U.S. Department of Education
U.S. Department of Education

Last week, investment-banker-turned-public-policy-wonk Steven Rattner wrote a piece in the New York Times called "We're Making Life Too Hard For Millennials."

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His main point was that Americans between 18 and 34 today are much less prosperous than young people in past generations were, despite being better educated, because they are earning less income, saddled with debt and facing higher costs of living. Partly as a result, they're delaying expensive adult undertakings like buying a home or getting married. (Indeed, a new study from Pew showed that the rate of 18-to-34 year olds living with parents or adult relatives remains persistently high.)

The economy is definitely sluggish, and it's true that millennials aren't behaving the way prior generations did. But Rattner misses one important possibility about this generation – that they may end up wealthier than their parents or grandparents; it just might take more time to get there.

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Now, more than ever, earnings are tied to education levels — or the lack of it. Here's a chart from Pew showing how the pay gap between high school and college graduates has soared. The gap is 81% wider for millennials than for Baby Boomers.

earnings gap

As such, the idea of entering the workforce with a GED, high school diploma, or even an associate's or master's degree, is less feasible than it was for Millennials' parents and grandparents.

That is why more young Americans than ever are currently enrolled in school, according to Census data.

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census enrollment
Fusion, data via U.S. Census Bureau

For 22-24 year-olds specifically, the rate has jumped from 24 percent in 1994 to 28.5 percent in 2014.

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In an interview with Fusion, St. Louis Federal Reserve researchers who studied the fortunes of Americans who are at least 40 years old said they didn't bother to examine the younger generation because it will take more time for their wealth – or lack thereof – to truly materialize. All that education takes more time, as does building a career to pay off the associated debt.

"People may not be fully cooked yet," said St. Louis Fed policy analyst Bryan Noeth.

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The following chart from The College Board further helps explain why more Millennials are paying up for higher levels of education than young people in prior generations, or, for instance, why there are more students enrolling in medical school than ever before. If expected earnings for all degrees are falling, then it makes sense to try to move up a notch to the next level of education.

earnings
College Board
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Being in school also makes it harder to do other things like get married and buy a house, which explains the delays in the life decisions Rattner mentions.

There's no way to guarantee that everything will turn out alright for most of today's young adults. Labor force participation for 25-34 year-olds has averaged just 81.5 percent annually since 2009, below the pre-recession high of 83.1, and is showing no signs of ticking upward. Clearly not all of these labor force drop-outs went back to school, and the data raise the prospect, observed in pending research into the gig economy, that current labor force measures now fail to account for folks who may be patching together just enough income sources to stay afloat, but don't consider themselves employed or unemployed.

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But as long as the economy doesn't go into a nose dive again, many young people may even be able to expect to earn more than previous generations, since they're likely to live and work longer than their parents, according to the St. Louis Fed researchers. However, they caution that the institutional headwinds minorities face may keep many of them out of the delayed satisfaction pool.

But in general, there's a good chance things won't stay quite so bleak for Millennials – it will just take longer for them to get rich.

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Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.

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