Right now they aren’t expecting much. In a recent Roper poll of 18- to 29-year-olds, only 21 percent rated their future ““very good’’ – the lowest tally since 1975. So it will come as a surprise that the long decline in young workers’ incomes may be over at last.
Gen X spans the birth years of 1965 to 1980 – a time when babies went out of style. They’re the smallest cohort since the Silent Generation of the 1950s, which has earned them the sobriquet ““baby bust.’’ They’re also our first age group ever to be fewer in number than the one before.
Luck should run the busters’ way, in the view of demographer Richard Easterlin, who teaches economics at the University of Southern California. Small generations typically do better than big ones, he says, as long as economies seek full employment. A jumbo cohort like the boomers has to struggle for advancement, due to the close competition for jobs. By contrast, small age groups have the pleasure of being pursued.
So far, the busters haven’t been much wooed but that’s partly because they came of age in an ar-duous time. Young people who entered the work force during the 1980-82 recessions got lower wages than those who entered in better years, says Janet Yellen, professor of business administration at the University of California, Berkeley, and the same was probably true in 1990-91. Furthermore, the first busters through the gate may benefit less from their group’s small size than those who are coming up today.
For this second wave of Xers, life looks brighter already. Consider these surprising findings by Diane Macunovich, an economics professor at Williams College:
Since the mid-1980s, the average earnings of male workers in their early 20s have risen compared with the earnings of the middle-aged. That reversed 15 years of decline. (Young women’s pay, although low, has zigzagged up since the Equal Pay Act was passed in 1963.)
Among men 20 to 22 who work full time, the proportion who marry has been on the rise since 1988. This reflects the relative rise in their incomes. They’re more open to taking on the expense of a marital home.
More babies have been born to young married couples, another clue that they feel they have some money to spare. And they’re slightly more able to manage on a single paycheck, probably because lower interest rates have made mortgages easier to carry. The portion of young married mothers in the work force fell to 51.7 percent last year, from 53.2 percent in 1988 – a clear change in trend.
But even though the small-generation theory has had a good start, demographics isn’t destiny. Rates of income growth are ultimately driven by fiscal and monetary policies, punctuated by the effects of trade, investment, legislation, recessions and war. Economist Gary Shilling, of A. Gary Shilling & Co. in Springfield, N.J., thinks that global wage competition will prevent the Xers from doing as well as the previous small cohort of the ’50s.
What’s more, this generation was born to pay. Part of the busters’ income gains will be taxed away to subsidize boomer retirees.
That certain cost helps explain the lowered expectations that make Xers talk like a new Depression generation. Ann Clurman at Yankelovich Partners finds them ““more cautious and conservative financially than any group of 20-year-olds we’ve seen in 23 years of looking.’’ They’re more apt to say that they’d take a boring job for good money than young people were five years ago, and more apt think about starting retirement accounts. Too many Xers have seen their parents, or friends’ parents, lose work, lose money or fall deeply into debt. Says Berea (Ky.) College graduate Stephanie Flanary, 21, ““I saw how much damage credit cards can do to families.’’ At the Wentworth (Mass.) Institute of Technology, a worried Kirk Mcalla, 22, cites the scary example of a teacher who’s there only because private industry laid him off.
Still, many of the younger busters harbor decidedly upbeat views. Wentworth student John Holley, 25, expects a good job because he’s had work experience and ““engineering technology is hot.’’ Christine Cof-fey, 21, at Oakton Community College in Des Plaines, Ill., feels lucky for having ““more opportunities than my mom.''
The perception that life has soured for the young makes it hard for some to credit the forces carrying them forward. But the Xers have a lot going:
In 1993, 47 percent of the 18- to 24-year-olds had at least some higher education, compared with around 31 percent in 1980. Also, high-school dropout rates are down. A better education correlates with stronger incomes and lower unemployment rates – a message not lost on Johnicon George, 25, a former high-school dropout who’s now enrolled in San Francisco’s City College. ““In the year 2000, a lot of African-Americans my age who grew up in the ghetto are going to be wiped out,’’ he says. ““You’re going to have to have a college degree.’’ Gary Shilling believes there’s a surplus of college graduates, so more will be offered lower-rung jobs. But the use of computers may be making those jobs more interesting and better paid.
““There’s a shift in demand toward more skilled workers,’’ says Labor Secretary Robert Reich, ““and because of the bust, employers have more incentive to train.’’ About 17 percent of all workers now get formal, on-the-job skills training, up from 11 percent 10 years ago. Anthony Carnevale, chairman of the National Commission for Employment Policy, sees a big demand for ““high-school plus’’ – a high-school diploma plus technical school or junior college. Computer literacy is key. Those who use computers on the job earn 10 to 15 percent more than those who don’t, reports Alan Krueger, professor of economics at Princeton.
Like their Depression-era grandparents, the busters are pricked by economic anxiety. Lisa Fricker, 28, a librarian for a New York State agency, first sought to teach in a junior college, then accepted work as a secretary while looking for a library job. ““It was anything they’d pay me for,’’ she says. ““Our age group is open to just about anything.''
Although layoffs continue, many employers are hiring again. And they want the young, not the middle-aged. For the first time since 1989, companies intend to recruit more college graduates than they did the year before, reports the Collegiate Employment Research Institute at Michigan State.
Thanks to falling mortgage costs, the rate of homeownership among people in their 20s turned up in 1993, after 13 years of decline.
As American business restructured, floors full of workers were vaporized. This wholesale slaughter, cruel as it was, raised the prospects and productivity of the lucky workers left behind. There’s also a surge in private investment, says S Jay Levy, chairman of the Jerome Levy Economics Institute at Bard College. Corporations are modernizing their equipment, adopting new technologies and improving their products and services. That typically starts a new cycle of prosperity.
So dismiss the fantasies written about Generation X, that have them hip-hopping in their ripped jeans from here to ob-livion. They’re Norman Rockwell as dreamed by Madonna: a mix of ’50s values and a ’90s knowledge of the world. Expunge ““grunge’’ from your vocabulary. They’ll be pushing prams and putting their money in the bank.
