Peak Millenials: The New Pig In The Python?

Demographers describe the baby-boom generation as ”the pig in the python,” which refers to a visual and descriptive metaphor for how a large age cohort (the “pig”) moves through the demographic structure (the “python”) over time. It illustrates the bulge or significant impact this group has on various aspects of society, including the economy, housing market, and social services, as it ages.  Graying boomers now make up the bulk of the python’s tail, however,  enter the new pig: “peak millennials” (PMs). 

“It’s Me, Hi, I’m the Problem. I’m 33”

The New York Times ran a good article today reflecting on PMs — individuals born between 1990 and 1991 who are part of American history’s most significant demographic cohort. The piece narrates the life decisions of PMs, noting how these often coincided with broader trends among their peers, such as attending college during a time of record matriculation rates, moving to urban centers, struggling with student debt, buying homes during a housing market surge, and marrying in a year with a high number of weddings.

The narrative underscores this demographic’s economic and societal impact, illustrating how their collective actions have shaped market trends, real estate dynamics, and cultural shifts. The article delves into the challenges and pressures of being part of this densely populated group, highlighting the effects on housing, education, employment, and family planning while also touching on broader implications for future economic conditions and social structures.

Key Points:

• “Peak millennials” are individuals born around 1990 and 1991, who represent the largest age cohort in America.
• Their major life decisions often align with broader generational trends, impacting housing, education, and the economy.
• Peak millennials have shaped market trends, including the rise of the “experience economy,” the popularity of tiny homes, and shifts in fashion.
• Their entrance into higher education and the job market coincided with significant spikes in enrollment and competition for employment, respectively.
• The demographic’s move towards home ownership in recent years has contributed to fluctuations in the housing market.
• Financial challenges, including student debt and the high cost of living, have marked the economic experience of this group.
• The demographic shift is expected to influence future housing demand, with a continued interest in entry-level single-family homes.
• The group’s large size has exerted pressure on various institutions, from colleges to housing markets, reshaping supply and demand dynamics.
• As this cohort ages, it could impact the labor market, potentially benefiting younger generations with less competition for jobs.
• Long-term economic and societal implications include potential challenges related to retirement, healthcare, and generational support structures.
• The size of PMs is not large enough to bail out social security and medicare.

Comparative Demographic Pyramids:   1980 vs. 2020

Driving Ms. Deficit

Social Security and Medicare are the primary factors contributing to escalating federal budget deficits and debt, as indicated by the charts below using data from the Congressional Budget Office (CBO). The total expenditure for these two senior programs is expected to surge from $2.35 trillion in 2023 to $4.46 trillion by 2033. At that point, Social Security and Medicare expenditures will quadruple the national defense spending.

Dependency Ratio

The dependency ratio is a measure of the number of dependents aged zero to 14 and over the age of 65, compared with the total population aged 15 to 64. This demographic indicator gives insight into the number of people of non-working age, compared with the number of those of working age.

It is also used to understand the relative economic burden of the workforce and has ramifications for taxation. The dependency ratio is also referred to as the total or youth dependency ratio.

China Age Dependency Ratio: Older Dependents to Working-Age Population