Four weeks ago, I turned 65, along with 10,000 other baby boomers. Another 10,000 will cross that threshold tomorrow. This will keep happening every single day between now and 2030.
We don’t know what old age holds for us individually, but demographers and economists have a pretty good idea about what this gray tsunami means for our country. By the time every boomer is collecting Social Security and Medicare, those two programs are projected to eat up about half our entire federal budget—and both the Social Security trust fund and one of Medicare’s two trust funds will be broke. That’s because the ratio of taxpayers to retirees will have fallen to its lowest level ever, about 2 to 1. (When Social Security first went into effect, the ratio was more than 20 to 1.) But renegotiating the social contract between the generations will be a tall order, because these days, young and old in America don’t look alike, act alike, or vote alike.
The young—America’s so-called millennials—are our most diverse generation ever. More than four in 10 are nonwhite, many the children of the great wave of Hispanic and Asians immigrants who began arriving half a century ago. Compared with their elders, millennials are political liberals, they’re digital wizards, they’re not particularly religious, they’re slow to marry and have kids, and they’re broke.
They’re the biggest generation since the boomers, who came of age back in the 1960s and ’70s and are best remembered for the psychedelic social protests of that era. In truth, they were never as liberal as their reputation; more boomers voted for Nixon in the 1972 presidential election than for his antiwar challenger, George McGovern. Nowadays, boomers’ big obsession isn’t sex, drugs, and rock ’n’ roll—it’s having enough money for their golden years.
In fact, economic insecurity is a thread that binds these two massive generations. Many boomers haven’t saved enough for retirement; meanwhile, millennials have lower incomes, less wealth, higher unemployment, and greater debt than the boomers had at the same stage of life. They’re at risk of being the first generation in modern American history to have a lower standard of living than their parents enjoyed.
But a generational war needs combatants, and these two aren’t spoiling for a fight. On the contrary, they play nicely and are even living interdependently. More than four in 10 millennials are either still living with mom and dad or have boomeranged back home at some point in their young lives. The vast majority say they get along just fine with their parents—many of whom are boomers.
The two generations even groove on the same music (well, some of the same music). A 2009 Pew Research Center survey found that the Beatles were the favorite band of both boomers and (along with Michael Jackson) millennials, even though the band had broken up a decade before the first millennial was born!
All those intergenerational good vibrations might help with the hard political bargaining ahead. Social Security and Medicare are the purest expressions in public policy of the idea that as Americans, we are all in this together. But the programs need to be brought into sync with the new demographics of the 21st century, and that means some combination of benefit cuts and tax increases. Every generation will have to share in the pain. The longer political leaders shrink from this challenge, though, the more the burden of any solution will fall on the young, who are already fated to get the worst deal of any generation from Social Security and Medicare. In tomorrow’s America, yesterday’s math won’t work.
Paul Taylor, executive vice president of the Pew Research Center, is the author of The Next America: Boomers, Millennials and the Looming Generational Showdown (PublicAffairs).