Economic Disparities Between Generations in the US and Europe

The idea behind the concept of generations is that people born at a certain time share similar experiences, which in turn shape common attitudes.

The "Greatest" and "Silent" generations, born in the early decades of the 20th century, witnessed economic adversity and global conflict, forming relatively leftwing views. Baby boomers grew up accustomed to growth and prosperity, leaning strongly conservative.

Millennials entered adulthood in the aftermath of the global financial crisis, confronting high unemployment, anaemic income growth, and ballooning house price to income ratios. They championed strongly progressive politics.

A lot of analysis treats millennials and Gen Z as close cousins, united in their struggle for prosperity. However, the validity of this view depends on context.

Millennials across the western world experienced economic malaise together. From the US and Canada to Britain and western Europe, those born in the mid to late 1980s faced weak or stagnant wage growth and declining home-ownership rates.

Absolute upward mobility -- how much members of one generation earn compared to their parents' generation at the same age -- steadily fell. In the US, by 30, those born in 1985 had an average income only a few per cent above that of their parents, a significant decline from the 50 to 60 per cent gains made by those born in the 1950s.

Both sides of the Atlantic share a narrative of millennial malaise, indicating they may be the most economically unlucky generation of the past century.

However, for young adults in Britain and most of western Europe, conditions have only worsened since then. Britons born in the mid-1990s have seen living standards decline, presenting a bleak outlook for the youngest adults.

Conversely, in America, Gen Z are advancing. US living standards have grown at an average of 2.5 per cent per year since the late 1990s, offering this generation more upward mobility and rapidly improving living standards compared to young boomers. Gen Z Americans are also outpacing millennials in home ownership.

In the US, the decades-long slowdown in generation-on-generation economic progress appears to have reversed. Americans born in 1995 enjoy more upward mobility relative to their parents than those born in 1965.

These changing economic trajectories raise sociological questions regarding the impact of borderless social media narratives on young adults. Can the narrative of young adult adversity withstand the reality of America's Gen Z? Moreover, how will this affect young Europeans confronted by social comparisons?

Politically, will the youngest American voters pursue their own path? The support garnered by both young men and women for Donald Trump suggests a shift. A group perceiving itself as winners may abandon the social solidarity instincts held by their less fortunate predecessors.

In an era of "vibe shifts", the change from downward mobility to rising prosperity may become the most significant one yet. This divergence in sentiment across the Atlantic could spotlight Europe's quest for its own economic uplift.

The restart of the economic conveyor belt in America could prove to be a hugely significant moment.