Starting Points: Generational Reflections on the Outlook for GenZ

New and Not New is a periodic blog about what the COVID-19 pandemic means for marketing and the shape of the marketplace ahead.

The coronavirus pandemic has generational implications. More implications than the next generation seems to realize, or that critics of generational marketing approaches seem to understand. It is all about starting points.

For lots of reasons, many people in the GenZ generational cohort — those born between 1997 and 2010 and coming of age now — feel bullet-proof against the coronavirus. Experts have warned that the worldwide resurgence of cases since late May is due to this generational disregard for the coronavirus, not only because young people are exposing themselves to infection but also because in doing so they are vectors of exposure for others. While young people are less likely to suffer from severe cases or to die, the long-term effects are worrisome, and not just from a health standpoint. The pandemic is a big part of the GenZ starting point that threatens its economic and political futures as well.

Starting points matter. The circumstances in which life trajectories start have a big influence on the shape and direction of those trajectories. A generational cohort is the aggregation of individual trajectories that begin at a similar point in time and thus share a common starting point. Generations are defined and differentiated by their starting points.

The trajectory of every generational cohort begins amid an amalgamation of economic, demographic and cultural realities that shape expectations and open or close various avenues of opportunity. Over time, different generations often wind up in the same place and look alike, but each has taken a different trajectory to get there because each began with a different formative starting point. The story of trajectories is the story of generations. Generational analysis is all about starting points.

More often than not, what passes itself off as generational analysis is a mishmash of pop culture, voguish posturing, atheoretical disquisitions, and fads found on Google Trends. Even generational analyses rooted in data tend to rely on misleading age-based data comparisons rather than on properly age-adjusted comparisons. No surprise, then, that critics of generational analysis have such an easy time picking apart the jejune over-generalizations trumpeted by so many would-be experts. (One of the most incisive and instructive yet least known of these critiques is the data-based debunking of the cluster of things said to be the defining characteristics of Millennials in the mega-bestselling book Millennials Rising (2000) by Neil Howe and Howard Strauss.)

As many critics are quick to point out, not every person in a generational cohort is the same nor is every cohort wholly different from other cohorts. But these critiques are focused on the wrong things. It’s not outcomes but starting points that define generations. Regardless of whether everyone in a cohort is alike or whether different generations are the same or different, each cohort and everyone in it has a distinct and common starting point. Every individual in a cohort comes of age in a shared context of certain economic, demographic and cultural events. Not everyone experiences these things in the same way or winds up alike because of them, but everyone is touched by them and has to take them into account. The common starting point is what defines a generation.

For example, take the old trope of Baby Boomers sitting in the mud at Max Yasgur’s farm for three days at Woodstock. The oft-repeated joke that ten times as many Boomers claimed to be at Woodstock as actually attended contains a deeper truth. The events and values that Woodstock embodied were a major part of the starting point for the entire Boomer cohort. Whether for, against or indifferent, every Boomer had to orient himself or herself with respect to the roiling culture of changing values and social discontent during the 1960s and 1970s that counter-culture figure and Yippie activist Abbie Hoffman called Woodstock Nation. The trajectories of all Boomers were influenced in some way by this shared cultural phenomenon.

There is no magic formula for specifying what needs to be counted among the things that make up a generational starting point. Which is why so many pundits are able to get away with so many crazy claims about generations. There is both art and science to defining starting points. But there is more science to it than not.

The things that influenced and shaped Baby Boomers are perhaps the easiest to catalog because demographics bracketed this cohort so sharply. Both fertility rates and total number of births surged above and then plummeted below critical thresholds in 1946 and 1964. Unique to Boomers is the formative experience of this boom in numbers, which is to say, the power of being the pig in the python, as many have described it. Numbers meant that everything related to culture was disproportionately influential and that the impact of politics and economics was greatly amplified.

Additionally, within the sweeping set of influences that affected the entire Boomer cohort were special circumstances experienced only by sub-groups of Boomers as a distinctive part of their starting point. It turns out that these special circumstances were concentrated among the trailing edge of Boomers.

One thing that has been studied a lot is the impact of starting out in a weak economy on the lifetime earnings of trailing Boomers. Lisa Kahn, Professor of Economics at the University of Rochester, was the first to examine the effects of graduating from college during a recession in groundbreaking work that was recognized as the best paper published in Labour Economics during 2010-11. She analyzed a dataset that followed trailing Boomers from their college graduation between 1979 and 1988 until 2002. (This period covers people born from 1957 to 1966, so technically it bleeds over a couple of years beyond the end of the Boomer cohort). Kahn found that for every one-percentage-point increase in the unemployment rate, new graduates earned an average of seven percent less at the start of their careers. Over time, this gap narrowed to two percent, but a gap remained. The gap was bigger for those graduating during the worst economic years (1980 and 1981), who earned 10 percent less decades later than those graduating during the best year (1988). Starting points matter.

Subsequent work has confirmed and extended Kahn’s research. An analysis by Hannes Schwandt of Northwestern University and Till von Wachter of U.C.L.A. found that trailing Boomers entering the job market during the 1982 recession have higher mortality rates, which first manifested in their late 30’s and worsened as they aged into their 50’s. Drug overdoses is part of the reason, but it is also heart disease, lung cancer and liver disease. This sub-cohort of trailing Boomers is less likely to be married, less likely to have children, and more likely to be divorced. Schwandt and von Wachter also confirmed Kahn’s finding of lower lifetime earnings. Once again, starting points matter.

Christopher Severen of the Federal Reserve Bank of Philadelphia and Arthur A. van Benthem of the Wharton School examined the adult driving behaviors of trailing Boomers who were between the ages of 15 and 18 during the period of higher gasoline prices caused by the 1979 oil crisis. Two decades later in 2000, this sub-cohort of trailing Boomers was less likely to drive a car to work and more likely to use public transit. They drove anywhere from 3.4 to 8.2 percent fewer miles per year (or 900 to 1,100 fewer annual miles). They were also less likely to own a fuel-inefficient light-duty truck. These impacts were larger for trailing Boomers who are lower income and who live in urban areas. Yet again, starting points matter.

In short, there is a large body of research documenting the lifelong impact of starting out during an economic downturn. This is the situation facing GenZ, the leading edge of which is now at the age of high school and college graduation. And if this situation alone isn’t daunting enough, the timing of this for the GenZ cohort makes this starting point even more challenging. It was the trailing edge of Boomers that dealt with economic contraction as it got started. It will be the leading edge of GenZ.

The sequence of exposure to economic contraction within a cohort is important. The vast majority of Boomers came of age in the 1960s and early 1970s when U.S. economic growth was exceptionally strong and more equally distributed than today. This experience of coming of age during a time of prosperity set the tone for all Boomers. The impact of starting in a weak economy affected only the tail-end of the Boomer cohort and thus had no influence on the optimism of prior Boomers. The prevailing generational sensibility was set by the good fortune of the Boomers who came first. Some measure of this sanguine outlook was enjoyed by all Boomers.

In contrast to Boomers, it is the leading edge of GenZ now getting started during a weak economy, not to mention the pandemic. In addition to diminishing the immediate prospects for GenZ, this starting point means that a downcast tenor of emotions and expectations is likely to hang over those who follow, shading the outlook of GenZ as a whole.

Today’s weak economy is not the only encumbrance facing GenZ. Research has also found that lifelong attitudes about government are shaped by starting out during a communicable disease outbreak. This is something that Boomers did not face as they were coming of age.

An exhaustive analysis across 140 countries by Cevat Giray Aksoy of the European Bank for Reconstruction and Development, Barry Eichengreen of the University of California at Berkeley, and Orkun Saka of the University of Sussex assessed the impact on future attitudes about government from the experience of living through an epidemic during one’s formative years between the ages of 18 and 25. They sorted respondents in Gallup World Poll surveys from 2006 to 2018 on the basis of geographic proximity to epidemics that occurred around the world dating back to 1970. Compared to those with no exposure to an epidemic, people with high exposure as a young person expressed substantially lower ratings of the honesty of elections, confidence in the national government, and approval of the political leader. The ratings of young people with high exposure are even lower if they are less educated, urban dwellers, women or living in middle- and high-income countries.

The one-two punch that GenZ is absorbing of weaker employment opportunities and greater distrust of political institutions is likely to transform the normal disaffection of youth with the status quo into a generational estrangement that maturing years will be unable to reconcile. Boomers were able to move on from their youthful rebellion. For GenZ, perhaps not.

GenZ is at a starting point that separates its direction and prospects from prior generations rather than steering it back to what it can learn and copy from them. Add to this the distinctive demographic diversity of this generation and the disintegrating global alliances in the world around them, and GenZ finds itself in a solitary situation utterly unlike that of previous cohorts as they came of age. No surprise, then, that GenZ has gone all-in not only with “OK, Boomer” but with an aggressive repudiation of and distancing from Millennials.

The effects of GenZ’s generational isolation have been apparent for many years in an alarming trend of increasing numbers who are depressed and/or suicidal. As evidence of the debilitating effects of lockdown isolation, pandemic-related headlines have seized on a June 2020 CDC report that one in  four of those 18-to-24 years of age have contemplated suicide in the past 30 days. There is lots of evidence that stress, grief and social isolation during the pandemic have worsened mental health for a significant number of people, but GenZ was struggling with these challenges already. Contrary to media reports, the pandemic has not caused a mental health crisis for GenZ, although it has certainly added to a pre-existing generational malady.

Generational starting points are not just challenges. They provide opportunities, too. While the research reviewed here reflects only difficulties and adversity, the balance of elements in any generational starting point is affirming and brimming with possibilities. Indeed, this is the hopeful, promising paradox of the stony road that GenZ will have to travel as it gets started. The economic crisis triggered by the coronavirus pandemic has bankrupted the past. There will be a recovery, but not a restoration. To a degree unlike anything that happened during the momentous Boomer year of 1968, the pandemic and the ensuing downturn have brought the old guard to its knees. As challenging as these prospects will be, the ability to start with a relatively clean slate opens up vast new possibilities of achievement and revitalization for GenZ.

GenZ is at a confluence of nothing left to lose economically and politically and everything to gain culturally and communally, all of which is happening in the broader context of the relentless pressure that the established order has been under throughout the lives of GenZ, well before the pandemic. From same-sex marriage to #MeToo to trans rights to the woke movement to the Extinction Rebellion to Greta Thunberg to #BlackLivesMatter to George Floyd to removing monuments, discrediting the prevailing order has been a constant part of the social scene and the social media chatter that today’s young people have imbibed throughout their lives. As discussed in an earlier blog in this series, the accompanying shift in social values since the turn of this century is unlike anything seen since the 1960s. The difference is that today’s shift is toward a greater commitment to others not toward a greater focus on self, as it was for Boomers. This will channel GenZ in the direction of change for social improvement rather than for self-improvement. GenZ will not follow the Boomer trajectory from yippie to yuppie. In his 1981 book on the value shifts of the 1960s, renowned social critic and generational research pioneer Daniel Yankelovich observed that self-fulfillment had come to replace self-sacrifice as the guiding credo in society at-large. It is the opposite of that today.

Untethered from any commitment to continuity, and with Boomer numbers waning and Millennials hitting late middle age over the next decade, GenZ will have an extraordinary opportunity to be a profound agent of change and advancement as it ascends into power and authority. Admittedly, it is hyperbolic and overly expectant although not entirely unreasonable to postulate that GenZ will be the 21st century force that brings an end to the post-modern era in the same way that the two world wars of the early 20th century were the force that brought an end to the modern era. GenZ faces many hardships, but it is not forever handicapped by its current situation. Instead, GenZ has been gifted by its starting point with an unprecedented opportunity to realign the marketplace of tomorrow around a more inclusive set of interests and allegiances that can build and deliver value in fresh, inventive and more equitable ways.