It’s a group that is often overlooked. Bound between two much larger generations, Generation X’s persona is less distinctive than the baby boomers or the millennials, according to a recent Pew Study. But make no mistake, this cohort is very real and has had very real experiences in the last seven years.
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“As a consequence of the Great Recession, Generation X lost the most wealth of any group,” explains Diana Elliott, research manager for financial security and mobility at Pew Charitable Trusts. “We found that between 2007 and 2010, they lost 45% of their wealth -- and they already had the lowest amount of wealth prior to the recession. But their median net worth dropped from $75,000 to $42,000, so many have experienced economic shock.”
Ranging from the ages of 34-49, this group is smack in the middle innings of life, and Elliot explains that the downturn hitting during the prime earning years of their life may be, in part, to blame for their diminished wealth.
“To experience a recession at that time in a life course can be difficult. They are critical years in a career, and many were at the age to be first-time home buyers -- so many bought during the bubble, or were just about to purchase a home when the bubble burst.”
“To experience a recession at that time in a life course can be difficult,” says Elliott. “They are critical years in a career, and many were at the age to be first-time home buyers -- so many bought during the bubble, or were just about to purchase a home when the bubble burst.”
In a preliminary study, Elliott says she is finding that among Gen X’ers, only one-third have more wealth than their parents held at their age, even though most have higher incomes.
“Gen X’ers have about six times more debt than their predecessors,” she says. “There is just a lot more debt and it makes it hard to prepare for retirement.”
Paul Taylor, who conducted the recent study on Generation X: America’s neglected ‘middle child’ agrees that, in many ways, Generation X faces an uphill battle.
“This is a self-motivated group. They were the first generation where many of their parents were getting divorced, which many refer to as the ‘latchkey children’…. This group didn’t have the helicopter parents like the millennials,” explains Taylor. “And today, they have had to deal with many economic circumstances that makes them less optimistic than the baby boomers and the millennials….Taking care of their children, their aging parents, paying off their student debt, their children’s student debt. So, economically, they’re having a very stressful life.”
Still, Taylor points out, the overwhelming optimism that millennials have may be in part due to age. But, he says, only time will tell.
“Generation X is interesting because it’s the first generation where there is less social mobility. No longer are people thinking things will get better. There is less optimism, “ says Taylor.
There’s a good reason for that.
“In the last 15 years, growth has flatlined in the U.S.,” Taylor says. “From the 1940s to the 1970s, the standard of living kept increasing. But now people aren't sure whether or not they will do better than their parents.”
Elliott says it’s too early to say whether wealth loss is a new pattern among generations (baby boomers do have more debt than their parents). But that it’s certainly something to keep an eye on.
“When it comes to wealth building and income,” she says, “Generation X is a group to look at to start seeing the larger changes that are happening in the economy.”
As for a silver lining, Taylor says this savvy and skeptical group does not care what others think of them. He also says that older households are much better off in terms of retirement. “And over time,” he says. “They are getting help, with more people looking after grandkids and giving other resources… and ultimately, that wealth [from their parents] will filter down.”