A Generational Perspective on Living Standards: Where We .../media/files/pdfs/community...

Neil Howe and Diana Elliott

April 2, 2015

Federal Reserve System Community Development Research Conference Washington, DC

A Generational Perspective on Living Standards:

Where We’ve Been andProspects for the Future

0

5,000

10,000

15,000

20,000

25,000

Men

tion

s p

er 1

010

Goo

gleb

ook

Sen

ten

ces

Year

Google Ngram Mentions of Phrase “Economic Progress”

Googlebooks Ngram Viewer (https://books.google.com/ngrams): 2015

1966Peak

Poll Finds Widespread Economic Anxiety

76% of Respondents in WSJ/NBC Poll Fear Their Children's Generation Will Have Fewer Opportunities—An All-Time High (Aug 5, 2014)

$20,000

$45,000

$70,000

$95,000

$120,000

Median Family Income to 2013

Alternative Measures of U.S. Standard of Living, 1947-2013, in Constant 2013 $*

* All series deflated to 2013 dollars with CPI-U-RSSources: SCF, Fed Bulletin (2013 and earlier years); CPS, Table F-11, Census (2015)

2013

Dol

lars

$15,000

$35,000

$55,000

$75,000

$95,000

15-24 25-34 35-44 45-54 55-64 65-74**

2013

dol

lars

Age of Family Householder

Real Median Family Income by Age Bracket,from 1885 to 1994 Birth Cohort*

* Families only, at exact date birth cohort coincides with age bracket; all series deflated to 2013 dollars with CPI-U-RS** Trended from values for all 65+ before 1987

Source: CPS, Table F-11, Census (2015)

1915-241975-84

1985-94

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

18 22 26 30 34 38 42 46 50 54 58 62 66 70 74 78

Early G.I. (1901-11)Late G.I. (1912-24)Early Silent (1925-34)Late Silent (1935-42)Early Boomer (1943-51)Late Boomer (1952-60)Early Gen-X (1961-70)Late Gen-X (1971-81)Millennial (1982-97)

Lifecycle Income for Half Generations,in Constant 2013 $*

* All series deflated to 2013 dollars with CPI-U-RSSource: IPUMS-CPS (1964-2014)

2013

Dol

lars

Age

60

80

100

120

140

18 22 26 30 34 38 42 46 50 54 58 62 66 70 74 78

Early G.I. (1901-11) Late G.I. (1912-24)Early Silent (1925-34) Late Silent (1935-42)Early Boomer (1943-51) Late Boomer (1952-60)Early Gen-X (1961-70) Late Gen-X (1971-81)Millennial (1982-97)

2013

Dol

lars

-N

orm

aliz

edto

100

Poi

nt S

cale

Age

Lifecycle Income for Half Generations,Normalized to 100 Point Scale, in Constant 2013 $*


$20,000

$45,000

$70,000

$95,000

$120,000

Median Family Income to 2013

Median Household Net Worth to 2013

Alternative Measures of U.S. Standard of Living, 1947-2013, in Constant 2013 $*

* All series deflated to 2013 dollars with CPI-U-RSSources: SCF, Fed Bulletin (2013 and earlier years); CPS, Table F-11, Census (2015)

2013

Dol

lars

$0 $50,000 $100,000 $150,000 $200,000 $250,000

2013

1995

1983

2013 Dollars

under age 34age 35-44age 45-54age 55-64age 65-74age 75+

Real Median Family Net Worth, by Age: 1983 to 2013*

* All series deflated to 2013 dollars with CPI-U-RSSource: Survey of Consumer Finances, Fed (2014 and earlier

)

Age 35-44Age 75 +

-$100,000

-$50,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

30-39 30-39 40-49 40-49 50-59 50-59 60-69 60-69 70-79 70-79

1989 2013 1989 2013 1989 2013 1989 2013 1989 2013

Average Net Worth and Composition of Assets and Liabilities of the Middle 60 Percent of the Wealth Distribution

by Select 10-Year Age Groupings: 1989 and 2013*20

13 D

olla

rs

housing assets

property assets (incl car)

financial assets

retirement assets

liquid assets

other assets

credit card debt

education debt

property debt (incl car)

housing debt

net worth

* All series deflated to 2013 dollars with CPI-U-RSSource: SCF (1989 and 2013)

Generation (Born) Childhood Era Coming-of-Age

G.I. (1901-1924) World War I Great DepressionRoaring 20s World War II

Silent (1925-1942) Great Depression Postwar HighWorld War II

Boom (1943-1960) Postwar High ConsciousnessRevolution

Gen X (1961-1981) Consciousness Culture WarsRevolution ’90s Boom

Millennial (1982- 2004?) Culture Wars Financial Crisis’90s Boom War on Terror

Recent American Generations

TODAY AGE 90 & OVER

SAMPLE MEMBERSJohn KennedyRonald ReaganWalt DisneyJudy GarlandJohn WayneWalter Cronkite60

80

100

120

140

18 22 26 30 34 38 42 46 50 54 58 62 66 70 74 78

2013

Dol

lars

-N

orm

aliz

edto

100

poi

nt s

cale

Age

Lifecycle Income for Early and Late G.I.s, Normalized to 100 Point Scale, in Constant 2013 $*


27% average difference

Late G.I.Early G.I.








TODAY AGE 72 TO 89

SAMPLE MEMBERSJohn McCainColin PowellNancy PelosiMartin Luther King, Jr.Elvis PresleySandra Day O’Connor

60

80

100

120

140

18 22 26 30 34 38 42 46 50 54 58 62 66 70 74 78

2013

Dol

lars

-N

orm

aliz

edto

100

poi

nt s

cale

Age

Lifecycle Income for Early and Late Silent, Normalized to 100 Point Scale, in Constant 2013 $*


Late Silent

Early Silent








TODAY AGE 54 TO 71

SAMPLE MEMBERSBill & Hillary ClintonGeorge & Laura BushMitt RomneyDonald TrumpOprah WinfreySteve Jobs

60

80

100

120

140

18 22 26 30 34 38 42 46 50 54 58 62 66 70 74 78

2013

Dol

lars

-N

orm

aliz

edto

100

poi

nt s

cale

Age

Lifecycle Income for Early and Late Boomers, Normalized to 100 Point Scale, in Constant 2013 $*


Late Boomer

Early Boomer

0.25

0.3

0.35

0.4

0.45

0.5

0.55

0.6

18 22 26 30 34 38 42 46 50 54 58 62 66 70 74 78

Early G.I. (1901-11)Late G.I. (1912-24)Early Silent (1925-34)Late Silent (1935-42)Early Boomer (1943-51)Late Boomer (1952-60)Early Gen-X (1961-70)Late Gen-X (1971-81)Millennial (1982-97)

Gini Coefficients for Half Generations, by Average Age

Age


Gini

Coe

ffici

ents








TODAY AGE 33 TO 53

SAMPLE MEMBERSBarack ObamaChris ChristieSheryl SandbergMichael JordanNicole KidmanKurt Cobain

60

80

100

120

140

18 22 26 30 34 38 42 46 50 54 58 62 66 70 74 78

2013

Dol

lars

-N

orm

aliz

edto

100

poi

nt s

cale

Age

Lifecycle Income for Early and Late Xers, Normalized to 100 Point Scale, in Constant 2013 $*


Late Xer

Early Xer

-24%

-55%

-40%

-33%

-18%

-3%

-60%

-40%

-20%

0%

Change in Real Median Household Net Worth,by Age: 2007 to 2010*

Source: SCF, Fed Bulletin (2007 and 2010)

UnderAge 35

Age35-44

Age45-54

Age55-64

Age65-74

Age75 +








TODAY AGE 10 TO 32

SAMPLE MEMBERSMark ZuckerbergLeBron JamesMiranda CosgroveMichelle WieLady GagaChristopher Paolini

60

80

100

120

140

18 22 26 30 34 38 42 46 50 54 58 62 66 70 74 78

2013

Dol

lars

-N

orm

aliz

edto

100

poi

nt s

cale

Age

Lifecycle Income for Millennials, Normalized to 100 Point Scale, in Constant 2013 $*


Millennials

A Generational Perspective:Some Concluding Remarks

The declining generational trend in median affluence is not a new development.

Inequality is on the rise—and this too started with late Boomers.

The relative affluence of today’s elderly is historically unprecedented.

Generation X (in our opinion) is currently in the greatest danger.

Millennials will be helped not just by their better macro timing, but also by a positive generational shift in their attitudes and behaviors.

The American Dream is re-imagined by each generation.

Neil Howe and Diana Elliott

April 2, 2015

Federal Reserve System Community Development Research Conference Washington, DC

A Generational Perspective on Living Standards:

Where We’ve Been andProspects for the Future

A Generational Perspective on Living Standards: Where We .../media/files/pdfs/community...

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