Before centennials and millennials became the darlings of the 2000s, Generation X (Gen X) was the talk of the town. And while they've been lurking in the shadows, the 2020s will be the decade when the world will experience their true potential.
Over the next two decades, Gen Xers will begin taking over the leadership reins across all levels of government, as well as throughout the financial world. By the 2030s, their influence on the world stage will reach its peak and the legacy they will leave behind will change the world forever.
But before we explore exactly how Gen Xers will use their future power, let’s first be clear about who they are to begin with.
Generation X: The forgotten generation
Born between 1965 and 1979, Gen X is characterized as a generation of cynical black sheep. But when you consider their demo and history, can you blame them?
Consider this: Gen Xers number around 50 million or 15.4 per cent of the US population (1.025 billion worldwide) as of 2016. They are the smallest generation in modern US history. This also means that when it comes to politics, their votes are buried under the boomer generation (23.6 per cent of US population) on one side and the equally large millennial generation (24.5 per cent) on the other. In essence, they are a generation waiting to be leapfrogged by the millennials.
Worse, Gen Xers will be the first US generation to do worse financially than their parents. Living through two recessions and an era of rising divorce rates has severely damaged their lifelong income potential, not to mention their retirement savings.
But even with all these chips stacked against them, you'd be a fool to bet against them. The next decade will see Gen Xers seize their brief moment of demographic advantage in a way that could permanently tip the generational balance of power.
The events that shaped Gen X thinking
To better understand how Gen X will impact our world, we first need to appreciate the formative events that shaped their worldview.
When they were children (under 10), they witnessed their US family members wounded physically and mentally during the Vietnam War, a conflict that dragged on until 1975. They also witnessed how events a world away could impact their everyday lives as experienced during the 1973 oil crisis and 1979 energy crisis.
When Gen Xers entered their teens, they lived through the rise of conservatism with Ronald Reagan elected to office in 1980, joined by Margaret Thatcher in the UK. During this same period, the drug problem in the US grew more severe, sparking the official War on Drugs that raged throughout the 1980s.
Finally, in their 20s, Gen Xers experienced two events that may have left the most profound impact of all. First was the Fall of the Berlin Wall and with it the disintegration of the Soviet Union and end of the Cold War. Remember, the Cold War started before Gen Xers were even born and it was assumed this stalemate between the two world powers would last forever … until it didn't. Second, by the end of their 20s, they saw the mainstream introduction of the Internet.
In all, Gen Xers’ formative years were filled with events that challenged their ethics, made them feel powerless and insecure, and proved to them that the world could change instantly and without warning. Combine all that with the fact that the 2008-9 financial collapse happened during their prime income earning years, and I think you can understand why this generation could feel somewhat jaded and cynical.
The Gen X belief system
Partly as a result of their formative years, Gen Xers are gravitating toward ideas, values and policies that promote tolerance, security and stability.
Gen Xers from Western countries especially, tend to be more tolerant and socially progressive than their predecessors (as is the trend with each new generation this century). Now in their 40s and 50s, this generation is also beginning to gravitate toward religion and other family-oriented community organizations. They are also ardent environmentalists. And due to the Dot Com and 2008-9 financial crisis that muddied their early retirement prospects, they have become staunchly conservative as it relates to personal finances and fiscal policies.
The wealthiest generation on the brink of poverty
According to a Pew research report, Gen Xers earn far higher incomes than their Boomer parents on average, but only enjoy a third of the wealth. This is partly because of the higher debt levels Gen Xers experienced due to an explosion in education and housing costs. Between 1977 to 1997, the median student-loan debt climbed from $2,000 to $15,000. Meanwhile, 60 per cent of Gen Xers carry credit-card balances from month-to-month.
The other big factor limiting Gen X wealth was the 2008-9 financial crisis; it erased nearly half of their investment and retirement holdings. In fact, a 2014 study found only 65 per cent of Gen Xers have anything saved for their retirement (down seven percentage points from 2012), and over 40 per cent of those only have less than $50,000 saved.
Given all these points, combined with the fact that Gen Xers are expected to live far longer than the Boomer generation, it seems likely that most will continue to work well into their golden years out of necessity. (This is assuming it takes longer than expected for a Basic Income to be voted into society.) Worse, many Gen Xers are also facing another decade (2015 to 2025) of stunted career and wage progression, since the 2008-9 financial crisis is keeping Boomers in the labour market longer, all while ambitious millennials are leapfrogging ahead of Gen Xers into positions of power.
The faint silver lining Gen Xers can look forward to is that, unlike the Boomers who are retiring less than a decade after the financial crisis crippled their retirement fund, these Gen Xers still have at least 20-40 years of extended wage earning potential to rebuild their retirement fund and de-leverage their debts. Moreover, once the Boomers finally do leave the workforce, Gen Xers will become the top dogs enjoying a level of job security for decades that the millennial and centennial workforces behind of them can only dream of.
When Gen X takes over politics
Thus far, Gen Xers are among the least politically or civically engaged generation. Their lifetime of experience with poorly run government initiatives and financial markets has created a generation that’s cynical and apathetic towards the institutions that control their lives.
Unlike generations past, US Gen Xers see little difference and are least likely to identify with either the Republican and Democratic parties. They are poorly informed about public affairs compared to the average. Worst, they don't show up to vote. For example, in the 1994 US midterm elections, less than one in five eligible Gen Xers cast their ballots.
This is a generation that sees no leadership in the current political system to address a future filled with real social, fiscal and environmental challenges—challenges Gen Xers feel burdened to address. Due to their economic insecurity, Gen Xers have a natural tendency to look inward and focus on family and community, aspects of their lives they feel they can better control. But this inward focus won't last forever.
As the opportunities around them begin to shrink due to the coming automation of work and vanishing middle-class lifestyle, alongside the increasing retirement of Boomers out of public office, Gen Xers will feel emboldened to take on the reigns of power.
By the mid-2020s, the Gen X political takeover will begin. Gradually, they will reshape government to better reflect their values of tolerance, security, and stability (mentioned earlier). In so doing, they will push a radically new and pragmatic ideological agenda based on socially progressive fiscal conservatism.
In practice, this ideology will promote two traditionally opposing political philosophies: It will actively promote balanced budgets and a pay-as-you-go mentality, while also trying to enact Big Government redistribution policies that aim to balance the ever-widening gap between the haves and the have-nots.
Given their unique set of values, their disdain for the current politics-as-usual, and their economic insecurity, Gen X politics will likely favor political initiatives that include:
- Ending any remaining institutional discrimination based on gender, race, and sexual orientation;
- A multi-party political system, instead of the duopoly currently seen in the US and other nations;
- Publicly funded elections;
- Computerized, instead of human directed, electoral zoning system (i.e. no more gerrymandering);
- Aggressively closing tax loopholes and tax havens that benefit corporations and the one per cent;
- A more progressive tax system that more evenly distributes tax benefits, instead of funneling tax income from the young to the elderly (i.e. ending the institutionalized social welfare Ponzi scheme);
- Taxing carbon emissions to fairly price the use of a country’s natural resources; thereby allowing the capitalist system to naturally favour environmentally friendly businesses and processes;
- Actively shrinking the public sector workforce by integrating Silicon Valley tech to automate huge swathes of government processes;
- Making the majority of government data publicly available in an easily accessible format for the public to scrutinize and build upon, especially at the municipal level;
The above political initiatives are actively discussed today, but none are anywhere close to becoming law due to the vested interests that divide today's politics into increasingly polarized left vs. right wing camps. But once future Gen X led governments take power and form governments that combine the strengths of both camps, only then will policies like these become politically tenable.
Future challenges where Gen X will show leadership
But as optimistic as all of these groundbreaking political policies sound, there is a range of future challenges that will make everything above seem irrelevant—these challenges are new, and Gen Xers will be the first generation to truly tackle them head on.
The first of these challenges is climate change. By the 2030s, severe climate events and record-breaking seasonal temperatures will become the norm. This will force Gen X led governments around the world to double down on renewable energy investments, as well as climate adaptation investments for their infrastructure. Learn more in our Future of Climate Change series.
Next, the automation of a range of blue and white collar professions will begin to accelerate, leading to massive layoffs across a range of industries. By the mid-2030s, the chronically high levels of unemployment will force world governments to consider a modern New Deal, likely in the form of a Basic Income (BI). Learn more in our Future of Work series.
Likewise, as the demands of the labour market change ever more regularly due to the growing automation of work, the need to retrain for new types of work and even entirely new industries will grow in step. This means individuals will become burdened with constantly growing levels of student loan debt just to keep their skills up to date with market demands. Obviously, such a scenario is unsustainable, and that's why Gen X governments will increasingly make higher education free for their citizens.
Meanwhile, as the Boomers retire out of the workforce in droves (particularly in Western countries), they will retire into a public social security pension system that is set to become insolvent. Some Gen X governments will print money to cover the shortfall, whereas others will completely reform social security (likely reforming it into a BI system mentioned above).
On the tech front, Gen X governments will see the release of the first true quantum computer (watch this fun description video). This is an innovation that will represent a true breakthrough in computing power, one that will process a range of massive database queries and complex simulations in minutes that would have otherwise taken years to complete.
The downside is that this same processing power will also be used by enemy or criminal elements to crack any online password in existence—in other words, the online security systems that protect our financial, military, and government institutions will become obsolete nearly overnight. And until adequate quantum encryption is developed to counteract this quantum computing power, many sensitive services now offered online may be forced to temporarily close their online services.
Finally, for the Gen X governments of oil producing countries, they will be forced to transition into a post-oil economy in response to a permanently decreasing global demand for oil. Why? Because by the 2030s, carsharing services composed of massive autonomous car fleets will reduce the total number of vehicles on the road. Meanwhile, electric cars will become cheaper to buy and maintain than standard combustion vehicles. And the percentage of electricity generated by burning oil and other fossil fuels will rapidly be replaced by renewable energy sources. Learn more in our Future of Transportation and Future of Energy series.
The Gen X worldview
Future Gen Xers will preside over a world struggling with extreme wealth inequality, technological revolution, and environmental instability. Luckily, given their long history with sudden change and aversion to insecurity of any form, this generation will also be the best positioned to face these challenges head on and make a positive and stabilizing difference for future generations.
Now if you think Gen Xers have a lot on their plates, wait until you learn about the challenges millennials are set to face once they enter positions of power. We'll cover this and more in the next chapter of this series.