Professional Documents
Culture Documents
BEING YOUNG
Climate Change and
Millennials Economic Future
August 2016
AUTHORS
NEXTGEN CLIMATE DEMOS
NextGen Climate is a San Francisco-based Demos is a public policy organization working for
environmental advocacy organization. Founded an America where we all have an equal say in our
by businessperson and philanthropist Tom democracy and an equal chance in our economy.
Steyer in 2013, we act politically to prevent
climate disaster and promote prosperity for Our name means the people. It is the root word
every American. Working at every level, we of democracy, and it reminds us that in America,
are committed to supporting candidates, the true source of our greatness is the diversity
elected officials, and policymakers across the of our people. Our nations highest challenge is to
country that will take bold action on climate create a democracy that truly empowers people
change. NextGen Climate Action is a 501(c) of all backgrounds, so that we all have a say in
(4) organization. NextGen Climate Action setting the policies that shape opportunity and
Committee is a political action committee. provide for our common future. To help America
meet that challenge, Demos is working to reduce
both political and economic inequality, deploying
original research, advocacy, litigation, and
strategic communications to create the America
the people deserve.
CONTENTS
KEY FINDINGS II. MILLENNIALS CLIMATE COSTS:
THE HIDDEN PENALTY OF INACTION ON
INTRODUCTION
CLIMATE CHANGE
I. MILLENNIALS HIGH COSTS IN THE III. FROM COSTS TO OPPORTUNITY
NEW INEQUALITY ECONOMY
A. The Biggest Generation Gets A. Reducing GHG Emissions =
the Rawest Deal Investment =Jobs for the Future
B. Higher Education and Student Debt B. Benefits of a Clean Energy Economy
C. Paid Parental Leave and Child C. Targeting of Investment Can
Care Needs Enlarge Impacts
D. The Struggle to Find Jobs IV. WINNING ON CLIMATE: YOUNG VOTERS
1. Unemployment and
APPENDIX
Underemployment
2. Stagnant Wages END NOTES
This report quantifies the cost of climate change to yy The economic losses caused by climate
millennials and their children, compared to a world change are substantially greater than the
without climate change. The climate change costs damages of other economic challenges.
are compared to other significant economic burdens Student debt costs the median-
millennials will face over the course of their lifetime, earning college-educated individual
including student debt, child care, stagnant wages, and approximately $113,000 in lost wealth
the lack of good jobs. The key findings of this analysis over a lifetime, due to reduced savings
include: for retirement and homeownership.
Losses from the Great Recession cost
yy Without action on climate change,
the median-earning college-educated
a 21-year-old college graduate in the class
household $112,000.
of 2015 earning a median income will lose
$126,000 in lifetime income, and $187,000
We must act quickly to address climate change
in wealth*.
because the impacts are occurring now faster and
yy Without action on climate change,
stronger than predicted:
a 21-year-old earning a median income
will lose $100,000 in lifetime income,
yy July 2016 was the 15th straight month of
and $142,000 in wealth.
record-breaking heat.1
yy For the children of millennials, the losses from
yy The 21st century has seen 15 of the 16
climate change will be drastically greater.
hottest years on record. 2
A child born in 2015 with median earnings
yy For the eighth consecutive year, extreme
will lose $357,000 in lifetime income and
weather has cost U.S. taxpayers over $10 billion. 3
$581,000 in wealth.
yy Sea levels are rising and in Miami, Norfolk,
A child born in 2015 with median earnings
and other coastal cities, tidal flooding is
and a college degree will lose $467,000 in
becoming the norm even on days without
lifetime income, and $764,000 in wealth.
storms.
yy Without action on climate change, the
yy Drier and longer droughts are threatening
millennial generation as a whole will lose
our public health and crops.
nearly $8.8 trillion in lifetime income.
*We calculate wealth as long-term savings if lost income due to climate change were to be invested in a conservative
portfolio of stocks and bonds returning 3.5 percent annually.
We must transition to a 100 percent clean energy economy
in order to avoid the devastating economic impacts of climate
change detailed in this report. And we must capitalize on
the significant economic driver clean energy can be for the U.S.
economy. According to a recent study from ICF International , 4
Millennials are already facing many difficulties many reasons that the millennial generation is likely
in an economy slowly recovering from the worst to be the first in our countrys history to be worse off
economic collapse since the Great Depression. Quality than the generations which preceded it.
full time jobs are often out of reach for many young
people, wages have stagnated, and millennials have But millennials face a challenge unlike anything
less wealth and financial stability than previous previous generations have had to tackle. Unless our
generations. Getting a college degree is less and less elected leaders take aggressive and immediate action,
affordable, and student debt has exploded. Without the millennial generation will have to live with the
access to quality, affordable child care, young parents devastating economic, health, and environmental
have to fend for themselves as they struggle with the impacts of climate change.
financial burdens of caring for their children in the
years prior to K-12 schooling. These are some of the
Climate change will have a significant impact on earning college-educated individual
millennials household incomes and wealth, with approximately $113,000 in lost wealth
rapidly worsening effects by mid-century, as the over a lifetime, due to reduced savings
youngest millennials reach their peak earning years. for retirement and homeownership.
In this report, we investigate these economic losses for Because of the Great Recession, the
millennials and future generations if we fail to act on median-earning college-educated
climate change, compared to a scenario of no climate household lost $112,000 in wealth.
change. Our study finds that:
FIGURE 01 100
91%
PERCENTAGE OF BACHELORS RECIPIENTS
86% 87%
84%
BLACK AND 81%
80 74%
LOW-INCOME 72%
STUDENTS ARE MORE 64% 63% 63% 60%
WITH DEBT, 2012
60
LIKELY TO BORROW
46%
FOR A BACHELOR'S
DEGREE 40
20
PUBLIC UNIVERSITY
PRIVATE NON-PROFIT 0
TOTAL WHITE BLACK HISPANIC NEVER RECEIVED
UNIVERSITY RECEIVED PELL
PELL
PAID PARENTAL LEAVE AND
CHILD CARE NEEDS
Today nearly four out of ten young adults age 25-34 potential negative health consequences for mothers
are raising children, and millennials are the parents and infants alike. 16 And some new mothers
of most new babies born in the United States. 12 Yet including 26 percent of working black women having
millennial parents face formidable challenges when their first child, 24 percent of Latinas and 21 percent
it comes to caring for their children. This begins of white women report quitting their jobs entirely
immediately at birth, when most parents lack paid in order to take care of a new baby. 17 Among the same
time off to care for a new baby, which only continues group, 6 percent of black women, 8 percent of Latinas
with the exorbitant cost of childcare, the lack of and 4 percent of white women say their employers
public preschool, and the high price that parents fired them after their baby was born. 18
pay for taking time out of the workforce to care for
children. Although 73 percent of women age 25-34 are In order to remain in the workforce, parents must
11
in the labor force and 40 percent of households with often pay the exorbitant cost of child care. According
children are supported by mothers as the primary to the research and advocacy group Childcare
source of income for the family, our economy is largely Aware, the average cost of full-time care for a single
structured as if all families still had a stay-at-home infant in center-based care ranges from $4,822 a
parent raising children. 13 year in Mississippi to $17,062 in Massachusetts. 19
Similarly, costs to place a 4-year-old in a childcare
Unlike nearly every other wealthy democracy, providers home range from $3,675 in Mississippi
the United States offers no guarantee of paid to $10,000 in Massachusetts. The expenses add up
time off for parents to care for a new baby. 14 quickly: Childcare Aware estimates that married
While some employers voluntarily provide paid couples earning the median family income in their
time to new mothers and fathers, these benefits state would have to spend between 6.8 percent and 15
are disproportionately offered to highly-paid percent of their income on center-based care for their
professionals, leaving out the majority of working infant during a full workweek. For single parents
people. In 2015, only 12 percent of full-time workers the costs can be even more overwhelming, with an
age 25-34 had access to paid family leave through average annual cost of over 40 percent of the state
their employers.15 For young workers employed part- median income for single mothers in every state.
time, just 5 percent have access to paid family leave. While some low- and moderate-income families
Furthermore, black and Latino/a parents are less receive public subsidies to help defray the cost of child
likely than white parents to have access to paid time care, eligibility for this assistance varies widely by
off for a new baby. state, and some states have long waiting lists that
prevent eligible families from accessing child care.
As a result, one in four mothers report returning to
work within two weeks of giving birth, despite the
THE STRUGGLE TO FIND
GOOD JOBS
UNEMPLOYMENT AND STAGNANT WAGES
UNDEREMPLOYMENT
The jobs millennials do find often pay less than the
The Great Recession could not have come at a worse jobs previous generations of young people enjoyed.
time for millennials.20 Just as many were entering the For the past several decades, wages and incomes for
job market for the first time, the economy bottomed most families have remained stubbornly stagnant or
out, significantly shrinking the supply of jobs and even decreased. The average young white worker (age
shifting many jobs to part-time hours. 25-34) earns about the same as his counterpart from
a generation or two ago, while the average millennial
The job market has slowly improved, but many black or Latino worker earns slightly less than their
young people (ages 25-34) still face persistent counterparts in previous generations. Women have
12 unemployment. This is especially true for young seen a boost in average earnings, while the average
workers of color. Around one in seven young black young male worker earns over $7,000 less annually
workers were unemployed for 5 weeks or more in than he would have in 1980 (Table 3).
The Price Tag of Being Young: Climate Change and Millennials Economic Future
YOUNG BLACK WORKERS FACE A PERSISTENT YOUNG WORKERS WITHOUT COLLEGE DEGREES
UNEMPLOYMENT CRISIS FACE BLEAK EMPLOYMENT PROSPECTS
YEAR SHARE OF YOUNG WORKERS UNEMPLOYED 5 WEEKS OR MORE YEAR PERCENT OF WORKERS UNEMPLOYED FOR FIVE WEEKS OR MORE
1980 12.5% 24.4% 17.0% N/A 1980 24.4% 15.4% 12.2% 7.3%
1984 11.8% 21.3% 17.3% N/A 1984 24.1% 15.4% 10.1% 6.7%
1989 8.7% 19.1% 12.9% 9.2% 1989 18.7% 11.6% 8.2% 4.5%
1994 9.2% 16.0% 12.2% 8.9% 1994 18.1% 12.1% 8.6% 6.3%
1999 5.6% 9.8% 8.0% 6.1% 1999 12.9% 7.2% 5.8% 3.6%
2004 6.9% 13.5% 8.3% 6.4% 2004 11.3% 9.5% 8.0% 4.9%
2009 12.1% 18.5% 16.1% 11.1% 2009 24.7% 17.7% 12.3% 7.9% 13
2014 6.7% 14.3% 9.4% 7.7% 2014 15.5% 10.2% 9.4% 4.5%
Source: Demos calculations from the Current Population Survey. Young workers defined Source: Demos calculations from the Current Population Survey. Young workers defined
as ages 25-34. as ages 25-34.
TABLE 03 TABLE 04
Asian/ Bachelors
Less than HS Some
Men Women White Black Hispanic Pacific Other* HS Diploma Degree or
Diploma college
Islander higer
1980 $44,763 $25,891 $36,607 $28,768 $28,256 N/A $31,818 1980 $23,420 $32,220 $36,156 $45,108
1985 $41,895 $26,454 $36,646 $26,785 $26,443 N/A $32,199 1985 $21,470 $30,850 $35,535 $47,699
1990 $39,727 $27,324 $36,284 $26,327 $25,015 $35,953 $28,857 1990 $19,773 $29,205 $36,280 $47,527
1995 $37,561 $27,392 $35,617 $26,440 $23,602 $34,602 $23,330 1995 $19,360 $27,996 $32,350 $46,698
2000 $41,296 $31,687 $41,295 $31,384 $27,530 $42,396 $28,218 2000 $20,923 $30,779 $35,892 $52,307
2005 $37,867 $30,359 $38,361 $29,128 $26,701 $42,479 $33,497 2005 $21,846 $29,131 $35,136 $48,608
2010 $36,960 $31,609 $38,043 $27,774 $25,000 $40,217 $30,435 2010 $18,478 $27,174 $32,609 $48,113
2014 $37,044 $30,036 $37,945 $26,035 $26,031 $40,047 $26,031 2014 $20,024 $26,241 $30,036 $49,063
Source: Demos calculations from the Current Population Survey. Income levels are for all workers and are Source: Demos calculations from the Current Population Survey. Income
in 2015 dollars. * Other includes Asian Americans from 1980-1986. American Indians are included in levels are for all workers and are in 2015 dollars.
other because of sample size constraints.
FIGURE 02
50
45.8%
Demos calculations from the Current
Population Survey, Young workers
defined as ages 25-34.
PERCENT OF PART-TIME YOUNG WORKERS
40
36.1% WEALTH AND
DOING SO FOR ECONOMIC REASONS
In the broader public narrative, the economic fuel pollution, with sharply negative health impacts
challenges described above are often discussed as part including high rates of asthma and other health
of a larger systemic crisis in our economythe crisis conditions. If the transition to a clean energy economy
of inequality. The impacts of climate change, however, is delayed, or if it is implemented unequally in keeping
are rarely factored into this narrative. But our findings with historical patterns of racial exclusion, the fossil
show that climate change is an integral and major fuel economy will only deepen its toll on the health and
part of systemic inequality. We already know that its well-being of Americas poorest and most vulnerable
damages areand will continue to befelt unequally. communities.
Communities of color and low-income communities
will be hit the hardest, as these communities have However, there is another form of inequality at the
fewer resources to deal with the impacts of climate heart of climate changegenerational inequality, in
changefor example, in protecting themselves the form of younger and future generations bearing a
from extreme weather events. Further, these same disproportionate share of the devastating economic
communities have always had the highest exposure to costs of the climate crisis. The fact is, unchecked
coal-burning power plants and other sources of fossil climate change will impose heavy costs on millennials
and subsequent generations, both directly in the form childcare needs, stagnant wages, involuntary
of reduced incomes and wealth, and indirectly through underemployment, and, for young people of color
likely higher tax bills as extreme weather, rising sea in particular, high rates of joblessness, the climate
levels, drought, heat-related health problems, and penalty could be a knockout blow for millennials.
many other climate change-related problems take Thus, while millennials are the greatest hope for
their toll on our society. The climate penalty alone a more progressive, inclusive, and democratically
is likely to significantly reduce the living standards empowered society, their future is all too precarious
of the largest generation in our history and will thanks to a profound failure of leadership on the
have an even more severe impact on the children of serious economic challenges, and the huge climate
millennials. This burden alone would be crippling, risks, they uniquely face.
but combined with the costs of student debt, unmet
ECONOMIC COSTS
Virtually all scientists agree that climate change Sea levels are rising and in Miami, Norfolk, and other
is a human-made crisis driven by skyrocketing coastal cities, tidal flooding is becoming the norm
emissions of heat-trapping greenhouse gases even on days without storms. Over 10 million acres of
(GHG) into the atmosphere, which are causing the American forest burned in 2015, the worst wildfire
planet to warm at an alarming rate. These gases, most season on record. We know that drier and longer
notably carbon dioxide and methane, are emitted by droughts are threatening our crops and pelting rains
the production and consumption of fossil fuels for are leading to more frequent inland flooding. We know
power generation, by fossil fuel-intensive industrial that Arctic ice covers less of our northern ocean than
and commercial development, by gasoline-powered ever before, in both summer and winter, and that the
transportation amid vast residential sprawl, as well ice caps of Antarctica and Greenland are shrinking
as by deforestation, certain kinds of agriculture, and rapidly. All of these changes are happening as average
other destructive land-use practices. These practices global temperatures have risen more than one degree
either generate GHG emissions or deplete natural Celsius compared to preindustrial levels.
sinks that absorb carbon dioxide and other greenhouse
gases, or do both. If significant climate change impacts are already
evident today then it should be patently clear that
The driver of climate change impacts is rising global urgent action is needed to reduce GHG emissions
temperatures and changing weather patterns, where dramatically in a very short time to limit further
even small shifts can have massive impacts on a large warming. The Paris Agreement of 2015 commits
scale. The impacts of climate change are occurring the United States and more than 180 other countries
now, faster and stronger than predicted. July 2016 to reductions that will keep global warming below
was the 15th straight month of record-breaking heat. 2 degrees Celsius compared to preindustrial levels,
which is estimated to require at least an 80 percent But what does this mean for individual households,
reduction in emissions by 2050. and particularly for millennials who will bear the
brunt of rapidly rising climate change costs by the
Many commonly used economic models of climate middle of this century? We can estimate the climate
change damages in the United States emphasize costs facing millennials with the help of a model
several major areas of impact, varying regionally: developed by researchers from Stanford University
and University of California at Berkeley, with which
yy Rising sea levels that will eventually they measure the effects of rising temperatures on
inundate coastal communities. long-run economic growth. 25 Drawing on 50 years of
yy Rising frequency and intensity of extreme historical data from 166 countries, and using rigorous
weather events and related flooding. controls, they investigate how rising temperatures
will affect national productivity. In a no climate
yy Extreme water stress due to combined
action scenario, they find that, by 2100, global per
effects of over-consumption and climate-
capita GDP will shrink by 23 percent relative to per
related water supply shrinkage, with likely
capita GDP in a world without climate change. The
18 mega-droughts in the Southwest, California,
U.S. GDP, without climate action, is projected to take
and the Central Great Plains states.
a hit of 5 percent by 2050, and, by 2100, 36 percent of
yy Climate-related health impacts from
U.S. GDP per capita will be lost due to climate change.
various sources, including heat waves,
The Price Tag of Being Young: Climate Change and Millennials Economic Future
$200,000
$187,000
$150,000
$142,000
LOST WEALTH
$100,000
$50,000
19
AGE 21 30 40 50 60
FIGURE 04
$800,000
$764,000
$600,000
$581,000
LOST WEALTH
$400,000
$200,000
AGE 21 30 40 50 60
FIGURE 05
200,000
percent of her lifetime income. If the income were $187,000
saved, she would lose approximately $187,000 in Lost Wealth
lifetime wealth (Figure 3). from Climate
Change,
Median
As climate damages accelerate after 2050, the 150,000 21-year-old
children of millennials will be hurt drastically more College
Graduate,
than their parents. For example, a median earner
Class of 2015
born in 2015 will lose $357,000, or 11 percent of her $113,000 $112,000
lifetime income, and $581,000 in lifetime wealth
DOLLARS
Lost Wealth Lost Wealth
due to climate change, if the income were saved. The 100,000 from Student from the Great
median-earning future college graduate born in Debt, Median Recession,
College- Median
2015 would lose approximately $467,000 in lifetime Educated College-
income and $764,000 in lifetime wealth (Figure 4). Worker Educated
Household
In the aggregate, the millennial generation will lose
approximately $8.8 trillion in lifetime income if we 50,000
20
fail to act on climate change. If we assume that only
15 percent of that lost income will be saved (because
many lower-earning millennials will not be able
The Price Tag of Being Young: Climate Change and Millennials Economic Future
21
24
Young people today have inherited two major this transition, in 2050 we will create up to 2 million
challenges unlike any faced by the two previous new jobs, boost our economy by $290 billion, increase
The Price Tag of Being Young: Climate Change and Millennials Economic Future
generations since World War II. Climate change household disposable income by $650, and save
is already damaging our world and our country in families $41 billion on energy bills.
significant ways, and we only have a small window left
for bold action to avert the most serious impacts and Due to their huge numbers, their diversity, and their
riskswhich will accelerate during millennials peak progressive values, millennials voting power is the
earning years and dramatically so for the children key to winning these two fights, and we wont win
of millennials. Millennials are also confronted with either if we dont fight them together. If we dont
difficult economic challenges and the everyday spectre take serious action on climate change, the profound
of intensifying inequality and racial divides serious economic costs will drain the resources we need to
crises that challenge their progressive beliefs and reinvest in our communities and level the playing
views. Each of these crises on its own threatens to end field for young people, especially young people of color.
the progress all American generations have enjoyed Put simply, climate needs to be part of the agenda on
compared to their predecessors, but taken together, inequality, and inequality needs to part of the climate
which is the current reality for millennials, the impact agenda. Indeed, the opportunity to marry climate and
will be devastating. equity goals is already materializing in the form of new
investments in achieving a low-carbon economy and
We must transition to a 100 percent clean energy creating clean energy jobs. We can tackle inequality
economy in order to avoid the devastating economic and climate change alike if we act before its too late.
impacts of climate change detailed in this report. And It all comes down to democracy. Young people have
we must capitalize on the significant economic driver the numbers, the values, and the ideas to get our
clean energy can be for the U.S. economy. If we make country on the right track for solving climate change
and inequality, and solving them together for people, opinion gaps present an enormous opportunity for
planet, and prosperity. But they must show up on young voters to put climate on the ballot in 2015. But
Election Day, in 2016 and beyond. The voices of the power to force such action by our elected leaders
millennials have too often been missing in the political lies, first and foremost, in voting.
process that has brought us to this time of reckoning.
Now we need to fill the halls of our democracy with Low turnout among young people has been a problem
young peoples voices, our best hope for winning on for decadesand its a major reason why it often seems
climate and equity alike. like politicians arent responding to the concerns of
younger generations. Simply put, most elected officials
Millennials now equal Baby Boomers as a share of pay little attention to the needs and concerns of people
eligible voters, which should give them the power to who do not vote. 32
demand real solutions for the problems millennials
uniquely face. But their numbers cant drive change if Young peoples voting power can be a major force for
they do not vote. Historically, young people have not achieving a future that is equitable, opportunity-rich,
turned out to vote at the same rate as their parents. and as safe as possible from the catastrophic risks of
25
According to Census Bureau data, only 43 percent of climate change. The opportunity is therebut only
eligible young people (18-24) voted in 2012, compared if young people turn out to vote in record numbers in
with 73 percent of eligible people who were 65 or older. 2016 . Thats the way for millennials to ensure that
In the typically lower-turnout midterm election of their voices are heard at this pivotal turning point for
2014, the age gap in turnout was even larger, 18 percent their own future, and for the future of our nation.
compared to 63 percent. 31
DATA We also calculate the future value of the lost income from saving
due to lost wages. We assume each age would have saved 12 percent
For our estimation exercise, we relied on two main data sources:
of the lost wage income. We then estimate that this lost savings
yy The projected per capita GDP with and without
would have earned returns averaging 3.5 percent annually, in real
climate change (for the period 2010-2099) are
terms, until retirement.
borrowed from Burke, Hsiang, and Miguel (2015). The
projections are in turn based on SSP5 of the Shared FVage=LostIncomeage * (1 + 0.035)N,
Socioeconomic Pathways database and on RCP8.5 of N=number of periods (years)before retirement
the Representative Concentration Pathways.
yy The second source of data is the the Current
Population Survey (CPS) produced and distributed by RATIONALE
Minnesota Population Center (2010), which was used
We use wage income instead of personal income (which includes
for wage income data.
wage income), because asset income (the other major source of
yy Estimates for real wage increase projections were personal income) can have varying geographical sources, hence it
taken from the Social Security Administrations wont be a reliable indicator if we are solely interested in studying
Trustees Report, using the projections from their the effects of temperature changes on productivity of a certain
intermediate scenario.
geographical area, in our case the United States.
METHODOLOGY Why do we use median wage income instead of mean wage income?
From the illustration provided in the descriptive data, the gap As a measure of central tendency, the mean can be significantly
between GDP/Capita without climate change and GDP/Capita with impacted by outliers. For wage income, this is often the case,
climate change is increasing over the years. We use the percentage particularly when looking at the wage income younger or older
change between the two to estimate the change in individual workers.
wage income under the scenario of climate change. We assume
the relationship between the change in GDP/Capita and the wage
income is linear. BIBLIOGRAPHY
Burke, M., Hsiang, S. and Miguel, E. (2015). Global non-linear
The loss of wage income at any given year is derived as follow: effect of temperature on economic production. Nature, 527(7577),
pp.235-239.
GDP\Cap ClimateChange(t)
Loss of wage income(t)=(1- ) * WageIncome(t) King, M., Ruggles, S., Trent, A., Flood, S., Genadek, K., Schroeder,
GDP\CapBaseScenario (t)
M., Trampe, B. and Vick, R. (2016). IPUMS CPS. [online] Cps.
ipums.org. Available at: https://cps.ipums.org/cps/ [Accessed 14
We assume that the distribution of wages by age will not change
Jul. 2016].
over time. Wages are then adjusted to constant 2015 dollars. To take
into account real wage growth we multiply the above equation by Social Security Administration (2016). The 2016 Annual Report
the 1.2 percent, derived from the Social Security Administrations of the Board of Trustees of the Federal Old-Age and Survivors
calculations. Insurance and Federal Disability Insurance Trust Funds.
ENDNOTES