With the U.S. economy gaining steam, employers are finally hiring -- and those benefits have spread to most corners of the job market. Even America's young adults, who bore the brunt of the downturn, are starting to regain their economic footing.
That doesn't mean all is well for millennials, especially those who entered the workforce when things were at their worst. Improvements in the headline statistics mask some of the longer-lasting effects of the recession. Here are some of the scars that recession graduates may bear for a long time to come.
• They may never make as much money. 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.
• They're not leaving their low-pay jobs. Of course, you could change jobs when a more lucrative opportunity comes along, as that's often the best way to get a meaningful salary bump. The quits rate, which shows the willingness of workers to leave their jobs, held at 1.9 percent in December for all U.S. workers. Even six years into the recovery, that's still down from the pre-recession average of 2.1 percent.
Looking at job tenure, millennials were more likely than older generations to hold onto their jobs early in their career, the Washington Post reported, citing Census data. Jobs were hard to come by during the slump, and now young people may be too scared to let them go.