The Saeculum Decoded
A Blog by Neil Howe
Jul 202012
 

Are Millennials the Screwed Generation?” asks Joel Kotkin in Newsweek.  A professor of urban studies and an astute observer of social trends, Kotkin answers his own question in the affirmative.

He describes a gauntlet of economic challenges facing today’s under-30 Americans that are, I think, pretty well known to readers of this blog.  Some of the adverse trends he cites are mostly of recent (post-2008) origin: High unemployment, falling real median personal and household income, falling median household net worth, a sharply rising share who are living with their parents, a falling share who own their own homes, and (symptomatically) a sharp decline in birthrates by younger moms.

Yet other trends prejudicial to youth, most of which he mentions, have been underway for much longer: a declining national saving rate; rising fiscal deficits; college tuitions rising faster than family incomes; a widening spread between the relative wealth and income of older versus young households; and the steady rise in the share of public spending that goes to the entitled old (pensions, health care)—versus a declining share that goes to future-oriented investment (infrastructure, research, education).

Sounds depressing, I know.  But the reason I emphasize how long many of these trends have been at work is to cast a bit of doubt on whether Millennials are really as screwed as all that.  Keep in mind that back in the early 1980s, many economists and policymakers commented on the “declining fortunes” of late-wave Boomers who came of age during the energy crises and stagflation.  At the time, experts thought that demographic size was the problem: Numbers-driven competition among young workers was depressing Boomer incomes.

Then came the early 1990s, when economists discovered that Gen-Xers–often, at that time, called “Busters”–were even more screwed than Boomers.  (Since there were relatively few of these Busters, the demographic explanation was quietly dropped.)  From the very beginning, a “reality bites” fatalism about diminished economic possibilities emerged as a cornerstone this generation’s very self-image.  Over the next twenty years, as first-wave Gen-Xers moved into their 30s and then their 40s, evidence of “living-standard decline” in their age brackets (despite two-income households and working around the clock) has steadily mounted.

So is there still a good case for calling Millennials yet more “screwed” than these two older generations?  I suppose one could argue that Millennials are uniquely penalized because the adverse trends cited above—savings decline, young-old divide, fiscal bias, etc.—are more advanced and pronounced today than when Xers or Boomers were young.  One could also point to the extreme severity of the recent recession’s impact on youth—for example, the highest unemployment rate over the most months for young adults than during any downturn since the Great Depression.  We know from abundant economic research, starting with Glen Elder’s great book (Children of the Great Depression) that extended unemployment early in life has an impact on future income that lasts long into a person’s career.

On the other hand, of course, one would have to note the even harsher impact of the Great Recession on Gen-Xers and late-wave Boomers (households today age 30 to 60), as I pointed out in my earlier blog post.  And who hurts most during a great famine—the guy who thinks he might someday have a home and kids, or they guy who actually has a home and kids?

One would also have to weigh in the balance certain collective advantages Millennials have enjoyed early in life that their elders did not.  These include arriving as newborns in an era when mothers were more likely to say their newborn was “wanted” and growing up in an era when parents and families (if not always government) spent more time with them, more money on them, spurred them to achieve, and protected them more from harm.  Today, as a result, Millennials have become a generation of youth who commit less crime, cooperate more with each other, take fewer personal risks, and get along much better with their parents.  They are also on track to have the highest educational attainment ever (following college completion rates that actually backtracked for late-wave Boomers and early-wave Gen-Xers).

What’s more, most Millennials already know that history favors them.  Interesting factoid: When asked if being a young person is harder today than it was when your parents were kids, a growing majority of young people since the late 1990s say no, it’s actually easier being a kid today—after decades of polls (in the ‘70s, ‘80s, and early ‘90s) that leaned the other way, with Boomers and Xers bemoaning, year after year, how much harder being a kid is for them.

Kotkin asserts that this generation still believes in a very conventional definition of life success—most aspiring to a stable career and to owning a home in the suburbs.  I agree.  The data I’ve seen point in the same direction.  My favorite recent survey on this topic is the 2011 MetLife Study of the American Dream, which shows that Millennials are significantly more likely than Xers or Boomers to say that a college degree, acquiring wealth, owning a home, and (yes!) even marriage is “essential” to realizing the American Dream.  Most Millennials have a fairly concrete idea of what they want in life, together with benchmarks for getting there, and thus far most surveys (admittedly, not the depressing Rutgers survey cited by Kotkin) indicate that they remain confident that they will someday get there.

But to me, the most persuasive argument for not regarding Millennials as America’s most “screwed” generation is simply this: They are still young.  Even if the economy continues to deteriorate, a steady recovery that gets underway by the early 2020s will still save the future for most of them.  At roughly age 20 to 40, in this case, most Millennials will still be able to launch successful careers in an expanding economy.  Moreover, they will be able to buy homes at record-low prices and buy stock portfolios at record-low P/E ratios.  Which means, by the time they fully occupy midlife in the late 2040s (at roughly age 45 to 65), they may be doing far better at that time, relative to other generations, than people that age are doing today.

So who really is the most screwed generation?  When it comes to aggregate economic security and upward mobility, I think the most screwed generation already know who they are: Generation X.  Consider the scenario described above.  More chaos followed by a steady recovery starting a decade from now would come too late for most Xers—who by then (their first-wavers hitting their early 60s and thinking about retirement) may be looking at senior benefits programs whose generosity has just been cut way back in the name of fiscal austerity and renewed economic growth.  Any Xer protest is likely to be weak and ineffectual.  Most Boomers will be grandfathered, and most of the public’s attention will be focused on saving America’s future for the Millennials.

As Bill and I forecast twenty years ago back in 13th-Gen (I’ve changed the “13ers” here to “Gen-Xers”):

Reaching midlife, the Gen-Xers’ economic fears will be confirmed: They will become the only generation born this century (the first since the Gilded) to suffer a one-generation backstep in living standards.  Compared to their own parents at the same age, the Xers’ poverty rate will be higher, their rate of homeownership lower, their pension and healthcare benefits skimpier.  They will not match the Boomers’ inflation-adjusted levels of disposable income or wealth, at the same age.  Gen-Xers will also experience a much wider distribution of income and wealth than today’s older generations, with startling proportions either falling into destitution or shooting from rags to riches…  Finding their youthful dreams broken on the shoals of market-place reality, Xers will internalize their disappointment.  Around the year 2020, accumulated “hard knocks” will give midlife Xers much of the same gritty determination about life that they gave the midlife Lost during the Great Depression or the Gilded during Reconstruction.

Twenty years later, I think this prediction still stands.  As I read back over it, the only adjustment I would make is to say “early-wave Boomers” where we wrote “Boomers.”  But now let me move on to something else about Xers—the fact that the economy will recover, in part, precisely because Generation X chooses not to insist on its rightful public entitlement in old age.  We wrote about that in 13th-Gen, as well:

Nor will Gen-Xers ever effectively organize or vote in their own self-interest.  Instead, they will take pride in what they don’t receive, in their lifelong talent for getting by on their own, and in their ability to divert government resources to help the young.  Policy experts who today worry about the cost of Social Security and Medicare past the year 2025 seldom reflect on the political self-image of those who will then be entering their late sixties.  Entitled “senior citizens”?  Hardly.  Like Lost Generation elders in 1964–who voted more for Goldwater than any younger generation even after he promised to slash their retirement benefits—old Xers will feel less deserving of public attention than richer and smarter young people who lack their fatalism about life.

Even back in 1993 we had the concepts of generational archetypes firmly in mind.  As readers of The Fourth Turning know, Gen-Xers belong to same (Nomad) archetype as the Lost Generation.  The location in history of both generations, which manifests so many obvious parallels early in life, will continue (I think) to track each other moving forward.  Who is getting hurt worst in the current age of stagnation and deleveraging?  Late-wave Boomers (born after 1950) to some extent, mostly by have their home and retirement assets values hit hard; Generation X most of all; and early-wave Millennials to some extent, mostly by delayed career starts.  Who got hit worst in the Great Depression?  Late-wave Missionaries (born after 1870) to some extent, mainly by losing their savings in failed banks in the early 1930s; the Lost Generation most of all; and early-wave G.I.s to some extent, mostly by having their careers put on hold until VE- and VJ-Day.  Same archetypes, same patterns.

Koktin points out that today’s hard times are pushing most Millennials in the developed world politically toward the left—that is, toward a greater commitment to national collective action by government.  We’ve witnessed this trend in every election globally since 2008—including of course the massive 2-to-1 margin by U.S. Millennials for Obama in 2008.  (In the fall of 2012, U.S. Millennials will almost certainly give another large margin for Obama, but it will be smaller than in 2008 and whether it will be enough to win the election is uncertain; this is an issue I will handle in a future post.)

These political trends also have interesting parallels in the last saeculum.  The Lost Generation, as we document in Generations and The Fourth Turning, leaned Republican and libertarian all its life.  The Lost hated President Wilson for the fiasco of World War I; voted heavily for Harding, Coolidge, and Hoover (though it turned against Hoover with the Bonus Army); comprised the most visible and colorful opponents of FDR; and voted GOP after WWII all the way to Goldwater.  The party valence turned sharply the other way, however, for cohorts born after 1900—those who missed WWI, who belonged (like John Steinbeck) to entirely different artistic circles than the likes of Hemingway and Fitzgerald, and who were disposed to mobilize around a new trust in community after the Crash of ‘29.

Although no one collected age-graded polling back in the 1930s, some historians estimate that a very large majority—perhaps 85 percent—of voters under age 35 voted for FDR and the Democratic Party in 1936.  It is widely agreed that this is the first election in which a clear majority of young African-Americans voted for the Democratic Party rather than the party of Abraham Lincoln.  Consulting our own American Leadership Database, we are able to confirm that 28 out of 32 (88 percent) of G.I. senators, representatives, and governors sent to Congress in 1936 were Democrats.  By 1940, 75 percent of incoming G.I.s were still Democrats.

Read the numbers, Republicans, and weep.  That is, unless your new Mormon, whiz-kid, C-suite candidate is able to project a stronger, more hands-on image of strong national leadership than Barack Obama—which may not be setting the bar too high.  Anything is possible.

One last point.  To most Millennials, the whole whiney victimization card (look at me, I’m screwed!) seems like such a stale trope of Boomers and Gen-Xers, that they instinctively recoil from it.  And right on cue, a bona fide Millennial offers a cocky and defiant reply to Kotkin in the Washington Post (“Generation Unscrewed”)—though in a sardonic (“It’s the End of the World as We Know It (and I Feel Fine)”) tone that may leave all generations mystified.

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