Gen Z and millennials should be thanking boomers, not bashing them
Daniel Jurman for BI
Nostalgia might be one of the most powerful and enduring human emotions. Civilizations have always looked to a golden age in the past when times were better and people were nobler. Even the Romans, throughout their long period of dominance and empire, routinely criticized their current state as decadent and weak, longing for the strength of previous eras.
Americans in the 21st century aren't immune to the impulse to don rose-colored glasses — commentators on both the left and the right routinely pine for a return to an idealized postwar era of tranquility and abundance. But nowadays, the nostalgia comes with an added emotional layer: blame. For many American millennials and Gen Zers, the greed and economic failures of their parents and grandparents are the root cause of the various financial challenges they face. The supposition is that boomers had it easier: Homes could be had for a dime and a handshake, a single paycheck supported three kids with two cars and a white picket fence to boot, and you could work your way through college without going into debt. The boomers had it great, the argument goes, but then they went and screwed it all up.
That instinct is wrong. For one thing, baby boomers didn't have it easy: The America they grew up in was poorer, less educated, less healthy, and more unfair than the society we live in today. And for all the flak the older generation gets, the boomers have by and large left America a better place than how they found it.
This isn't to say that the boomers are handing young people a utopia. Plenty of challenges still need to be solved — from a housing shortage and high inequality to the dangers of the climate crisis and rising political instability — and many of them were partly caused by the boomers' decisions. But we won't be able to solve those problems by lying to ourselves about the past or the progress we've made over the past 70 years. It's time Gen Zers and millennials gave the boomers their due credit, even as they try to fix some of the messes they've made.
Things are better now
It's easy to be envious when viewing the midcentury Norman Rockwell paintings of the beautiful family sitting in their lovely home preparing to dig into a massive meal. But I have a secret to tell you: On a statistical basis, there's a good chance you're richer than them. That's because, despite the protestations from the commentariat, the simple fact is that the US is a vastly wealthier and more productive country than it used to be.
The most encompassing way to measure this is real gross domestic product per capita, which takes the entire economic output of the US — all the goods we make, from cars to houses to food, and all the services we buy from each other, from doctor visits to education — and divides it up by the number of people who live in the country. Importantly, the "real" part adjusts for inflation: We're looking at the actual quantity of goods and services bought and sold without being skewed by the upward drift of prices. In effect, it tells us that we make and do far more things than we did a half century ago. Since World War II, real GDP per capita has steadily and inexorably grown outside brief recessions. There are three times as many goods and services produced in the US available per person now as there were in the 1960s.
Of course, looking at GDP per capita doesn't necessarily show who's gaining from that rising tide. To better understand how individuals and families are experiencing the economy, it's important to look at wages, income, and wealth. These three measures can give us a better sense of how people's finances are doing.
First, there are wages, which measure people's paychecks and salaries from their jobs. Real average hourly wages for nonsupervisory and production workers — meaning frontline workers instead of managers or business owners — slid fairly dramatically from the '70s through the mid-'90s. But since that time, wages have steadily increased. Even with the recent bout of high inflation, the strong labor market has pushed wages for frontline workers higher than they've been since the '70s.
Next is household income — the total amount of money the typical family makes from everyone's jobs and businesses in a year. While recessions have led to fits and starts, the typical family is more affluent than 40 years ago. Median household income after adjusting for inflation in 2022 was 31% higher than in 1984, meaning families have more money to work with.
Finally, there's wealth, which tracks a family's assets, such as real estate, financial investments, and checking accounts minus their debt. Once again, families are better off by this measure than when the boomers were becoming dominant in the economy. Real household net worth fell dramatically after the 2008 financial crisis because of the collapse in home prices but steadily recovered over the next decade before skyrocketing between 2019 and 2022 as home values and stock prices surged and the country healed from the pandemic.
By most measures of financial health, the typical American is doing much better today than in the decades when the boomers were coming up. Of course, money isn't the only way to evaluate a life. But by many nonfinancial measures, Gen Zers and millennials have it better than their parents' generation.
Americans are living much longer than when the boomers were growing up. Despite a historic drop in life expectancy at birth in 2020 and 2021 as a result of the COVID-19 pandemic, the typical child born in 2022 is expected to live seven years longer than a child born in 1960.
Americans are also better educated than ever. The share of the adult population with at least four years of college has more than tripled since the '60s.
Opportunities have also expanded dramatically in the US since the boomers started their careers. A half century of civil-rights movements has created a still imperfect but far more egalitarian society. One of the factors in increasing household income has been the rise of two-income households as women have been able to take on work.
Even racial inequalities at work have declined over the past half century. Historically, the share of Black Americans with a job has been lower than that of white Americans, but that gap has narrowed since the Great Recession and was nearly closed as of 2023.
There have also been broad qualitative improvements across a plethora of goods and services available to the average American. Cars are safer and more fuel-efficient than they were a half century ago, entertainment options have exploded, and the rise of the internet means that we now all have access to the sum total of human knowledge in our pockets at all times.
Credit where credit is due
The simple fact is that America is a much more broadly wealthy society than it was in the middle of the 20th century. There are plenty of reasons we're better off nowadays, as a wide variety of technological, social, financial, and broad economic changes have happened under the boomers' watch.
One of the biggest reasons for America's growing prosperity is ongoing technological improvements — much of which was developed by the boomers. Developments in industrial automation and computers have greatly accelerated productivity, a measure of the amount of economic activity per worker. An accountant working in Excel can balance a company's books in seconds, while working it out on paper would take hours. These improvements let us produce more, meaning a much larger economic pie is available to be shared.
Another important boomer contribution to our prosperity is our largely stable and increasingly open world. While globalized trade has hurt certain sectors in the US, it's contributed to lower prices and more widely available goods. America has become a more egalitarian and open society after the civil-rights and feminist movements of the second half of the 20th century, which opened the doors to greater economic and social participation for traditionally excluded groups and created a vast pool of talent to add to that prosperity.
Everything isn't perfect, but it's better
This doesn't mean every Gen Zer and millennial needs to go up to the boomers in their life and bow down to their benevolence. The "Me" generation also left their progeny with plenty of problems. One of the most glaring issues is the growth of economic inequality: Despite gains in wages, much of the great wealth created by the boomers has flowed to the top. One way to define inequality is to look at how the share of the country's wealth held by those at the top compares with the middle class. Since roughly 1998, the top 1% has held more of the nation's wealth than the middle 40%.
Admittedly, there are some encouraging signs that the inequality trend could be reversing. Over the past three years, wage growth has been disproportionately concentrated among low-income workers, which could lead to a compression in income inequality.
Another area where the boomers have left the country worse off is housing. Boomers have consistently passed laws to make building housing harder, leaving the country with a structural housing deficit. The consequence? Soaring housing costs. A typical house cost a little under three times the typical family's income in the mid-'60s; after the recent post-pandemic run-up in housing prices, that figure was nearly five times family income in 2022.
Beyond the economy, the boomers have handed off other deep problems that the younger generations will have to solve. The climate crisis threatens to undermine our collective prosperity, COVID-19 has shown that a highly globalized world is susceptible to dangerous pandemics, and rising political polarization is challenging one of the core prerequisites of a wealthy, stable, and democratic society.
The world is a much different place from it was when the boomers were young. There are problems, yes, but for Americans, the country is largely a much-better place. The siren song of nostalgia reaches out to most generations in most times and places across history. Millennials and Zoomers would be wise to ignore it.
Andy Kiersz is a quantitative editor for Business Insider's economy team.
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