Gen X Gets Short Changed
If "demography is destiny"--as economists who study population trends are fond of saying--then everything should be coming up roses for today's young workers.
Back in the 1970s and '80s, as successive waves of U.S. baby boomers entered adulthood, many experts attributed the boomers' job woes and relatively high unemployment to the large numbers of new workers crowding into labor markets. But experts also predicted things would get better for the succeeding "baby bust" generation. Indeed, BUSINESS WEEK opined in 1979 that this group was likely to "enjoy higher relative income and faster promotions because of sparser numbers."
Unfortunately for Gen-X, however, such predictions haven't proved accurate--at least, up to now. Indeed, according to two studies in a recent issue of the Monthly Labor Review, today's young adults are doing worse in economic terms than their boomer peers.
In the first study, Labor Dept. economist Kurt Schrammel notes that the number of U.S. workers age 25 to 34 fell by almost 1% each year from 1989 to 1996, after rising at an average 4% annual clip from 1970 to 1989. Yet he finds that this group's jobless rate of 5.2% in 1996 was essentially the same as it was in 1971 and 1989.
Furthermore, while real median weekly earnings of all workers declined between 1979 and 1996, they fell far more sharply (by 15%) among young adult workers--even though this group was made up of baby boomers in 1979 and of baby busters in the mid-1990s. And this pattern of deeper declines among younger workers compared with their elders was apparent among both men and women in every major occupational grouping.
In the second study, Labor Dept. economists Geoffrey Paulin and Brian Riordon assess how singles age 18 to 29 fared in the mid-1990s compared with their single counterparts in the early 1970s and mid-1980s. Over the entire period, they find that this group suffered a real average income drop of about 11%, with more than 80% of the decline occurring in the past decade.
Single Gen-Xers also seem to have fallen behind their boomer counterparts in a key measure of social welfare: the share of income they need to allocate to basic necessities. In particular, the study finds that they now spend more of their income on necessities, such as food at home, and less on luxury goods such as recreation and related expenditures.
In short, in spite of their smaller numbers, most of today's young adults seem to have a harder time making it in the workplace than their boomer parents did. Demography may influence destiny, but it is clearly only one of many complex economic factors that decide each generation's fate.