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nfinf  7mo ago (nfinf.substack.com)   2023 thread views

How good the boomers had it

nfinf.substack.com

Inspired by some of the conversations we had here about the experiences of previous generations (especially with /u/the_nybbler, and yes, I know you're not a boomer), I wrote up a post that challenges a common narrative of how good the boomers had, and how screwed the millennials are. Main point is that the houses were not that much cheaper relative to now, and the interests rates were murderous. Enjoy!

(I'm a regular poster here, but I wanted to separate the identities for opsec purposes).

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Main point is that the houses were not that much cheaper relative to now, and the interests rates were murderous. Enjoy!

I agree 100% with this. Shameless link plug: The Myth of Wealthy Boomers (why they are not much ‘better off’ compared to later generations)

The boomers were not as exceptionally lucky or fortuitous as commonly assumed. Like any generation, there is a lot of variance or variability in terms of SES, as we're talking large populations of people . Despite having 50+ years of post-war prosperity and a supposed head start, still, many boomers live in poverty or don't have enough for retirement.

True, homes were a lot cheaper in the '80s and '70s, but interest rates were much higher, mortgages more expensive and shorter duration, and much lower inflation-adjusted salaries. No 6-figure white collar jobs for boomers back then. Adjusted for inflation, a competitive boomer job may have paid the equivalent of of 60-80k today, not $300k + comp.

Moreover, home ownership rates are unchanged over the past 60 years, at around 60-65%.

don't have enough for retirement.

I'm sure that there are some deserving poor Boomers, but it's notable that the savings rate fell as they earned more of national income:

https://fred.stlouisfed.org/series/PSAVERT

Cutting saving rates by > 50% on average doesn't seem like a good retirement strategy, except insofar as you know that welfare (Social Security, Medicare etc.) will come to the rescue.

I don't know if Boomers in particular were saving less, though.

Moreover, home ownership rates are unchanged over the past 60 years, at around 60-65%.

Just a side-note, homeownership rates aren't very meaningful for affordability. If the government introduces a new 100% tax on all new cars (it goes towards kicking puppies and parking studies), the calculation to decide between leasing (at 2x the rate) vs buying with a loan (at 2x the price) is essentially the same for car-users as before, the 2s cancel. That does not tell you anything about the harm/fairness/cost of that tax.

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