The Generational Parade: The Greatest Generation to the Millennials



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♫ Doo doo-doo doo doo ♫

 

That’s, of course, the sound a parade makes, and this week we spent time discussing the Generational Parade. If you’re not familiar with the Generational Parade, you should be: It not only affects every aspect of your life, but you’re marching in it right now. We all are. Normally, I march somewhere near the middle, but today I’ve got my tasseled hat and marching baton, and I’m leading this parade. That’s me: Grand Marshal Garvens. There is a lot to cover, so sit back, settle in, and enjoy the procession.

At the head of the parade marches the Greatest Generation—those born between 1901 and 1924. They were raised during the Great Depression and went on to fight in World War II. Today there are only between 5-8 million members of this generation left, and we lose about 8,000 of them each day.

Immediately behind the Greatest Generation is a smaller generation: the Silent Generation. The uncertainty and insecurity resulting from World War I and the Great Depression caused families to have fewer children. Their impact and influence of America’s culture and economy is minor. They are, seemingly, mere placeholders for the most important generation of the modern world: the Baby Boomers.

The Boomers were, until the Millennials, the largest generation this country had seen. The vast numbers of their parents, the Greatest Generation, and the sense of security brought by the conclusion of World War II, propelled this generation’s numbers up to 76 million. Their entry into the workforce in the mid-1980s, and their subsequent exit beginning in 2006, is the macro-economic reason for the Reagan and Clinton booms and today’s general economic lethargy.

Have you noticed a pattern? Generations alternate between large and small. Once a section of the Generational Parade gets going, its numbers cannot change, and the entire parade cannot stop. The factors shaping today’s economy were, in fact, set in motion decades ago. Today’s economy—its labor force, its supply, its demand—is shaped by the needs, wants, and purchasing power of its population, and its population is composed simply of its generations in aggregate.

The largest generation active in today’s economy, the Baby Boomers, have reached the peak of their earning and productive power and are starting to diminish. Those succeeding the Baby Boomers, Generation X, do not have the numbers necessary to replace the Boomers. This is why we are, at present, in economic purgatory. Wages are stagnant, economic growth is anemic, and the housing market is taking years to recover. There simply are not enough workers and consumers to replace those who are exiting the labor force and reigning in their spending habits as they prepare for retirement.

Following the pattern of the last century, we can expect a marked economic recovery sometime around 2020. This is when members of the Millennial Generation will begin entering their most productive years (ages 40 through 60). Their vast numbers—over 80 million!—will not only sufficiently replace Generation X, but will exceed even the Boomers. This will spark the economic recovery that has remained elusive since 2008.

But 2020 is a long way off. When you’re watching a parade pass by, waiting for a particular section to reach you, it seems to just crawl. Although I anticipate an economic recovery in 2020, I urge everyone to get their financial houses in order now. This includes:

 

  • Eliminating your debt
  • Hoarding your cash:
  • Living with less
  • Working harder now

 

Over the coming months, I’ll be talking more about prudent financial planning. It will make a good antidote to the coming holiday season spending splurge and subsequent New Year’s hangover.

GARVENS GROUP OF CHURCHILL MORTGAGE PROVIDING COLORADO SPRINGS WITH HOME MORTGAGES, VA LOANS, CONVENTIONAL LOANS, AND FHA LOANS
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