Boomers are killing us and we're helping them — but there's a way forward

Companies can't survive under the current system of generational transfer of wealth.

It is 3:21 a.m. and I’ve been up for more than an hour, lying in bed and trying to go back to sleep. I have failed. The overly sensitive motion detector light out back keeps clicking on a few times a minute. The crickets seem louder than usual tonight. But there’s something else keeping me up and making my mind walk in circles as I try to come up with ways to get more of it: money.

This is supposed to be the greatest economy in the world. The president says constantly that everything is going great thanks to him, and that Americans are better off now than they’ve ever been before. Do you feel that way? I don’t. I think about money constantly, obsessively turning off light switches and filing all purchases and expenses in giant spreadsheets that I think will one day provide salvation. Every time I get paid I turn that money around and pay all the bills, saving 40 percent for my quarterly estimated income tax payments just to be safe. I can’t help but note how little is left over to do all the things you’re supposed to have done by the time you’re my age, 35. I constantly try to find ways to save money so that I can do those things. I want to have three month’s salary sitting in my savings account, just in case something terrible happens. I want to invest in the stock market so my money can earn some passive income. I want to get married. I want to have kids.

I can’t imagine how I will do any of that under current circumstances, because the money just is not there. I make the average American annual income and I don’t have money for these things, because apparently the average isn’t enough anymore. 

If all that weren’t enough, we are now facing the very real possibility of an economic downturn, and all my worrying is likely to soon get worse. I guess I can take a little solace in knowing that I’m not the only one — as The Atlantic laid out a few weeks ago, the next recession is going to destroy people like me, Millennials. Apparently that’s because we never fully recovered from the last one.

Millennials got bodied in the downturn, have struggled in the recovery, and are now left more vulnerable than other, older age cohorts. As they pitch toward middle age, they are failing to make it to the middle class, and are likely to be the first generation in modern economic history to end up worse off than their parents. The next downturn might make sure of it, stalling their careers and sucking away their wages right as the Millennials enter their prime earning years.

“Prime earning years,” that’s apparently where I’m at right now. It doesn’t feel like that, and the health of the global economy is really all about how people feel. If you feel like things aren’t going great, you cut back on spending. This prompts less demand for goods and services, affecting how much money other people are making. They, in turn, also cut back. This cycle perpetuates itself until it prompts an economic downturn, recession or, god forbid, depression. 

What happened? How did the average become not enough?

For one, housing costs have gone way up, Annie Lowrey reports in that Atlantic piece. To make a decent wage — an average wage — you pretty much have no choice but to live in a city. That’s where you also can’t even think about being able to buy a house, so you rent. And you’re renting from Baby Boomers, who may very well be the last generation to be better off than their parents (making us the first generation not to, as Lowrey points out). “This represents a large generational transfer of wealth from the young to the old,” Lowrey writes. “Boomers own the houses and bar municipalities from building more of them, thus benefiting from rising prices and soaking up endless rent checks forked over by younger and poorer families.”

I can speak from personal experience on this: shortly before leaving Dallas, Sarah and I approached the property manager at our home — a 1941 bungalow built by a well-known architect in the city — and asked about his not-very-well-defined offer that we might be able to buy the place. It needed tons of work — replacing the original windows alone would have cost at least $5,000. Nothing had been updated in the home, either, since it was constructed. (We pressed the owners to finally, after nearly 80 years, to put insulation in the attic so our living room wouldn’t be 63 degrees in the coldest nights of the winter.) The county’s assessed value — some $260,000 — was far too high of a price for the work that needed done, and I made that point clear. The answer: the owners would want at least that. And why shouldn’t they? We were paying their mortgage every month on a house that I’m sure was fully-paid off. There’s that generation transfer of wealth Lowrey was talking about. 

In the two and a half years we lived there, we spent $48,000 on rent at our beloved Coombs. That’s $48,000 in straight cash that went to its owners, money that could have been paying off our first home.

***

Boomers run the show in this country. They own the houses and the land. They run the government and own the companies that employ us. Most of them are Republican, because this is still a center-right country. (I’ve often made the argument that it really isn’t and if most Americans took a hard look at Democratic economic proposals they’d see their personal financial interests would be best served voting for Democrats. But over the decades, the GOP has done an incredible job convincing these folks to vote against their own economic interests by ginning up fear about everything from immigrants and welfare recipients to unions and the results-producing War on Christmas. None of my financial woes makes me want to vote for Republicans, considering they’re the ones who insist that people who make twice, quadruple and 30 times what I make pay just seven percent more in income taxes than I do.) Even the Democrats, who are supposed to be the party of progress, have three Boomers atop their presidential field — Joe Biden is 76; Elizabeth Warren is 70; Bernie Sanders is 77.

While Boomers are doing their part to make us poor and miserable, we’re contributing to that downward spiral pretty well ourselves. Boomers kick our asses when it comes to showing up on Election Day, as Politico’s Timothy Noah notes in his recent piece. That’s surely the biggest reason why we have a “Gerontocracy,” as Noah calls it — we are governed by the old because the old actually go out and vote and because soon we will mostly be the old.

By 2030, every living Boomer will be elderly (that is, age 65 or older), and by 2035, the Census Bureau projects, the elderly will outnumber minors for the first time in U.S. history,” Noah writes.

We should probably start voting more, but I myself am bad at this because I’m sitting up at 4:08 a.m. writing this newsletter instead of researching my local, state and federal representatives to see who I’ll vote for in November. Younger Millennials — the future workforce — should especially get involved by working to figure out how to force employers to share more wealth, and voting for people who would support those efforts would certainly help. 

Hell, their potential Boomer bosses are already claiming to address this issue. Last month, when the Business Roundtable introduced a 95 Theses of sorts that said their companies would focus on objectives other than simply making their shareholders money, it was met with justified skepticism. But I believe them.

The reason they are shifting focus is not because they want to save the planet or necessarily provide better wages to their workers, but because an economy that is forever shifting wealth from young to old is not one that can sustain companies like those from the Business Roundtable and the S&P 500 on down to your neighborhood coffee shop.

If those companies want to exist far into the future — far past the death of the last wealthy Baby Boomer — they’re going to need Millennials not just to buy their products but to invest in their companies. We can’t do any of that if we’re all dead broke. 

All the photos on this post are mine, from our home on Coombs Creek in Dallas’ Oak Cliff. If you like this post or any of my previous writing, tell a friend. Eventually I’m going to turn the paywall on here and you’ll have to give me some of that money I’m awake at 4:28 a.m. thinking about. Mahalo.

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