Which U.S. Generation Wields the Most Economic Power?
Introducing our new index, which ranks U.S. generations on their economic, political, and cultural influence.
Which U.S. Generation Wields the Most Economic Power?
In our inaugural Generational Power Index (GPI) 2021, we’ve ranked generations on how much power and influence they hold in American society.
And when it comes to money and economic power, our research has concluded that Baby Boomers, those between the ages of 57-75, have more influence than Millennials, Gen X, and Gen Z combined.
|Generation||Economic Power Share|
These findings may seem intuitive, but what exactly contributes to economic power? To find out, let’s take a closer look at the GPI’s underlying variables.
The Building Blocks of Economic Power
Our starting point was to define the age ranges of each generation:
|Generation||Age range (years)||Birth year range|
|The Silent Generation||76 and over||1928-1945|
|Gen Alpha||8 and below||2013-present|
Using these ranges as a framework, we then calculated our four underlying variables of economic power. Here’s what the distribution within each one looked like:
The earnings variable represents the median weekly earnings of full-time workers in the U.S., and was the most evenly distributed of the four variables. Gen Z had the lowest median weekly earnings ($614), while Gen X had the highest ($1,103).
Boomers established a clear lead in the second variable, net worth, which represents each generation’s share of overall U.S. wealth. As it turns out, Boomers hold 53% of all wealth in the country—more than all other generations combined.
The third variable captures each generation’s share of billionaire wealth, and was dominated by Boomers and the Silent Gen. We calculated this variable by starting with the top 1,000 billionaires globally, then filtering for Americans only.
The final variable, business leaders, is based on two underlying metrics: the generational share of both S&P 500 CEOs and small business owners. This enabled us to capture data from two sides of the business spectrum to see who holds power there.
Download the Generational Power Report (.pdf)
Shifting Dynamics in Economic Power
America’s wealth distribution is not stagnant, meaning the balance of economic power shifts with each passing year. Keeping this in mind, here are two of the most compelling trends that we discovered while analyzing data for the GPI report.
1. Younger Generations Show Sluggish Growth
The following chart illustrates each generation’s share of household wealth over time.
It makes sense that Baby Boomers would hold the most wealth of any generation. They have had more time to accumulate assets, and the population of Boomers is roughly three times higher than that of the Silent Generation.
What’s more interesting, however, is the stark difference in wealth trajectories between Boomers and younger generations.
While Boomers entered the workforce in a prosperous post-WWII era, Millennials and Gen Z have either started their careers in the aftermath of the 2008 Financial Crisis, or in the midst of the COVID-19 pandemic.
To put it in perspective, when Baby Boomers were as old as today’s Millennials in 1989, they held 21.3% of U.S. wealth. That’s more than four times higher than what Millennials hold now.
2. Small Business: The 99.9%
America’s small businesses may not have the same scale as global corporations like Apple or Amazon, but they are an incredibly important part of the U.S. economy.
In fact, small businesses make up 99.9% of all U.S. companies, and employ one-third of the nation’s workforce.
Here is who runs small businesses, from a generational perspective:
The 13% share held by Millennials may not sound too impressive, but it is one of the cohort’s strongest areas for economic power.
Looking forward, it seems entrepreneurship will grow into an area of strength for both Millennials and Gen Z, who are 188% more likely to want to create a side business compared to older generations.
Combine this with the fact that e-commerce adoption has been accelerating even faster than expected due to the pandemic, and it’s easy to see how younger, more tech-savvy generations could quickly expand their influence.
Ranked: Gen Z’s Favorite Brands, Compared with Older Generations
Which brands win the most with Gen Z compared to older generations? From TikTok to Capri Sun, this ranking looks at Gen Z’s favorite brands.
Gen Z’s Favorite Brands, Compared with Older Generations
Generation Z’s favorite brands, in absolute terms, aren’t wildly different from preferences of other generations, with Walmart, Google, and Netflix ranking high. But when it comes to the brands that do the best with Gen Z compared to their elders, the list shakes up dramatically.
This ranking uses consumer preference data from Morning Consult to show which brands are favored considerably more by Gen Z when compared to the general public. A brand’s rank is determined by the difference in favorability between Gen Z’s survey responses and the average of all U.S. adult respondents.
Note: Gen Z is the generation born between 1997-2012. Favorability in this ranking is measured using the share of a generation who said they have a “very” or “somewhat” favorable opinion of said brand.
Brands Preferred by Gen Z
Compared to Millennials, Gen X, and Boomers, who may not care as much for these 20 brands, Gen Z—currently between 9-25 years old—loves them. Let’s dive in:
|Rank||Brand||Favorability Difference||U.S. Adult Favorability||Gen Z Favorability|
Note: Differences may not add up exactly due to rounding.
Unsurprisingly, TikTok takes the top spot. The app that is frequently used to poke fun at older generations and that in many ways is a reflection of Gen Z culture, is 30 points more favorable with the young generation than others.
Members of Gen Z are the first true “digital natives”—meaning they were raised in the age of digital technology. As a result, many of their favorite brands are either some kind of social media platform and/or digital service, like Apple Pay, Snapchat, or Spotify. In fact, eight of Gen Z’s top 10 favorites on the above list are digital brands.
Another distinguishing feature of consumers in this generation is that they’re more likely to care about brand ethics and sustainable consumption than other generations.
However, one brand among their top 20 that defies that sentiment is the Chinese clothing company, Shein. This fast fashion company’s model promotes a culture of mass clothing hauls and thus, clothing waste—making it far from environmentally conscious. Shein has also come under fire recently for violating labor laws in its Chinese production facilities. And yet 44% of Gen Zs have a good impression of the brand, and it particularly does well with Gen Z women.
Interestingly, members of Gen Z in the U.S. are also the first cohort to have strong awareness of Chinese brands more generally.
Gen Z vs. Millennials
Two generations that are often lumped together, Gen Z and Millennials have some considerable differences when it comes to their favorite brands. Here’s a brief look at some of the brands that do better with Gen Z compared to Millennials specifically, using favorability difference:
- TikTok: 14.2
- Crocs: 13.4
- Pixar: 8.1
- Morphe: 6.1
Compared to their generational neighbors, one interesting standout is Crocs—the utilitarian, but highly-customizable foam clogs—which almost 60% of Gen Zs see as favorable compared to only 46% of Millennials.
Gen Z’s Favorite Brands Overall
While Gen Z differentiates itself from the older generations in many ways, a lot of the overall favorites still align with everyone else’s.
Removing the favorability difference score reveals that many of the most popular brands overall still win out, such as Netflix, Google, and Amazon.
Gen Z Trends
Overall, the report found that it’s hard for brands to win with Gen Z. Across all brands that were scored, 33% of the general American public rated them as favorable, but for Gen Z respondents the number dropped to 27%.
In general, Gen Z tends to value conscious consumption and subsequently, brands that can meet those expectations. Digital services and products also do well with this generation that has never known a world without internet.
As more and more Gen Zers enter the labor market and grow their consumer power, they will be an important generation to watch.
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