Is “Total Boomer Luxury Communism” Ruining America?

Multiracial group of happy senior people taking selfie with cell phone in nursing home.

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Young and old have blamed each other for America’s problems for generations. Older generations think younger ones are lazy, immoral, ignorant, and destined to ruin the country. Meanwhile, younger folks think older generations had it easy and are out of touch with today’s challenges. A new slogan coined by my colleague Russ Greene that captures this feeling among Millennials and Gen Z is “Total Boomer Luxury Communism”. The idea behind it is that older people, primarily well-off Baby Boomers, are hoarding opportunities and resources while the young struggle to buy a house and support the generous Social Security and Medicare benefits the richest Boomers expect. The Baby Boomers may not like this, but the younger generations have a point.

Baby Boomers, those born between 1946 and 1964, are not responsible for all the world’s ills, but they are at the center of some significant problems in the United States. Housing is a good example. America has a massive housing shortage, as many as 15 to 20 million units according to one estimate. This shortage is pushing prices up across the country, leaving many younger homebuyers on the sideline. One recent survey found that 22% of Millennials are so discouraged by high prices that they have given up on purchasing a home. Nearly one in five adults ages 25 to 34 live with their parents, in part due to the high cost of housing.

The slowdown in construction that precipitated this shortage began in the late 1970s. Housing starts fell from over 50,000 per million people in the 1970s to just over 40,000 per million for the next three decades. In the 2010s, starts plummeted to just over 21,000 per million people.

One big cause of this decline was stricter zoning and land-use regulations. Cities across the country implemented regulations like minimum lot sizes, density restrictions, and parking minimums that made it more expensive to build housing. Coastal cities in California and the Northeast acted first, but in recent years cities across the South, including Atlanta, Phoenix, and Miami, started following the same playbook and their housing prices are rising accordingly. In 1980, the median home price-to-income ratio in the Phoenix area was three, meaning housing was affordable for most families. Today, it is over six, which is not much lower than the ratio in the New York City metropolitan area.

Cities also slowed the permitting process down using discretionary review rather than by-right development. Discretionary review gives government officials the power to add conditions or deny projects through a public review process. By-right development means that as long as a project conforms to local rules laid out in advance, it can be built without additional approval. Research shows that by-right projects are permitted faster than projects subject to discretionary review, which means lower building costs and ultimately lower prices for consumers.

So how do Boomers fit in? First, they are an influential voting block. The 65 and older age group has the highest voter turnout rate, meaning political candidates often listen to what they say. Higher earning residents ages 55 and over are also more likely to contact their local officials than younger folks. And what these older, wealthier homeowners tend to tell officials is they do not like new development. A study that analyzed planning and zoning board meetings in the Boston area found that 63% of the submitted comments opposed new housing development, while only 15% were in favor. It also found that the average age of a commenter was 58, while the age of the average voter was 50. This is evidence that older people are the loudest voices in discussions about new housing projects.

The Trump administration’s recently proposed 50-year mortgage is another sign that Boomers (Trump is one) are more interested in hiding the housing problem than solving it. The fundamental reason housing is so expensive is because there is not enough of it. A 50-year mortgage will lower monthly payments, but it does not make housing cheaper or easier to build. It just spreads the high cost of housing over more years. A 50-year mortgage may even raise prices by stimulating demand while supply remains constrained by onerous regulations.

Put all this together and it does appear older generations are contributing to the housing problem that is preventing younger people from buying homes and starting families.

Housing reforms that boost supply are not the only policies Boomers oppose. The Social Security trust fund is projected to run out in 2032, which will cause a 24% cut in benefits across the board. Everyone who studies Social Security knows it is not sustainable, and this has been known for decades. Yet every time someone proposes reforms, the AARP—many Boomers are members—and similar groups are quick to attack. As a result, Social Security has become the third rail of politics.

The depletion of the trust fund may finally force changes, and there are two broad ways to fix Social Security—either reduce benefits or raise revenue. Options to reduce benefits include changing how benefits are indexed to inflation and raising the retirement age. Potential revenue raisers include increasing the payroll tax rate and increasing the amount of income subject to the current tax.

A recent survey from the Cato Institute reveals a generational divide between raising taxes and cutting benefits. Gen Z wants to reduce benefits rather than raise taxes, while Baby Boomers would rather raise taxes (see figure below). This is not surprising, since any tax increase would fall on younger workers who pay for the benefits of older retirees. In essence, Baby Boomers prefer to tax Gen Z and Millennial workers to make sure they get their benefits.

Baby Boomers likely think this outcome would be fair because they earned those benefits through their Social Security contributions. But while they did pay into the system, they did not pay enough. The average retiree gets more in benefits than they paid in, a disparity that will worsen over time. Medicare suffers from the same problem. This is why America’s entitlement programs are broken: People want more in benefits than they pay in taxes, and they are happy to let future generations figure out how to close the gap.

Another way to strengthen Social Security is to increase the number of workers. More workers mean more Social Security revenue and more economic growth. When Social Security started there were four workers for each beneficiary. Today there are 2.7, and that number is projected to decline. Baby Boomers bear some of the blame for this. Between 1973 and 1988, when many Baby Boomers were in their peak childbearing years, the U.S. fertility rate was below two. Fewer children back then mean fewer workers today to support retirees’ generous Social Security benefits.

It is too late for Boomers to have more children, but more immigration would also provide more workers. Unfortunately, Boomers are again on the wrong side of the issue. In a Pew Research poll from last December, only 19% of people 65 or older said they wanted to increase legal immigration, while 50% of people aged 18 to 29 supported an increase.

The wealthiest Baby Boomers do not want to make life more difficult for their children and grandchildren, but many of their policy preferences do just that. They are vocal opponents of new housing construction that would expand supply and improve affordability. They refuse to compromise on Social Security reforms that would better align spending with revenue. This may not be “Total Boomer Luxury Communism”, but it does not seem right.