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.
Charted: The Working Hours of Americans at Different Income Levels
This graphic shows the average working hours between higher and lower-income groups in America, based on income percentile.
The Actual Working Hours of Different Income Levels
Do you really need to work 100-hour weeks for success?
In 2021, America’s top 10% of income earners made at least $129,181 a year—more than double the average individual income across the country.
When looking at differences between income groups, there are many preconceived notions about the work involved. But what are the actual average working hours for different income groups?
This graphic by Ruben Berge Mathisen uses the latest U.S. Census data to show the average working hours of Americans at different income levels.
Comparing Average Work Weeks
The data used for this graphic comes from the U.S. Census Bureau’s May 2022 Current Population Survey, which surveys more than 8,000 Americans from various socioeconomic backgrounds.
Importantly, the data reflects the average work hours that respondents in each income percentile “actually” work each week, and not what’s on their contract. This also includes overtime, other jobs, or side gigs.
According to the survey data, America’s top 10% income percentile works 4.4 hours more each week than those in the bottom 10%. And in surveys across other countries, though with hundreds of respondents instead of thousands, the discrepancy was similar:
Do the rich really work longer hours than the poor?
The graph below plots data from 27 countries.
— Ruben Mathisen (@rubenbmathisen) August 7, 2022
While both income and wealth gaps are generally widening globally, it’s interesting to see that higher earners aren’t necessarily working more hours to achieve their increasingly larger salaries.
In fact, the top 10% in the 27 countries shown in the graphic are actually working around 1 hour less each week than the bottom 10%, at least among full-time workers.
Zooming Out: Average Working Hours per Country
Similarities arise when comparing average working hours across different countries. For starters, people living in poorer countries typically work longer hours.
According to Our World in Data, the average worker in Cambodia works about 9.4 hours a day, while in Switzerland, people work an average of 6 hours a day.
While many factors contribute to this discrepancy in working hours, one large factor cited is tech innovation, or things like physical machines, processes, and systems that make work more efficient and productive. This allows wealthier countries (and industries) to increase their output without putting in as many hours.
For example, from 1948 to 2011, farm production per hour in the U.S. became 16x more productive, thanks to innovations like improved machinery, better fertilizers, and more efficient land management systems.
Visualizing The European Union’s Aging Population by 2100
The EU’s population is aging rapidly. By 2100, more than 30% of the region’s population is expected to be 65 or older.
The EU’s Population by 2100
View a higher resolution version of this map.
Many countries and regions are expected to see rapidly aging demographics, and the EU is a notable example. By the end of the century, more than 30% of the region’s population is expected to be 65 or older.
This graphic by Gilbert Fontana uses data from Eurostat to show how the EU’s population is projected to change by 2100. In the article below, we explain how this shift could have a dire impact on the region’s economic growth.
Dependency Ratio from 2021 to 2100
The graphic highlights the old-age dependency ratio, which measures the ratio of people 65 and above, and generally retired or needing supplemental income, compared to the number of people that are working age (15-64).
In 2021, the EU’s dependency ratio was 32. This meant that for every 100 working-age people, there were 32 elderly people. By 2100, this ratio is expected to increase to 57.
But what’s the real-life impact of this?
The Impact of the EU’s Aging Population
Typically, the retirement age population is not working and relies on pensions to support themselves financially. Therefore, the bigger the elderly population, the more pressure put on a country’s social safety net.
|Age||EU Population (2021)||EU Population (2100)||% Change|
As the population ages, taxes may rise to help cover those inflating costs. And a decrease in a region’s working-age population can also have a significant impact on innovation and experience in the overall workforce.
For example, Japan’s population is also aging rapidly. According to the IMF, this could slow down the country’s annual GDP growth by 1 percentage point in the next 30 years.
Main Causes of An Aging Population
Japan and the EU aren’t the only places in the world that are seeing their population get older—the entire global population is aging.
According to the World Health Organization, one in six people worldwide will be 60 years old or older by 2030. This is happening for two main reasons:
- Drop in global fertility rates
- Increased life expectancies
To help mitigate the risks that come from aging populations, governments need to ensure their pension systems are adequate and adjusted to account for increasing life expectancies and growing elderly populations.
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