Who Took The Worst Of The Great Recession?

Have you ever thought of what generation took the worst of the Great Recession?  I guess first we have to agree on what generation people actually fit into!

The other day, 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.Should I stay or should I go?
  • 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?

14 thoughts on “Who Took The Worst Of The Great Recession?”

  1. Two comments about the Boomer Generation. They are not the Silent Generation. The Silent Generation were the Boomers parents. The second is that there are many Boomers still in the workplace. Article says boomers are as young as 52. Most people at 52 are still working and right through to at least 60. You are correct that many boomers lost their jobs (many through free trade and the loss of manufacturing) and never got back to work but that was because of the overall loss of jobs and refusal to hire older workers. These people are not necessarily in a good place financially. The Millennials are certainly in a very bad place and the gov’ts need to step up and help them. People think they are entitled but it’s the Gen Xers who are entitled and dismissed both the Boomers and the Millennials.

    • I understand the difference between the Boomer and Silent generations. I was noting that I didn’t include the Silent Generation in this analysis because they’ve largely exited the workforce, and that it seemed to me that most of the ‘damage’ was done to the three groups I mentioned.

      Thanks for the comments.

  2. I’m surprised to discover I’m also a Millennial by those dates, I thought I was Generation X but never looked for a confirmation on that.

    The Great Recession (it’s still weird to call it that) affected me personally but it was at a recoverable point in my career: early but not at the very beginning. It’s too complex, at this point, for me to venture an opinion which group had it worse, though. I don’t think I’ve got a good enough birds-eye view to assess.

  3. This is a really good piece. While arguments can be made for each, I believe Gen X took the biggest hit because many Gen Xers took two significant hits in a relatively short time. Job loss, furloughs, cuts to retirement plan matching, home value depreciation, home loss, etc…Gen Xers have absorbed a lot of “hits” and are sandwiched between 2 larger generations. Millennials will receive the benefit of Baby Boomers retiring and therefore, taking management jobs at just right age. Gen Xers have always had to play catch up. I think it’s clear that, up to this point, Gen Xers have faced the biggest burdens.

  4. Hmmmm…..I am a boomer and father to millennial offspring and have to point out the VAST difference between “early millennials and late millennials”….Just as an example their views on Social Security when they were studying in college….1st child came to the “realization” that SS is actually a form of socialism within our capitalist society and steps need to be taken to keep it secure. 2nd child came to the conclusion SS is a “Ponzi scheme” plain and simple. And went on to explain that the average person is paid back their contributions in the first 2 years or so. And it’s left to the next group of “investors”/workers to pay their benefits until they expire. 2nd child’s conclusion….this is unsustainable especially with folks living longer. BIG difference between two kids 11 years apart in age….

  5. This is a tough one to pick, but being the entitled millennial that I am, I’m inclined to vote for millennials. Although, seeing my parents (baby boomers) go through what they did, gave me greater opportunity because it inspired me to learn more about personal finance. So in the end, I’ll vote for baby boomers because they have less time to rebuild.

    I like how you recognized the difference in attitude between older and younger generations as being a feeling that likely occurs naturally across all generations. I remember in high school, our history teacher showed us this old (from the 1400s) piece of paper where a teacher talked about how wild and talkative his new class was. It made it feel like some things will always be true.

    • Yep, I think it’s just part of the process of growing older and seeing the world from different perspectives based on your experiences and current circumstance.

  6. I think millennials took it the worst, specifically people who graduated college around 2008 (like me).

    I personally made a ton of money because I was happened to be just getting into real estate investing right after the big crash (means I found great deals and made a ton of equity as the market was rising). So, this comment has nothing to do with me personally…

    But think about it from a compounding point of view. Money compounds, so something earned when you’re 20 is far more valuable than the same amount earned when you are 50.

    So when kids got out of college and there were no jobs, they lost a lot of time. They ‘solved’ this by going back to get more education (more debt) and got out of grad school to find out….the economy still stinks.

    So my generation earns less, has more debt, has higher unemployment, and started off in life much later than any previous generation. 40 years from now this will be the poorest generation.

    • It’ll be interesting for sure. I could see a transfer of wealth from inheritances as potentially being the thing that might level things off to some degree. I do think starting with GenX, particularly for those born in the mid-70s and later, and moving to the Millennials, we do face the very likely chance that we won’t be as rich or richer than our parents.

  7. Ha, well as a Millennial I’d say the Millennials had it the worst, just because studies show that losing opportunity (in terms of jobs, wages, building equity) hurts in the long term (compounding gains and all that). However, seeing what my parents went through during the recession (they’re Boomers), I almost think they had it pretty bad too… maybe worse, although at least they got good jobs and got a chance to build wealth, unlike us 😉

    Interesting debate topic – I like it!

  8. So…after I was laid off my job during the G.R., I ended up teaching adjunct by way of not having to set up a campsite under the Seventh Avenue Overpass. In community colleges you see adult students from all walks of life, and any recession really brings them in. Legions of people in their 30s, 40s, 50s, and even 60s come back trying to retool for new jobs.

    My guess would be that the people who suffered the most were working-class adults in late middle age. In this country, age discrimination is a very real thing. Many people in their 50s and 60s never got rehired in their fields, or even in comparably paying jobs. That certainly was true for me, and it seems to have been the case for large numbers of my students, some of whom still keep in touch.

    Many of these folks lost their investments or pensions, and some lost their homes. Quite a few had adult kids move back in with them. One woman who had been a federal agent for 20 or 25 years found herself homeless, couch-surfing with friends while she tried to build skills for a new job.

    The other set of people who, IMHO, suffer terribly in any recession is young men who have recently established themselves in a career and suddenly find themselves out of work. Young guys often don’t understand how difficult it will be to find a new job — they have no experience with past recessions, and they’re filled with unrealistic self-confidence. A lengthy period of unemployment can be psychologically devastating for a young man. I don’t think my son has ever recovered from the year of unemployment he experienced after he was laid off at the tail end of the dot-com bust.

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