X: From Fiction to Fact, and Still a Mystery

Generation X and Its Evolving Experience with the American Dream

By Patty David, Vicki Gelfeld, and Andreina Rangel Events that shaped Generation X have shifted its future focus from economics to experiences.

he American Dream traces its roots clear Generation X is the latest age cohort to cross T back to American society’s founding prin- the milestone of reaching age 50, providing an ciples. While the term does not date back to the opportunity to examine their experience with nation’s founding, it captures the values set forth the American Dream, particularly as more mem- by our Founding Fathers. The Declaration of bers of the generation enter their 50s in the Independence proclaims: “We hold these truths coming years. Distinct differences in needs and to be self-evident, that all men are created equal, values from previous are shaping that they are endowed by their Creator with cer- how Generation X sees the American Dream. tain unalienable Rights, that among these are How do they defne it, and are they realizing it? Life, Liberty, and the pursuit of Happiness.” The connection between the American Recent Views of the Dream and the pursuit of happiness is clear. Ever Fluid American Dream The term American Dream is thought to have According to a Roper study conducted more frst appeared in 1931—notably, during the Great than thirty years ago, the American Dream was Depression—in a book called The Epic of Amer- defned by the overall population, frst and fore- ica by James Truslow Adams (1931). It stated most, as “living in an open society in which eve- that the American Dream “. . . is ‘that dream of ryone has equal chance” (Roper Organization a land in which life should be better, richer and and The Wall Street Journal, 1987). That defni- fuller for everyone, with opportunity for each tion was followed by “having freedom of choice according to ability or achievement.’ ” in how to live,” “having a rewarding career and Perhaps in sync with the term’s roots in a family life,” and “owning a home.” Today this challenging time in American history, its mean- defnition has evolved, with “living in an open ing has evolved as times and circumstances have society in which everyone has equal chance,” changed—generations have varied their defni- dropping in rank from frst to ffth. “Having tion of the Dream they pursue. freedom of choice,” “having a rewarding career

abstract Generation X demonstrates how the definition of the American Dream does not only evolve over time; it also evolves in the minds of individuals as they age. Generation X is experiencing its own version of the American Dream. While conquering life’s challenges, Generation X shows itself to be a resilient generation, one whose members long ago learned to rely on themselves. As they continue to pursue happiness alongside other groups, this spirited and driven generation likely will not allow the American Dream to elude them. | key words: Generation X, Baby Boomer, American Dream, happiness, generation, good life

Volume 41 .Number 3 | 77 GENERATIONS – Journal of the American Society on Aging

Table 1. Components of the parents” is a signifcant part of the American Gen X American Dream Dream. However, for most Americans, this im- portant aspect of the American Dream seems in- creasingly harder to achieve. In 2014, only 42 per- cent of the adult population thought they had better chances to succeed than their parents, down 30 percentage points from the year 2000 (Kantar Futures, 2015). Furthermore, consistent with consumer sentiment, a study conducted by Chetty and colleagues shows children’s prospects of earning more than their parents have fallen from 90 per- cent to 50 percent over the past half century (Chetty et al., 2016).

Children’s prospects of earning more than their parents have fallen from 90 percent to 50 percent.

Generation X is the frst generation in U.S. history in which a majority will not be better off than their parents. Only about a third of Genera- Source: Roper Organization and The Wall Street Journal, 1987. tion X has more wealth than their parents had at their age (Scotti, 2014). Additionally, they are not and family life,” and “owning a home” are still as concerned about upward mobility as they are signifcant parts of the Dream, although the with being able to pay the bills at the end of the ranking has slightly shifted. month—more than half (56 percent) report “liv- Among Generation X, the same pattern holds ing paycheck to paycheck,” compared to 46 per- true, with one main difference concerning “hav- cent of . Generation X is the gen- ing a fnancially secure retirement” and “be- ing fnancially secure enough to have ample Figure 1. Fraction of Children Earning time for leisure purposes.” These concepts have More Than Their Parents dropped or remained the same in ranking for this generation, while they have remained fairly stable or increased among the overall popula- tion. This provides a glimpse into how Gen- eration X thinks about fnances (discussed in greater detail below)—an underlying enabler of the overall American Dream. Underpinning the American Dream is the most basic defnition of a better life—earning more money and enjoying higher living stan- dards than your parents. Moreover, for 54 per- cent of Generation X, “doing better than your Source: Chetty et al., 2016

78 | Fall 2017 Generation X: From Fiction to Fact, and Still a Mystery eration more likely to think it lacks fnancial Understanding a generation’s time, place, security, with 39 percent reporting that their f- and associated collective spirit sheds light on nancial security is bad, compared to 29 percent what lies behind the lens through which the of Baby Boomers (Kantar Futures, 2016). generation views the American Dream. When it comes to the pursuit of happiness, upward mobility may be something that mem- Baby Boomers and Their American Dream bers of Generation X can do without, but the To understand Generation X’s experience with ability to feel fnancially secure may be another. the American Dream, it’s helpful to consider When asked what would most increase their the Baby Boomers’ experience. Baby Boomers happiness, roughly four in ten (39 percent) entered the scene post-World War II, at a time respondents ranging in ages 40 to 59 in the of widespread government subsidies. Their fam- AARP Life Budget Survey cited fnancial security. ilies had access to housing, good educational Furthermore, one-third reported that a lack of choices for their children, and good jobs (Owram, fnancial security was the main obstacle to their 1997). They were reaping the benefts of a gen- prioritizing the things in their lives that would erous G. I. Bill. make them happier (AARP, 2014). Life, liberty, When the Baby Boomers entered their and the pursuit of happiness clearly depend in formative years, social change and movement large measure on fnancial stability. were the norm. They grew up participating in Analysis of GfK Roper’s “good life” data on antiwar protests, drug experimentation, sexual consumer aspirations suggests that changing freedoms, and the Civil Rights Movement, as well defnitions of “the good life” represent the col- as the women’s movement (Schuman and Scott, lective spirit of the time and place (GfK Con- 1989). They became the wealthiest generation, on sumer Life [Roper Reports®], 2014), and are average, in U.S. history and the frst to grow up a good representation of the meaning of the expecting the world to consistently improve over American Dream. Comparisons of “good life” time (Jones, 1980). Many owned homes, had good aspirations in their youth to how they defne the jobs, and could afford an education and health- “good life” today, begin to depict how Genera- care. They could also generally afford to experi- tion X is experiencing the American Dream. ence the world, travel in luxury, dine out, attend concerts and big sports events, Table 2. Components of the Good Life indulge themselves with the comfort of a vacation home, high-end cars, and pamper themselves at fve-star resorts. Their excessive consumerism (Pinker, 2011) and indulgence in experiences took the meaning of the “good life” to the next level. Looking at the “good life” components for Baby Boomers in their youth, elements such as “happy marriage,” “children,” “an interesting job,” and “tra- vel abroad,” which are more experiential in nature, were at Source: GfK Consumer Life (Roper Reports®), 2014. the top of the list. Today, these

Volume 41 .Number 3 | 79 GENERATIONS – Journal of the American Society on Aging items have been replaced by “having good and, of course, the digital revolution got under- health,” and “having a fnancially secured way, starting with computers becoming an in- retirement” (GfK Consumer Life [Roper Re- home desktop appliance. ports®], 2016). That evolving sentiment was Amid these societal dynamics, Generation X evident in an AARP study measuring peo- was more likely to see the “good life” as “having ple’s “Fantasies and Fears.” While one-third lots of money,” “having a college education,” (34 percent) of overall respondents in the study “traveling abroad,” “having really nice clothes,” think their health will be the most important and “owning a vacation home.” Their aspirations challenge they will face within the next fve could be explained, in part, by their consumer years, Baby Boomers are twice as likely as values. At the time, “ambition” ranked higher for Generation Xers to say so, perhaps reflecting them than for other generations (GfK Consumer the health challenges that often arise as one Life [Roper Reports®], 2016). ages (AARP, 2016). Many in Generation X were ‘latchkey The Generation X American Dream Generation X entered the scene nineteen years kids,’ left to fend for themselves for after the birth of the frst Baby Boomer, and the long hours each day. world that unfolded in the ensuing years would look very different. This cohort grew up during Still other aspects of the environment, as a time of shifting societal values reflected in Generation X grew older, contributed to the such trends as rising rates and more generation’s orientation. This pragmatic genera- mothers participating in the workforce, result- tion came into adulthood in the Reagan years, ing in many becoming “latchkey kids” who when the bull market was beginning. Gen Xers were left to fend for themselves for long hours experienced a Dow Jones rise from 824.57 in each day (Howe and Strauss, 1993). They were January 1980 to 1211.57 in December 1984 not coddled for every disappointment. Auto- (FedPrimeRate.com, 2017). Although a major nomy and self-reliance, rather than respect (from July 1981 to November 1982) for authority, was the result. preceded the Reagan bonanza, the growing Generation Xers grew up in an era of emerg- economy fed a “materialistic aspiration” that ing technology and political and institutional manifested in consumer desire for everything uncertainty. They watched Watergate unfold, from BMWs to designer jeans. Average house- Three Mile Island explode, and the Bhopal gas hold expenditures grew from $8,270 in 1972 to leak happen; they waited in long lines at the gas $21,975 in 1984 (not adjusted for inflation) (U.S. station in the backseats of their parents’ cars Department of Labor, 2017). Aspirations were during the oil crises of the 1970s, watched with driven by excess and a debt-fueled lifestyle, and bated breath to see if the hostages would sur- “more and more” was the mantra of the day vive the Iranian hostage crisis, and were im- (Kantar Futures, 2016). Within this environment, mersed in coverage of the Clinton-Lewinsky Generation X adopted a more materialistic vi- debacle. Meanwhile, they also experienced sion, fed by perceived pressure to make money great technological advances, such as when the and be successful (Kantar Futures, 2000). As a mimeograph machine’s blue ink was replaced group, they were putting their faith on tangible by the high-speed copier. A document could outward signs of that success and focusing on be faxed in seconds compared to the previous acquiring possessions. thirty-plus minutes, heavy adding machines Then came the shock. The were replaced with the handheld calculator, hit—just as many in Generation X were buying

80 | Fall 2017 Generation X: From Fiction to Fact, and Still a Mystery

houses at the peak of the real estate market. This six months, compared to the peak of the reces- generation emerged with six times the debt their sion (57 percent reported feeling stress versus parents carried at the same age, and the median 80 percent during the recession), Gen Xers are value of fnancial holdings for 35- to 44-year- still lagging behind Baby Boomers (48 percent) olds dropped 47 percent between 2007 and 2010 (GfK Consumer Life [Roper Reports®], 2016). (Kantar Futures, 2016). Generation X suffered Generation X’s fnances confrm that in- tremendously from this fnancial downturn. creased stress. Barring unforeseen changes, Against this backdrop, Generation X’s def- during retirement, Generation Xers will, on inition of the “good life” evolved, shifting from average, have just half of their former income to material to experiential. Previous top-rank- live on—a full 10 percent less than is projected ing components of the “good life” have been re- for Baby Boomers (Kantar Futures, 2016). It is no placed by “having good health” and “having a surprise that Generation Xers are less likely to fnancially secured retirement.” Now, Gen Xers’ be optimistic about their fnancial future when opinion of the “good life” is more likely to be on compared to Baby Boomers (62 percent versus par with Baby Boomers’ aspirations, with the 58 percent) (GfK Consumer Life [Roper Re- exception of “having a job that pays much more ports®], 2016). While half (49 percent) of respon- than average” and a “college education for my dents ages 35 and older in the AARP Fantasies children,” aspirations that likely are due to dif- and Fears study reported being kept up at night ferences in the generations’ life stages. by fnancial concerns, those in Generation X were more likely than Baby Boomers to report How Alive Is the American worrying about their fnances, their relation- Dream for Generation X? ships, and their work (AARP, 2016). Generation X’s current fnancial reality, preced- Despite this fnancial strain, more than half ed by an economic roller coaster, is casting a of Generation X believes that the American shadow over its future. Although this generation Dream is alive (56 percent); however, 69 per- is reporting less fnancial distress within the last cent feel the American Dream is harder to

Volume 41 .Number 3 | 81 GENERATIONS – Journal of the American Society on Aging obtain than it was in the past (GfK Consumer open society in which everyone has equal chance,” Life [Roper Reports®], 2014). Nevertheless, was this generation’s top defnition of the Ameri- they continue to be decidedly motivated to can Dream, while today that specifc defnition achieve success, including in creative or has dropped in ranking. Economic security- innovative ways. They are forging their own related defnitions such as “having a fnancially path. In a survey of professionals across the secured retirement,” meanwhile, ranked fourth nation, Generation Xers rated higher than both in 1991 and maintain the same ranking today, Baby Boomers and for having while it has increased to third among the overall “entrepreneurial acumen” (57 percent com- population. Furthermore, Generation Xers’ def- pared to 16 percent and 40 percent, respec- nition of the “good life,” has shifted from a focus tively) (Ernst & Young, 2013). on material possessions during their formative This enterprising generation has produced years to a more expe-riential one today. a considerable number of innovative business- Currently, some of their top aspirations people, such as PayPal and Tesla Motors founder include “having good health” and “having a Elon Musk, Dell, Inc., founder Michael Dell, fnancially secured retirement” (AARP, 2015). and Facebook COO and author Sheryl Sandberg, While not focused exclusively on Generation X, to name a few. In addition, for 51 percent of AARP/USA Today’s Reflections on Life and Ca- Generation Xers, compared to 44 percent of reer study includes the top four elements that Baby Boomers, owning one’s own business is a respondents ages 40 to 59 cited as being part of sign of success (Kantar Futures, 2015). Moreover, living a “good life”: Being happy, being healthy Generation Xers are twice as likely as are Baby and physically ft, having good relationships with Boomers to report wanting to start their own one’s spouse or partner, and feeling connected to business (32 percent versus 16 percent) (AARP, one’s family and (Thayer, 2014). 2016). And, if money were not an issue, they These shifts provide a glimpse into how this would be more likely than Baby Boomers to quit generation is experiencing its own version of the their current job, pursue their dream vocation, American Dream; it may also provide an idea of and change careers (among other things) the challenges Generation Xers might experi- (AARP, 2016). ence as they approach retirement, the culmina- The notion that it is through working that tion of the American Dream, in the areas of one obtains the good things in life (e.g., the car, fnancial security. the house, the enhanced opportunities for their But while such challenges may lie on the children, to which Baby Boomers aspired) may horizon, Generation X has already shown itself be falling away, replaced by more Generation X to be a resilient generation, one whose members members choosing their own paths, often long ago learned to rely on themselves. As Gen through businesses of their own—reflecting Xers continue to pursue happiness alongside that “entrepreneurial acumen” cited by Ernst other groups, members of this spirited and dri- & Young’s 2013 study of young professionals. ven generation likely will not allow the Ameri- can Dream to be elusive. Instead, Gen Xers will An American Dream Evolving continue to redefne it. Inside a Generation Generation X has demonstrated how the defni- Patty David, M.A., is senior research advisor at AARP, tion of the American Dream does not only evolve in Washington D.C. Vicki Gelfeld, M.B.A., is research over time; it also evolves in the minds of individu- advisor at AARP, in Washington, D.C. Andreina als as they age. In GfK’s Roper survey of the Amer- Rangel, M.B.A., M.S., is senior strategic advisor at ican Dream in 1991, the concept of “living in an AARP, in Washington, D.C.

82 | Fall 2017 Generation X: From Fiction to Fact, and Still a Mystery

References Adams, J. T. 1931. The Epic of FedPrimeRate.com. 2017. History Roper Organization and The Wall America. New York: Little, of The Dow Jones Industrial Average Street Journal. 1987. The American Brown & Company. from 1900 to the Present. www.fed Dream: A National Survey. primerate.com/dow-jones-indus Princeton, NJ: Dow Jones & AARP. 2014. Life Budget Survey. trial-average-history-djia.htm. Company. www.aarp.org/content/dam/aarp/ Retrieved May 12, 2017. research/surveys_statistics/gen Schuman, H., and Scott, J. 1989. eral/2014/Life-Reimagined-Life- GfK Consumer Life (Roper “Generations and Collective Budget-Survey-AARP-res-gen.pdf. Reports®). 2014. Memories.” American Sociological Retrieved May 22, 2017. Review 54(3): 359–81. GfK Consumer Life (Roper AARP. 2015. Generation X: Finan- Reports®). 2016. Scotti, C. 2014. “Why Generation X ces. www.aarp.org/content/dam/ May Have Taken the Biggest Hit Howe, N., and Strauss, W. 1993. 13th aarp/research/surveys_statistics/ from the Great Recession.” FOX Gen: Abort, Retry, Ignore, Fail? New infographics/life/2015/GenX- Business. www.foxbusiness.com/ York: Vintage. Finance-Infographic-res-life.pdf. features/2014/06/19/why-genera Retrieved May 2, 2017. Jones, L. 1980. Great Expecta- tion-x-may-have-taken-biggest-hit- tions: America and the from-great-recession.html. AARP. 2016. Fantasies and Fears: Generation. New York: Coward, Retrieved May 2, 2017. Attitudes of Adults Ages 35-Plus. McCann & Geoghegan. www.aarp.org/research/topics/ Thayer, C. 2014. “Reflections on life/info-2016/fantasies-fears- Kantar Futures. 2000. (U.S. Life and Career.” AARP Research. attitudes-adults-35plus.html. Yankelovich MONITOR). www.aarp.org/research/topics/ Retrieved May 22, 2017. Kantar Futures. 2015. (U.S. economics/info-2014/life-career- reflections.html. Retrieved May Chetty, R., et al. 2016. “The Fad- Yankelovich MONITOR). 22, 2017. ing American Dream: Trends in Kantar Futures. 2016. (U.S. Absolute Income Mobility Since Yankelovich MONITOR). U.S. Department of Labor, Bureau 1940.” National Bureau of Econom- of Labor Statistics. 2017. Consumer ic Research. www.nber.org/papers/ Owram, D. 1997. Born at the Right Expenditure Survey, 1972–1984. w22910. Retrieved April 16, 2017. Time. Toronto: University of www.bls.gov/cex/csxstnd.htm#1984. Toronto Press. Retrieved May 12, 2017. Ernst & Young. 2013. Younger Managers Rise in the Ranks. www. Pinker, S. 2011. The Better Angels of ey.com/us/en/issues/talent-man Our Nature. New York: Penguin. agement/talent-survey-members- of-each-generation-perceived-char acteristics. Retrieved May 12, 2017.

Volume 41 .Number 3 | 83 Copyright of Generations is the property of American Society on Aging and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.