The Silent Generation, "The Lucky Few" (Part 3 of 7)

Last Updated: Aug. 27, 2014

August 13, 2013 | By Neil Howe

This editorial originally appeared in Forbes.

This is part three of a seven-part series examining the rising (or falling) living standards of successive U.S. generations. Read part one here.

The Silent Generation (born 1925-42) today comprises roughly 20 million adults in their 70s and 80s. Their age location in history sandwiches them awkwardly between two better-known generations: They were born just too late to be World War II heroes and just too early to be New Age firebrands. In their personal lives, this age location has been a source of tension. By the time the Silent were entering midlife, they spearheaded the divorce revolution and popularized (thanks, Gail Sheehy) the term “midlife crisis.” But in their economic lives, this age location has been very good to them—and given them a lifetime ride on the up-escalator coming off the American High.

The Silent started out as the children of crisis.  They grew up while older people were fighting wars and making great sacrifices on their behalf.  Childrearing in America, already more protective for the G.I.s, approached the point of suffocation.

When the Silent began coming of age after World War II, they tiptoed cautiously in a post-crisis social order that no one wanted to disturb.  Unlike the G.I.s, they rarely talked about “changing the system,” but instead about “working within the system.” Because they didn’t want anything to go on their “permanent records” and kept their heads down during the McCarthy era, Time gave them the label “Silent” in a famous 1951 essay.

They were also careful in the labor market. Fortune’s story on the “College Class of ‘49” was subtitled “Taking No Chances.” When they went to job interviews, their first questions were about pension plans. They emulated their powerful G.I. elders by marrying and having babies incredibly young—in fact, younger on average than any other generation in American history.

Unlike the G.I.s, the Silent didn’t have to wait for a depression or war to end. A new “booming” economy was ready to join right out of school. Demographer Richard Easterlin, in his 1980 book Birth and Fortune, called them the “Lucky” or “Fortunate” generation for their great timing. Easterlin noted that a remarkable feature of the Sputnik era was how the typical young man could earn more by age 30 than the average wage for men of all ages in his profess­ion—and could certainly live better than most “retired” elders. He also noted that since the mid-1970s, the economic conditions facing young late-wave Boomers were becoming much tougher.

At the time, Easterlin hypothesized that the Silent—being small in number due to low birthrates during the 1930s and early ‘40s—benefited from labor markets that bid up their wages in an era when young adults were relatively scarce. Later, as they retired, their small size (next to the large FICA-paying generation following them) has certainly helped make their pay-as-you-go Social Security and Medicare benefits seem more affordable. Sociologist Elwood Carlson echoes Easterlin’s thesis in his recent book, The Lucky Few: Between the Greatest Generation and the Baby Boom.

Yet the arrival of young-adult Gen Xers in the 1980s and ‘90s, who were also small in number but have fared miserably in the economy (a topic I’ll explore in a later column), throws this explanation into doubt. Numbers helped, but what helped the Silent even more was, again, their timing. Taught to play by the rules, this generation discovered at every age—from the moment they married (at a median age of 21 in 1960) and purchased a house and car (soon thereafter)—that playing by the rules always worked well for them.

Real Median Family Income by Cohort: Silent Generation

Real Median Family Income by Cohort: Silent Generation

As the Silent have aged, their perfect timing has not let them down. Many of them locked in fixed 3% mortgages on their first homes in the 1960s just before inflation hit—giving them decades of negative real interest rates. In the large corporations where so many of them worked, they signed up young for the defined-benefit pension plans their G.I. managers started—the same plans that are now unraveling for Boomers. Their midlife high-savings decades roughly coincided, in 1980s and ‘90s, with perhaps the greatest bull market ever in both stocks and bonds. And after riding this bull, the Silent retired and sold out just before the crash hit. The last Silent cohort reached age 65 in 2007. Bingo.

This is the only living generation that could half-believe, along with Woody Allen, that “80 percent of life is just showing up,” a joke that makes most Xers simply shake their heads.

In terms of national leadership, the Silent—unlike the G.I.s—are not a powerful generation. According to the late management guru Warren Bennis, they redefined leadership as more “maestro” than “macho.” They are the only generation in American history never to occupy the White House. In Presidents, we jumped from George Bush Sr., the World War II veteran, to Baby Boomer Bill Clinton.

Yet they are without doubt the healthiest and most educated generation of elders that ever lived—and, of course, the wealthiest. Coming of age fifty years ago, they quickly amassed more wealth than the seniors of that era. (Back in the early 1960s, the elderly were poorer than young adults by most measures.) In 2010, for the first time, the median net worth of households age 75+ ($228,400) is higher than that of any younger age bracket. (See part one.) Astoundingly, it’s over five times higher than the median net worth of households age 35 to 44 ($44,600).

Given their material good fortune, along with their instinct to help others in need, the Silent as elders have become economic anchors for America’s new renaissance in multigenerational family living. Many routinely pay for extended-family vacations or subsidize their grown Boomer or Xer kids. Many have set up college trust funds for their grandkids—and indeed, a record share have assumed formal custody of them. Most are worried about the economic challenges facing their families—and wonder why success has become so much harder for them.