second way, argues the study. New firms — which create a disproportionate share of new jobs — don't have to pay as much to hire. In 2001, workers at firms 10 years old or less earned 85 percent as much as workers at older firms. By 2011, they were paid only 70 percent as much. And these newer firms matter. From 1998 to 2011, they created 40 percent of net new jobs despite representing only 25 percent of total employment.
It's usually a mistake to generalize about entire generations. The bad luck and bad timing of today's 20-somethings may pass. Birth rates could bounce back. "In the past, women who have postponed births make up for it later," says Pew's D'Vera Cohn. The economic recovery may strengthen; the retirement of baby boomers will create new job openings; and surveys indicate the young remain optimistic despite setbacks.
So the economic escalator may again accelerate. Still, the question nags: Could this become a lost generation?
Robert J. Samuelson is a Washington Post columnist.
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