Study Cites Lower Earnings, Fewer Marriages, Higher Costs : Those Under 30 Found to Be in Economic Bind

WASHINGTON — While the good times were rolling for many of their seniors, life has been tough for a majority of Americans under 30 who formed families in the last few years, according to a study made public Sunday by the Children’s Defense Fund.

“Americans younger than 30 are suffering a frightening cycle of plummeting earnings and family incomes, declining marriage rates, rising out-of-wedlock birth rates, increasing numbers of single-parent families and skyrocketing poverty rates,” Marian Wright Edelman, president of the fund, said in a foreword to the study.

Challenges Claims

In another report issued here, the liberal-leaning Economic Policy Institute challenged the Reagan Administration’s claims to 68 months of economic expansion and contended that real wages have been declining since 1973 because of inflation so that “poor persons are now deeper in poverty.”

‘Deeper in Poverty’

Changing the emphasis officials put on figures released last week by the Census Bureau, which included a finding that individual incomes reached a historic high in 1987, the Policy Institute said the data also showed that “poor persons are now deeper in poverty.” It blamed “the expansion of low-wage jobs, cutbacks in government cash assistance to the poor, the collapse of the purchasing power of the minimum wage and continued race and sex discrimination.”

The Washington-based Children’s Defense Fund, established in 1973 to advocate the interests of children, cooperated on its survey with Northeastern University’s Center for Labor Market Studies. Their joint report, titled “Vanishing Dreams: The Growing Economic Plight of America’s Young Families,” analyzed developments that affected those families between 1973 and 1986. It found that:

--While family incomes held steady overall, median family incomes adjusted for inflation for all families with children headed by individuals younger than 30 fell by 26% during the period, even though the number of two-income families increased. Shrinkage in manufacturing employment and inflation were cited as the main causes.

--The proportion of children living in poverty rose from 21% in 1973 to 35% in 1986.

--Median earnings of the heads of the under-30 families fell by 30%. Every racial group was affected, but the incomes of young black breadwinners were cut in half and young Latinos earned nearly a third less than before. Those with the least education lost most.

--Marriage rates for males under 30 fell by a third while the proportion of out-of-wedlock births to women in the same age group rose from 15% to 28%.

--Many young families with children were priced out of the housing market because that part of their incomes required to carry a mortgage on an average-priced dwelling more than doubled, rising from 23% in 1973 to 51% in 1986.

--Women under 30 were less likely to get prenatal care, primarily because health insurance costs were rising while incomes were falling. The study found that there was no health insurance coverage for 21.5% of children in families headed by people under 30, or for 27% of children whose parents were under 25.

Urges Passage of Legislation

Holding that these findings “should scare us all” since “these are the children on whom we must rely to be the workers, leaders, parents, taxpayers, soldiers and hope of the 21st Century,” Edelman urged that Congress act promptly on two pending pieces of legislation.

One is a controversial proposal to increase the national minimum wage, now pegged at $3.35 an hour, by a dollar or more, depending on final congressional decisions. Some business groups have fought the measure, but Edelman argued that it is needed to “recapture the ground lost to inflation in the 1980s.”

The other bill would authorize $2.5 billion a year for day care to be distributed to states through direct grants or through vouchers to parents.

Recommends Actions

In addition, the study urged a “longer-term investment strategy beginning in 1989 to restore a strong economic base for young families.” Without offering any cost estimates, it recommended a number of actions. Among them:

Extension of Medicaid coverage to apply to all pregnant women and children in families with incomes less than twice the poverty level, expansion of the earned income tax credit to enhance its benefits for low-income families, new emphasis on federal aid for first-time home buyers and rental assistance for low-income families, “comprehensive strategies” to prevent teen-age pregnancies and increases in Aid for Families with Dependent Children benefits.