Gen X losing to the Boomers
May 20, 2008
I’ve spent the last two days with a man named Bill from Kansas City - or, as he referred to it, “Toto Land.” Bill served 30 years with the U.S. Air Force before taking a position as a trainer for Skillpath seminars. Now he travels 200 days of the year, teaching courses on project management and leadership.
I liked Bill. He won me over when he said he’d read the Kansas City Daily Record, one of our sister publications. I learned a lot from him in just two days (in some cases, fighting an urge to roll my eyes at his antics - reminiscent of Chris Farley as a motivational speaker in the infamous SNL skit).
Yesterday Bill talked about the differences between the generations in the workplace - a topic that’s been on our minds on this blog and in our paper lately. Bill talked a lot about how companies are adjusting to fit the needs of Millennials. Naturally, I thought of him tonight when I read about a new study on Generation X in USA Today.
OK, so the study’s first finding isn’t that surprising, though still alarming: Gen Xers (ages 27-43) aren’t saving enough for retirement, largely due to consumer debt. In a recent Charles Schwab study of more than 2,000 Gen Xers, 45% said they had too much debt to think about saving.
No, here’s the reality check: The current standard of living that Gen Xers have achieved falls short of their parents’ standard at the same age. Yes, the median income for men in their 30s, once adjusted for inflation, is 12% lower than what their dads earned three decades ago.
From the story:
Why did income decline just as Gen Xers began their careers? A key reason is that pay had risen so steadily while many of them were children — thanks to women entering the workforce in greater numbers — that pressure for wage growth had declined by the time the Gen Xers began working.
….Gen Xers also had the unfortunate timing of becoming adults in a period when the share of income that Americans spend on what most people see as essential needs, such as a home, health insurance and cars, has soared. Elizabeth Warren, a Harvard law professor and expert on middle-class finances, has concluded that the soaring inflation-adjusted price of such necessities has negated the extra spending power that female workers provided.
Are you surprised? Or do you think the concerns about Gen X’s finances are overblown?
JACKIE SAUTER, Web Editor
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I would be interested in knowing what the amount of student loan debt is among Xers. Is that considered a “consumer debt” or is it accounted for elsewhere in the study?
As a Gen Xer myself, I went to school on a combination of scholarships and student loans. Upon graduation, I had a siginicant loan debt. I felt behind before even beginning my career, ultimately paying off loans (plus interest) that were about 1/2 the purchase price of my current, modest home. (And I paid off in less than 1/3 the time allow by the loan, so I reduced interest payments).
I know you’re just reporting on another study in defining GenXers as today’s 27-43 year-olds, but in generational theory, as articulated by Strauss and Howe, that’s inaccurate; the birth years are 1961-1981, making GenXers 27-47 in 2008.
There are a bazillion reasons why GenXers don’t follow the same cycles of financial success as other generations. And the book to read is Generations, by Strauss and Howe. But one thing I can point to is that GenXers (the Nomad archetype) are a generation of gamblers; they tend to believe that success has a lot to do with luck and timing; they gamble with high-stakes risks and - hence, are the most entrepreneurial of the four generations; they’re not afraid to fail because you can always pick up the pieces and go on; and they tend not to trust institutions and large structured organizations to provide safety and security. I don’t know a GenXer alive that expects government programs to take care of them in their elderhood. GenXers know how to survive.
It’s with Boomers where the problem lies. Only about of the Boomer population is properly prepared for their futures; and — were I to predict — there will be a big culture war in coming decades of how and where to spend public dollars on unhealthy and/or financially underprepared Boomer elders.
The Fourth Turning is another good book to read. Also by Strauss and Howe. Makes one feel like a psychic.