I was surprised the other day when my wife announced that she was a Millennial. I originally disputed her on this, but then I looked it up and it turns out that she is right. My error came in the fact that I had thought she was part of Generation Y. Then I found out that this generation really doesn’t exist anymore! Apparently, they’re now part of the Millennials.
The Active Generations In the Workforce
The first thing to do is identify the different generations. Surely, we’ve all heard about them by now but so we’re all on the same page, and for purposes of my discussion, I’m using the following:
- Baby Boomers – Born between 1946 and 1964, so anybody between the ages of 52 and 70.
- Generation X – Born between 1964 and 1982, so anybody between the ages of 34 and 52
- Millennials – Born between 1982 and TBD – so anybody younger than 34 but probably not older than 18
Now, a couple of notes. In relation to the Millennials, the end date is probably still up in the air. If history holds true where the generational gaps are roughly 18-20 years, then it will probably end up around 2000 before they cut off, but that’ll probably take a few years to shake out.
On the other end of the spectrum, there are of course people older than Baby Boomers, but quite honestly, you don’t hear much about them and they have largely (but not completely) exited the workforce. Of course that generation is called The Silent Generation, so perhaps they’re just living up to their name. *LOL*
The Perception Between Generations
As I was doing my digging, I started reading through various articles, blog posts, and commentaries that have outlined the differences between the generations. There are some common themes that I’m sure many are familiar with:
- People in younger generations tend to blame those in the older generations for the problems of the world
- People in the older generations often see those in the younger generations as entitled and lazy
I’ve always actually found these generalizations more humorous than anything else, because I’m going to bet that when the Boomers were the younger generation, the older generations at the time probably thought many of the same things, and conversely, I’ll bet that, as an example, when the Great Depression hit, there was plenty of blame assigned to the generation that was running the show by those younger.
In other words, the generational gap is not anything new. It’s just the way of the world.
So What About The Recession?
It got me thinking that the Great Recession is a few years in our rear view mirror (though you can certainly feel a lot of residual impact), and I started thinking about who might argue that they took it worse. I decided to jot down a few different impacts that we saw out of the recession, and came up with likely arguments that each group might use to show how they had it worse.
The Housing Market Collapse
- Baby Boomers – While many Boomers had built a lot of equity in their homes, as a group they had the biggest and most expensive homes, so the total amount of value lost when the bubble crashed was probably greater than with the other generations.
- Generation X – Many had come to the age where home ownership was new and had grown quite a bit in the recent year. They had less equity in their homes when the bubble burst, and were therefore the group most likely to go underwater or lose their homes.
- Millennials – As a whole, the group here was not largely invested in home ownership, so while the losses weren’t as substantial as with other groups, it probably scared many away from considering home ownership, and other factors that I’ll get into later have made it increasingly difficult to consider home ownership at ages where previous generations entered the market.
Stock Market Declines
- Baby Boomers. Many Boomer’s were at or near retirement age. While the safe strategy is to move further away from risky investments as you get close, the healthy markets had probably made it tempting to stay more invested. Losses were in greater volume. They also had a greater impact due to the fact that retirement savings were to be needed sooner.
- Generation X. Many in this generation who had started saving for retirement saw a lot of the savings wiped out. This came at a time where the savings should be counted on to build a foundation for further growth. Many Gen X’ers had to essentially start over and found themselves behind the curve that they were once in front of. In addition, Gen X is the first generation where the shift away from a defined pension plan can’t be counted on.
- Millennials. While savings weren’t as high, what little the Millennials had built was largely wiped out. Due to staggering student loan debt, many have not even been able to save for retirement. The great stock market recovery has largely passed many by who are in this generation.
Job Losses and Stagnant Wage Growth
- Baby Boomers. Those Boomers who were still working and did not make it through likely found it harder to find jobs. Senior level positions were often eliminated and not replaced. Even if Boomers were willing to take a step backward into a more lower paying job, they were often overlooked. Employers did not see them as staying long, so jobs largely dried up for this demographic.
- Generation X. The Boomers that did keep their jobs basically made sure to stay in them. That, coupled with the lack of new job creation, found many Gen X’ers stuck when they otherwise would have continued up the ladder. This produced stagnant wages for people in their 30s and 40s. These losses came at a time when expectations are that income grows significantly. Even once wages started rising again, there was no catching up, so years of stagnant wages continue to impact earnings.
- Millennials. Job losses meant that new jobs weren’t being created. New graduates who would normally enter the workforce found themselves unable to do so. Even when employers started hiring again, they were able to be more selective, and looked for people that already have experience. This makes finding the ‘first job’ that everybody needs a huge obstacle, even today.
So Who Took It Worst?
When you look at the areas above, it kind of boils down to three distinct themes between the generations:
- Baby Boomers lost a lot of what they already had
- Generation X lost a lot of what they were building toward
- Millennials lost the opportunity to get started
Honestly, I think that each generation will lean toward saying that they took it worst. That goes back to the whole generational gap premise that I noted above. This gap naturally creates expected bias. So, since I’m squarely in the middle of Generation X, I would likely put my vote in that group. However, when I remove my bias I can see the case that each would make. I know that this is much more complex than I’ve been able to lay out.
Readers, what generation do you think suffered the most negative effects?Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.