Why We Get Generations Wrong & Why It Matters?

1936 likely seemed an unremarkable year as such things went.

The Depression had been going on for six years, and though things had begun to tick back up a bit, it still seemed a long way from what life had been like in the roaring Twenties. Yet that year would, decades later, be the birth year (literally) of rock music. Buddy Holly was born that year. So was Elvis Presley. Roy Orbison also shared that birth year, John Lennon, Mary Travers (of Peter Paul and Mary fame), Grace Slick, Jerry Lee Lewis. Between 1936 and 1945, the icons that would define Rock and Roll were concentrated in a little slice of time that in retrospect seemed astonishing, since there are few periods of music that were so clearly delineated.

Something else would happen in 1936 that was likely not coincidental. After several brutal years, the economy had turned around, and even with war looming on the horizon, the birthrate in the United States and much of Western Europe all started ticking upward at the same time, even though it had been declining pretty steadily since almost 1918. Birthrate, the number of child women of childbearing age have in any given year, or family size, the number of children a given couple have, varies, but for the most part, these tend to go up or down very steadily except at inflection points that happen roughly every eighteen years.

William Strauss and Neil Howe published their first book, Generations, in 1991, launching an entire industry of Generation enthusiasts. Their contention was that there was a natural cycle lasting about 36 years that could, in turn, be broken into two generations of roughly eighteen years apiece that they dubbed generations, one waxing, one waning. The idea goes back well before the two, of course, but they were the first to truly popularize the idea.

The cycle that they called out (and spent much of the rest of their careers building upon) was not all that stable, however, and it is actually fairly arguable about whether the cycles themselves were truly cyclical. What's worse is that the cyclical nature seemed to break down pretty dramatically after about 1971, though that was not obvious until several decades later. Strauss and Howe also used a way of measuring the cycle, from mid-point to mid-point, that was consistent with normal sociological principles, but that may not have been applicable here as they contented.

Instead, what has become increasingly obvious is that a generation is defined largely at its end-points, usually when the birthrate or family size starts rising or starts falling, and it's the second derivative - the point at which the change of the birth rate flips polarity - that is the real driver. There are usually a number of drivers, though the one that may play a major factor is the level of aggregate income inequality in the US.

Income inequality is a surprisingly difficult statistic to measure, as it is not so much a single number but a skew of a distribution. The wealthiest 1%, or 0.1%, by definition, have far more money and hence purchasing power than the poorest, but income inequality often looks like a spring - bunched up on one end, but periodically it oscillates just a little so that more of the spring moves towards or away from the median value.

What's notable is that starting in 1936, the distribution started flattening, due to several factors. One of them was tax rates that were pushed up to 90% on the wealthiest individuals. This basically pushed more wealth into the hands of the poor and middle classes, and likely gave many of them the means to move from agrarian to suburban living patterns as more money became available for a larger percentage of people to start their own businesses. This held out until the mid-1950s, when tax rates started to fall for the wealthiest, and would hold out until the 1970s, when the economy fell into a period of stagflation that ultimately ended up with Paul Volcker raising interest rates to 10% in the early 1980s. What's most notable is that while the birthrate bottomed out in the 1970s, and has remained more or less stagnant ever since until 2008, when it took a sharp turn relative to where it's been since about 1972 or so.

(It's also worth noting that prior to 1936, the share of income inequality had been rising fairly dramatically to its highest point since the start of the century, starting shortly after World War I).

This puts inflection points roughly 1918, 1936, 1954, 1972, 1990 and 2008. The period 1972 to 1990 saw a rise in birth rate, but from a family size of about 1.6 to a family size of 2.1 (contrast this with 1954, where there were 4.2 children per family). These figures are ex-immigration, which tend to have different cycles. The cycle starting in 2008 was an anomaly, not in its timing, but in that the cycle of 1990 to 2008 was slightly negative, while 2008 is considerably more pronounced (and represents the first deviation in the cyclic pattern in one hundred and sixty years). Significantly, income inequality worsened dramatically after 2008. It is now in excess of where it was in the mid-1930s, and it is not surprising that the current generation is shrinking when it should, by all reasonable measures, be growing.

The years indicated above are eighteen years apart and represent birthrate inflections. Between 1954 and 1956, Steve Jobs, Larry Ellison, Bill Gates, Bill Joy, Scott McNealy and several other future tech-founders were born. For some reason, filmmakers tended to cluster around 1945, though Jim Henson was a contemporary of Steve Jobs. What's perhaps more telling is that if you shift your reckoning of generations to the endpoints - the inflection points - then you find that political values tend to align far more closely with the latter half of the S&H generation than they do with people in the latter half of their own S&H cohort.

Those born between 1936 and 1954 tended to vote much more towards Trump in 2016, while those born after 1954 to 1972 tended to vote for Clinton (and those born after 1990 were much more attracted to Sanders). The distinction is considerably muddier with S&H generations. Similarly, those of us born in the late 1950s and 1960s identify far more closely with "GenX" values. I was six years old when Sesame Street debuted, and those older than me probably watched it because their kid brothers and sisters watched it. Similarly, very few people born after 1954 attended Woodstock - we were FAR too young.

Before getting into the "Why is this important?" question, it's worth making a change of nomenclature. If you use 1900 as a baseline and call children born after that but before 1918, Generation Alpha, then you have a consistent convention that works to the present day.

The amorphous late Boomers / Gen X generation becomes Gen Delta, the Punk Generation - I almost called them the Disco generation, but that would be cruel. Millennials Gen Echo (or, musicologically, the Hip Hop Generation), and more importantly, it becomes obvious that they were born during the buildout of the Internet and become instrumental in creating the World Wide Web and the Mobile Web. I've used musical genres here because it indicates what the oldest were producing and the younger ones were listening to. (Buddy Holly released "Peggy Sue", his first hit, in 1957, while Elvis Presley's first commercial single ("That's All Right") was in 1954.

So, with a new nomenclature in place, the question of "why does it matter?" can be addressed. Generational buckets are important, but only in so far as they have meaning. We talk about Millennials as if they were one homogenous group that now stretches over more than forty years, and have only just started recognizing Gen Z and think of them as kids, because the boundaries have become very blurred. Yet most of the major milestones that have shaped our culture are fairly clear cut: it's perhaps not surprising that 1969 saw the culmination of both the rock revolution and the space program. It was also the year that Sesame Street, Mister Rogers Neighborhood and the first truly shared color TV experiences occurred, at least in the US. The first personal computer would debut just a couple of years later. Overcrowded classrooms gave way to a period where schools were being shuttered due to overcapacity.

As has been pointed out, there's a political homogeneity in Gen Charlie that's missing in Gen W (Boomers). The Rock Generation is, as of 1919, officially retired - the youngest is now 65. They grew up in a period where society was very accommodative, where there were more jobs than people and social mobility was high. The Punk generation (Gen Delta) grew up competing for those jobs that Rockers tenaciously clung to, where their influence was waning, and where economic opportunities were far less available. Rock was a celebration, Punk was a protest.

The Rock generation went on to become more conservative than progressive, far more ideological, while the Punk generation tipped slightly more in the other direction but are more pragmatic about it. Barack Obama, born in 1961, was the quintessential Punk-era Gen Delta politician: competent, introverted, pragmatic, concerned with mechanics rather than ideology. Trump, born in 1946, is the embodiment of the Rocker Gen Charlie mentality - self-focused, extroverted, money-oriented. Gen Echo, born in 1972, had their formative political years during the Clinton administration, and overall have settled on a kind of techno-libertarianism, socially progressive, financially moderate to conservative. Gen Foxtrot, with the oldest now in their late twenties, are an interesting mix - they are the most unchurched of the generations by a wide margin, are very egalitarian, but they are also very distrustful of both big government and big business.

You can also more clearly see social movements within the different generational divides. The #MeToo movement was strongest in the Gen Echo generation, an echo of the Gen Charlie feminist movement, while there is no question that climate activism is very much a defining characteristic of the Techno-Generation (Gen Foxtrot) (and "Ok, Boomer is a strong repudiation of the Rock Generation by their grandchildren). On the other hand, the same tendency towards idealism (and its counterpart, ideology) can be seen in GenF as in GenC, which supports one theory that Strauss and Howe put forth that values tend to echo every other generation, along with my own theory that a generation's tendency towards extroversion vs. introversion is largely a function of whether they generation was growing or shrinking in percentage terms.

That last point is actually an important one, and one where I think S&H fell down. Generational deltas are not fully cyclical. Growth rates are affected by big macro-trends, and every so often you'll have two succeeding generations that each have a net rise or drop (none in the 20th century, but Generation Golf looks like it may the first of the 21st century). This means that generation theory's value as a predictive tool long term (across centuries) is arguable.

However, at the same time, understanding the correlation between birth rate and cultural attitude may actually be more valuable. In absolute terms, Generation Echo was larger (by about five million people) than Generation Charlie. However, relative to the population mix at the time, Generation Charlie (the Rock Generation) made up almost 40% of the generational mix, compared to about 28% for Generation Echo (the Hip Hop Generation), at the end of their respective periods, while Gen Delta (Punk) accounted for only 21% of its mix.

The Rock and Roll generation (Gen C) is now completely retired if you use 65 as the official age of retirement. In practice, the boundaries are a bit fuzzy, with many of that generation choosing to go into lower-paying jobs in order to build up their retirement funds. By the age of seventy, however, physical impairments begin to take their toll, and this means that from 1920 to 1925, there will be a significant drop-off of the number of Gen C people in the workforce from where it is today, even as the oldest members of Gen Delta begin their retirement procession.

This shrinking workforce will be a factor for the next twenty-five to thirty years, and it will hit existing larger companies that were founded or significantly expanded after World War II the hardest. The reason for this is simple - most of the institutional knowledge of organizations is held by its most senior members.

Between retiring workers with a shrinking workforce in the wings forcing companies to reduce their senior technical and management ranks and the trend towards outsourcing that significantly decimated the middle management ranks with outsourced workers who were unlikely to enter into senior management, this trend is eliminating a lot of the knowledge about how things work or even where things are.

It is also creating a gulf between the senior management and younger workers who never received the mentoring (active or passive) that helped many of these organizations stay cohesive and build up loyalty. It also means that the incoming (Gen Delta) senior management generally are about a generation behind what is the latest technological innovations that the Echo and Foxtrot generations have grown up with, meaning that they have fewer (and poorer) tools for evaluating whether something that may be cool to a programmer is necessarily a better technology for a company's objectives.

Furthermore, it means that younger workers simply don't want to work for established companies, regardless of the pay. The cultures are simply too different, and the potential for friction too high. Younger workers, in general, have become used to working independently, often remotely, and often tied into virtual networks with their peers rather than physical networks. Most are relatively tech and media savvy, compared to their elders, and they don't have the one company for life attitude that characterized their grandparents or even great grandparents. As most Gen Foxtrot workers are likely to start out working for companies that are in many cases younger than they are, this makes transitioning to more mature companies a bigger leap than most are willing to take, especially since those companies have often frozen pay rates at junior levels to well below the industry average.

Ultimately, this means that the power of labor to dictate wages, which has been in decline since the 1970s, is starting to ticking back up (barring recessions) given the tightening labor markets. As a larger preponderance of labor is involved in the creation of intellectual property, this also means that the next quarter-century will also be one where investors will have to put more money into labor than any other sector of business, generally with smaller returns. Since virtual companies also have relatively low capital costs, this will also significantly eat into investment dividends and consequently the power of the investor to dictate terms favorable to them.

Addendum

This article has been on the drawing board for a while. and since I last worked on it, Covid-19 has reared it's ugly globular head while the world is now engulfed in one of the worst recessions since the Great Depression. I think, if anything, generational thinking may have a huge impact on what comes next.

Before getting that, however, it's worth bringing up a point I wasn't able to weave into the article previously. As with a lot of trends in sociology, certain theories that seemed intriguing at first blush show themselves to be fundamentally flawed. One of these, I've come to believe, is the myth of the Great Turnings.

Strauss and Howe built up, as part of their Generations hypothesis, the idea that generations were fundamentally cyclical, and that there was a pattern that became evident over a long enough time cycle in which every four generations (what was called a saecular century in their books) you'd see fundamental repetitions of behavior. The thesis for this was that over the course of eighty years, give or take, people forgot the lessons of the last saeculum. By all rights, according to this hypothesis, we should be in the middle of a radical new awakening. as the economy collapses and new institutions take their place.

This is where demographic observations move into the realm of pseudoscience (and politics), made worse by the adoption of this meme by social groups who see themselves as the agents of such change. There is no evidence for such patterns, beyond the upheavals that seem to occur pretty much at random throughout modern human history. While I believe there is some validity in the notion of generational cohorts (hence this article), there's real danger in reading demographic data and from that constructing a grand master plan for the evolution (or arguably devolution) of society.

The other point that is worth making is that the overall effects of of generations represent very subtle tendencies - something that may tend to sway a person politically or socially by a few percentage points - and there are significant variations even within that given populace. You can argue, for instance, that those born in Generation Echo (what I see as the actual Millennials) and those born in Generation Foxtrot (essentally Gen Z) are fairly similar because the variation in birth rates were fairly similar, and because both generations came of age during the Internet's rise, though Echo may be more predisposed towards using laptops while Foxtrot is definitionly more tilted towards using mobile phones as their primary mode for interation.

On the other hand, I suspect that Covid-19 and the 2020 George Floyd protests will end up leaving an impact on each generation in different ways. The Coronavirus is likely to wipe out the Big Band Generation (those born before 1936) within the next 5-8 years, and has most likely put paid the notion of the every youthful Rock generation. For those in the youngest generations, it will mark a period where most of the institutions that govern our lives will have gone virtual, for better or worse. They will adapt, the young always do, but it is these experiences that they will take with them moving forward.

Ultimately, I think the idea of consistent, meaningful generations need to be addressed, partially because it makes it easier to compare apples to apples if there are consistent, demonstrable definitions, makes marketing somewhat easier because it more accurately clarifies what generational buckets are, and perhaps demystifies much of the rhetoric around Turnings that seem to have become stock and trade of extremist groups worldwide.