Generation Y: What Is a Lot of Money?

[Note: This blog post was updated in February of 2011 to reflect more current salary numbers. For updated information, see PayScale’s Career Research Center.]

People in my generation (Generation Y) expect to earn high pay after college graduation, but is this realistic? According to an article by CNN.com, those in Generation Y want "better pay, a flexible work schedule and company-provided [technology]." In fact, an overwhelming majority of hiring managers and HR professionals describe these people as exhibiting "a sense of entitlement that older generations don't."

What type of salary can those of us in Generation Y expect and what is considered a lot of money? Here at PayScale, we are obsessed with accurate salary data and can use our database of over 21 million profiles to answer this question.

In this blog I will look at some interesting salary facts according to several different characteristics: school, major, gender, job titles, and location.

Are you a recent college graduate and wondering whether you are earning top dollar? Use the PayScale Salary Survey to find out.

School and Major: What Pay is typical for Generation Y?

The pay reported in this report is defined as annual cash earnings, from hourly wages or salary, combined with bonuses, commissions, and other cash earnings. Earnings from equity (stock grants and stock options) are not included.

According to our education report, those who choose to major in engineering, computer science, and economics earn top dollar after about 2-3 years of experience, with a median salary of at least $55,000. In their mid-careers, those with these majors often earn a six-figure median pay.

Unsurprisingly, graduates from top-tier ivy leagues can expect to earn a higher starting salary. Graduates from these schools with 2-3 years of experience typically earn just under $60,000.

Generation Y: Typical Starting Pay of Men vs. Women

The starting median pay across all careers and majors in 2010 for a recent graduate in Gen Y was $40,000 for men and $33,200 for women.

This PayScale data set includes bachelor’s degree graduates 20 to 32 years old in 2010 (the U.S. Census defines Generation Y as those born between 1977 and 1994), who have been working for <2 years in their field.

These figures represent the “typical” pay for the two genders in Generation Y, but what about the extremes? How low is low pay and how high is high pay? The answer is given by the 10th and 90th percentiles. The 10th percentile is a benchmark for low earners–90% of the workers will earn more, while only 10% will earn less. On the other hand, the 90th percentile represents the high earners as only 10% of workers can expect to earn more.

The 10th and 90 percentiles for male college graduates are $24,000 and $61,500 respectively, while the 10th and 90th percentiles for female college graduates are $21,100 and $52,900 respectively. As you can see, women from Generation Y still suffer from a similar fate as women from earlier generations: they often earn less than their male counterparts, which in large part is attributed to the likelihood of women choosing to work in lower paid fields (e.g. Education and Social Work).

Gen Y Men vs. Women and College Majors

Unlike the overall figures given above, the differences between male and female college graduates from Generation Y are not as clear-cut when we look at specific majors. In fact, women who major in engineering have a higher median pay then men in the same major. The following table gives the starting median pay across gender for 10 common majors.

The female top earners (90th percentile) in the above majors can earn between $42,700 (Psychology) and $72,600 (Computer Science). The male top earners can earn between $48,800 (Psychology) and $70,000 (Computer Science). Although female pay is typically below male pay, women can see a wider range in pay than men.

Salary for Common Gen Y Jobs

The following table gives the starting median pay and the starting top earner (90th percentile) pay for 10 common jobs:

Similar to college majors, those in IT and engineering often earn higher median starting salaries than other careers. The starting median salaries of these careers are even higher than the top earners in the fields of Accounting, Sales, Teaching, and Marketing. Consequently, if high pay is your goal, follow the golden path of technology and engineering.

Finally, Location Matters

Earnings are tied to location, partially due to the cost of living in an area. For example, an Accountant in New York City can expect a higher median starting salary ($45,800) than one in Albuquerque, New Mexico ($37,900).

If you are interested in how your salary must change to compensate for a move to a new city, visit PayScale’s Cost of Living Calculator.

$50,000/Year is a Lot of Money

With the exception of engineers and those in IT, recent Generation Y graduates simply should not expect pay in excess of $50,000 per year.

This goes against the current expectations for some, but a starting pay greater than $50,000 could be considered a high starting salary, depending upon the job.

These data are updated for 2010, after the white collar economy really hit the skids. Generation Y graduates still need to push their sense of entitlement and desire for high pay aside, especially during these tough economic times. As the unemployment rate continues to rise, Generation Y-ers will need to cut salary expectations if they hope to procure a job, particularly as the majority of others in the job market are doing so willingly.

What type of pay can you expect with your education? Be prepared with accurate salary expectations in your next job interview or review. For powerful salary data and comparisons customized for your exact position, job offer, and degree, be sure to build a complete profile by taking PayScale’s Full Salary Survey.

Regards,

Katie Bardaro
Research Analyst, PayScale, Inc.