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By Sam Pizzigati / Inequality.org
To what extent does the generation we belong to determine the comfort of the lives we lead? Hardly anything has more influence on our comfort, a recent series of major analyses of media news shows, than our generation.
“Millennials struggled financially,” said Washington Post feature stated last month: “but Gen Z may have it even worse.”
Demographers typically define millennials as Americans born between 1980 and 1994. Generation Z includes the generation that emerged between 1995 and 2012.
The tens of millions of Americans in both generations, the standard analysis goes, enjoy very little of the good life enjoyed by America’s baby boomer generation, the happy 60- and 70-year-olds born just after World War II, between 1946 and 1964.
The New York Times For example, earlier this year, I interviewed a millennial from Michigan who works as a university archivist. She is still paying off her student loans, decades after graduating. Three years ago, the millennial bought a 10-year-old used car, a transaction that wiped out most of her savings. Many of her millennial colleagues, the archivist told the Timeare finally starting to buy a house and start a family, but “a lot of people in my generation have had to put all that on the back burner.”
Young people in Generation Z, the available data also makes clear, face even greater economic challenges. Gen Zers pay 31 percent more for housing than millennials, even after accounting for inflation, and 46 percent more for health insurance. Gen Z is, the Washington Post“the first generation where recent graduates are more likely to be unemployed than the general population.”
Amidst that general population, baby boomers are economically dominant. Boomers, a group that makes up just 20 percent of the U.S. population, now own 52 percent of the nation’s net worth. The baby boom generation, the Economist magazine, may turn out to be “the happiest generation in history.”
Analyses like this have created the fairly widespread impression that baby boomers have convincingly “won” what has been a generational war — at the expense of America’s younger generations. But this “generational war” framing distorts the reality in which Americans live more than it describes it. Millions of baby boomers in the United States today are not Economically doing well. Significant numbers of millennials and Gen Z’ers Are generate millions annually.
What is going on here? We are not suffering from a generational war. We are still living in a clash of economic classes.
The baby boomer generation happened to be lucky enough to arrive at one of those rare moments in history when the wealthiest people among us… not perform so well in that clash of classes. These boomers were born into a postwar America that average people — after years of struggle — had fundamentally transformed.
By the late 1940s, most workers in much of the United States had union cards. The contracts their unions negotiated made the country they called home the first industrial nation in the world where the majority of workers, after paying for the most basic necessities, actually kept a significant amount of money.
During those same mid-century years, the wealthy in America faced the highest federal income tax rates, hovering around 90 percent.
The tax code of those years certainly had loopholes that the wealthiest Americans could exploit. But these loopholes benefited a small segment of wealthy Americans, primarily the wealthy who owed their wealth to fossil fuels. In the first annual Forbes 400 list in 1982, nine of the richest fifteen Americans owed their fortunes to Big Oil.
The poorest deep pocket at first sight Forbes top 400 — Apple’s Armas Markkula Jr. — was sitting on a fortune of just $91 million in 1982, the equivalent of about $296 million today. At today’s Forbes 400, America’s poorest tycoon owns a fortune worth $6.9 billion, a fortune more than 23 times larger than his late 1982 fortune Forbes first top 400 of the modern era.
Business network CNBC has given the wealth gap a name inside the ranks of millennials “the new class war.” The “vast majority” of this generation, notes CNBC’s Robert Frank, are struggling with crippling student debt, low-paying service jobs and unaffordable housing. On average, millennials have 30 percent less wealth at age 35 than baby boomers did at the same age. But the wealthiest top 10 percent of millennials have an average of 20 percent more wealth than the top 10 percent of the baby boom generation.
The current concentration of millennial — and Gen Z — wealth is a natural fit for the purveyors of luxury watches, wines and classic cars, according to a new Bank of America study of millennial and Gen Z households with at least $3 million in investable assets. About 72 percent of deep-pocketed individuals aged 43 and younger, the study adds, consider themselves “skeptical” of investing primarily in traditional stocks and bonds. By 2030, a Bain & Co. report published earlier this year estimates that affluent millennials will account for 50 to 55 percent of luxury purchases, with Gen Zers accounting for another 25 to 30 percent.
All of this should remind us of a simple, basic truth. We cannot change the generation we are born into. We can change how the world we come into distributes income and wealth.
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