Parents always want what is best for their children, and each generation strives to exceed the achievements of the one before. But experts say although Generation X had big dreams of having better jobs, higher incomes and leading finer lives than their parents, reality got in the way.
Facing job instability, economic turmoil, mass globalization and technological growth, and boomers that won’t leave the workforce, Gen X, which includes those aged 31 to 48, has had a tough path to forge.
In fact, this generation has been hit the hardest in the last decade and are having a hard time recovering, according to Neil Howe, economist, demographer and author.
“I think what we can say is that thus far for Gen X in most measures of income and wealth is that they are not doing any better [than their parents] as a whole,” he says. “They are probably doing a little worse than the last generation was at the same age.”
This generation grew up during a period of economic and political unrest, says Bruce Tulgan, founder and chairman of RainmakerThinking, Inc., and author of Not Everyone Gets A Trophy so they knew not to rely on society’s great institutions such as cities, schools and police to anchor success and security.
“This was the first generation with the discourse that, ‘no, things weren’t going that well,’” he says.
High Hopes, Tough Reality
Generation X not only wanted--but expected--to own more material items than their parents, says Jean Twenge, author of Generation Me: Why Today's Young Americans Are More Confident, Assertive, Entitled -- and More Miserable Than Ever Before. Her research finds a rise in the desire to own “much more” in material goods from the early 1990s to the 2000s, when Gen X was in high school.
“At least in high school, they were the most materialistic generation,” Twenge says. “In terms of wanting expensive things, they peaked; they were a group with big dreams in terms of material things. They had big expectations with money and status, but compared to boomers, there was a trend of not wanting to work as hard.”
Millennials, those ages 13 to 30, mimic this trend as well, she adds.
Many of those who bought homes at the peak of the housing bubble were in Gen X, and are still struggling to regain their home’s value.
“Boomers [ages 49-to-67 today] were selling houses [at this time] and Millennials were too young to buy a house,” Twenge says. “But Gen X were right in their 30s, when it’s typical to buy a home, and were hit hardest by foreclosures and loans in the last decade. This all points to high expectations, but perhaps a disappointing reality.”
Gen X in the Workforce
Boomers retiring later and staying in the workforce well into their 60s and 70s hasn’t helped Gen X advance in the workplace, Howe says.
“Gen X-ers got into the market before the crash and have seen how difficult it is to develop their careers as boomers are retiring later.” He says it has yet to be determined if the economy will recover quick enough to allow these workers to achieve their career goals and earn bigger paychecks.
This group was also burned in the workforce, says Robert Wendover, director of the Center for Generational Studies. Workers no longer stay at the same company for the duration of their career, hopping around to many different employers and industries which can hurt earnings potential and retirement savings.
“These X-ers are survivors,” Wendover says. “They are more resourceful, but skeptical of the promises made. They’re not all about the company anymore—if they get laid off, they can maintain their career and income, because they are resourceful.”
What Does This Mean for Their Children?
The essentials that younger generations need to survive and Gen X-ers need to pay for are just more expensive, Twenge says, pointing to health care and child care—both of which have become necessities in today’s world.
“Health-care costs have far outpaced inflation,” she says. “But you have to have it. All of these things make it more difficult to get by and get in the way of the dream of buying a house. Boomers, and the generations before them, were living on one income and were able to get by not paying for childcare because women often stayed home.”
Howe says the children of Gen X-ers have also been hard hit with the financial turmoil but they have more time to recover and will learn from their parents’ lessons.
“X-ers are less likely to be pushing their kids to exceed and are [more likely] to be keeping them on track for something achievable, with security and less risk-aversion. These kids are already shell-shocked and showing risk aversion as it is.”
What’s more, says Wendover, X-ers can’t decide if they should be saving for their own retirements or helping out their children.
“While all financial advisors will tell you to pay attention to your retirement rather than your kids, it’s a lot more cloudy than it used to be,” Wendover says. “You may pay for your kid’s college, but there is no guarantee of financial outcome. Gen X-er’s lives are considerably different than what they thought they would be 15 years ago.”