Gen Zers worry about climate change the way boomers worry about inflation – Business Insider
- The US’ oldest and youngest adults are split on which economic crisis poses the greatest risk.
- Baby boomers worry inflation will erode their life savings, while Gen Zers worry about climate change the most.
- The gap shows no signs of closing, but each group likely needs the other to solve their most-feared crises.
A spectre is haunting America’s youth. The spectre of climate change.
That’s not exactly newsworthy — scientists have been studying global warming for more than a century. But what is different is that boomers have oriented the US economy for 40 years around their fears of rampant inflation, and the emerging Gen Z economy shows that it could one day be similarly focused on the climate crisis.
The country’s generations are split on which economic crises are most concerning. Millennials and Gen Zers don’t have much savings — those are famously being hoarded by older generations, as Insider’s Hillary Hoffower reported. But that’s not really the point: The younger Americans maintain that the world being on fire is a much bigger economic problem.
It’s the old guard pitted against the new. Climate-change activist Greta Thunberg versus inflation hawk Larry Summers. A 1970s-like inflation crisis or a future of economic disaster.
Thirty-seven percent of Gen Zers listed climate change as a “top concern” in April, while one-third of millennials said the same, according to the Pew Research Center. By comparison, 29% of boomers called it a top concern, and 36% said it wasn’t an important concern at all.
Instead, older Americans are feeling the heat of inflation. Price growth is the fastest it’s been in more than a decade, and wages lately haven’t kept up, and 95% of the oldest living generation say they’ve run into price increases, while only 84% of millennials and 75% of Gen Zers said the same. Three-fourths of boomers said inflation negatively impacted their finances, according to a Bankrate.com survey published Wednesday. The share drops to 54% for millennials and 54% for Gen Zers.
Neither generation can solve their pet problem without the other
Boomers still occupy the country’s most powerful offices. The Senate is the oldest its ever been, and President Joe Biden is the oldest president the US has ever had.
Biden has made climate change a top concern and revealed plans in April for the US to halve its greenhouse-gas pollution by 2030, but passing climate-friendly legislation remains an uphill battle. Democrats’ razor-slim majority in the Senate and a bevy of other policy priorities stand in the way of more timely action.
Boomers also boast the most financial influence. Boomers held 52% of US wealth, or roughly $68 trillion, by the end of the first quarter, according todata. Millennials held just 5%, or $6.5 trillion. Gen Zers aren’t even included in the Fed’s data yet.
Still, boomers rely on their younger peers to keep price growth in check. The speed at which prices climb is significantly influenced by Americans’ inflation expectations. Boomers’ expectations for year-ahead inflation rose to 5.9% in July, according to the New York Fed. That’s the highest level in data going back to 2013 and suggests inflation will accelerate instead of easing up as most economists expect.
Millennials and Gen Zers exhibit much calmer outlooks. Inflation expectations for younger Americans crept higher to 4% in July, implying price growth will slow over the next year.
Those lax attitudes toward inflation hint at the economic attitude to come. The inflation crisis of the 1970s — which saw skyrocketing prices force drastic action from the Fed — informed boomers’ policymaking and viewpoints for four decades, as GOP lawmakers and even moderate Democrats frequently cited inflation fears as the reason to cut spending on economic aid. Those inhibitions disappeared during the pandemic, and when inflation that the White House and Fed called “transitory” returned, so did the fears of unsustainable social spending.
But priorities, like the times, are changing. Millennials and Gen Zers grew up with “Bill Nye The Science Guy” and recycling drives instead of gas shortages and record-high interest rates. A climate-focused paradigm would likely prioritize lending to environmentally friendly ventures and penalize those contributing to global warming. A carbon tax could drive a nationwide shift toward renewable energy. The government could even incentivize domestic production to curb the use of inefficient cargo ships.
There would be downsides to this. A shift away from pollution-heavy global trade would likely increase labor costs and, in turn, drive stronger inflation. A carbon tax also likely wouldn’t offset the massive government spending needed to build eco-friendly infrastructure like solar farms and vehicle charging stations.
The climate-focused economy, then, won’t be perfect. But it would still be an economy, instead of the apocalypse that the youth fears.