The Saeculum Decoded
A Blog by Neil Howe
Nov 012010
 

I have recently run into discussions where there is confusion about the date boundaries and sizes of generations. Even the word “generation” can sometimes be up for contention. On the definition of “generation,” I don’t get hot and bothered about it.  The etymological history of the word “generation” is sufficiently broad (having been applied to families, computers, eras, what have you), that people are pretty much free to call any arbitrary cohort group a “generation” if they feel like it.  Most of these definitions, however, are ad hoc.  Even the famous Census Bureau definition of Boomers (which they define as 1946-64) is ad hoc, determined entirely by an arbitrary uptick and then downtick along a broad fertility-rate swell.

Very few of these definitions pretend to adhere to general rules about how social generations arise in history—which is what Bill and I have worked hard to do.  If you would like a definition of a social generation that puts all generations on a level playing field, so to speak, and links generations in some reliable way to historical events and trends, you may like what we have to offer.  But if you don’t care for such a definition, you probably won’t bother.

Now, on how and whether America’s demographics is or is not linked to an “age of austerity.”  This is a question on which I have written a lot.

The demographic challenge facing America is not as severe as the challenge facing near all of the other developed countries (and even some of the developing countries, like China).  The reason is pretty simple: We have a higher fertility rate and we have a higher immigration rate.  Indeed, we are the *only* developed country experiencing  “replacement rate” fertility.  And we are the only developed country whose total population is projected to continue growing (albeit very slowly), and not turn negative, through to the end of the next century.  The U.S. fiscal situation is also helped by the fact that our pay-as-you-go cash pension system is smaller and less generous, relative to GDP, than those of other countries.  But this plus is more than offset by our super-expensive health-care entitlement edifice, which is much more expensive as a share of GDP than any other country’s and is growing faster as a share of GDP.  (I’m very disappointed by Obama’s missed opportunity here, btw.  Rather than fix this broken system, the administration put new fuel into it, made it larger, and then called it “reform.”  But I’m digressing.)

All that being said, it is not true that we don’t face the same adverse demographic trends that these other countries face.  We do, only to a somewhat lesser degree.  We also face it more suddenly than Europe or Japan because we experienced a larger-than-normal swing from a (relatively small) generation of new Silent (born 1925-1942) retirees to a (relatively large) generation of new Boomer retirees.  So whereas Europe and Japan have their “aging” spread out over many decades, the U.S. age wave is all compressed into the just the next two, the 2010s and the 2020s.  This aging will exert a severe multiplier on U.S. entitlement spending (again, Medicare and Medicaid especially) at the worst possible time—since we enter these decades already running vast deficits, with a weak economy, and with new strains on unrelated auxiliary benefit spending, like disability and unemployment.

If you’d like more detail on exactly how our fiscal projections compare to those of other countries, take a look at the presentation of results from our new CSIS study  for Prudential: http://gapindex.csis.org.  I think the numbers speak for themselves.  To read our Op-Ed on the GAP Index that appeared in a recent NYT, see http://www.nytimes.com/2010/10/14/opinion/14iht-edjackson.html.

Finally, on the issue of generational size.  I think I’ve said this before on the: The “baby bust” that America experienced during the most of the Generation X (born 1961-1981) birth years resulted in a sizable dip in the number of births—but this dip is hardly visible anymore when you look today at population by age bracket.  The reason: Immigration.  Gen X is by a sizable margin the largest generation of immigrants per capita of all of today’s living generations.

Take a look at the table (for 2009) I’m inserting below.  It’s shows pretty much the same number of Americans by age bracket until you get to the early wave Boomer (born 1943-1960).  Normally, in a society with more traditional fertility, the number per age bracket would decline sharply across the entire x axis.  So the fact that the line is level until about age 50 is itself a sign of an aging society.  You can also see, anomalously, a slight rise in the late 40s and early 50s, which is a lingering sign of the “boom”—still visible, despite the rising mortality in these brackets.  But clearly it is *not* true that the Xer cohorts today are dramatically smaller than the Boomer or Millennial (born 1982-200?) cohorts.

Chart of US Population by Age group
Chart of US Population by Age group

We’ve always thought that including the 1961-64 cohorts as part of Gen X *clarifies* the generational distinction. This is the group which has no peer connection to the youth rebellion crescendo of the sixties and early seventies. This is also the group that includes so many of the iconic leaders of Gen X (including the guy who gave it its name). Plus, per my reading of the surveys, the arrival of this cohort into each new age bracket—starting with their filling of colleges and the military in the early Reagan years–has coincided with a seismic recognition that something big was changing in that age bracket. I noticed it as a teaching assistant at grad school back in 1980s… we Boomer Teaching Assistants all talked about it. And this was years before I ever thought about writing about generations.

Needless to say, both our chapter on “The 13th Generations” in “Generations” (1991) and our book “13th GEN” (1993) were hugely influenced by this “dazed and confused” leading-edge cohort group, who were then in their late 20s… about where Millennials are today. Boomers, not. Imho.

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