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Why higher pay hasn’t made young adults feel richer

The aspiration gap has turned everyone into losers, especially graduates

A new and exasperating form of debate has taken hold in recent years. One group of people says the economy isn’t working for them, that they feel squeezed or dissatisfied with their lot. Another presents a set of charts proving them wrong. The line goes up; how can you be disgruntled? Typically the things discomfiting the first group are different from the things shown in the chart, and nobody ends up satisfied.

The classic example is inflation. Price spirals are uniquely psychologically and societally destabilising, with research showing they reliably result in social strife even if earnings keep pace with prices. Pointing to steady real wages misses the point when the complaint is about rising nominal prices.

Another example is the question of whether today’s young adults are really worse off than the generations that came before them. They certainly seem to think so. But it’s frequently pointed out on both sides of the Atlantic that they actually earn more than their parents did at the same age. Case closed.

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