An irritating and lazy trope in the media today is the accusation that millennials have killed everything from malls and phone calls to canned tuna, golf and the Toyota Scion. (Here’s a list of 70 things have supposedly “killed.”)
Finally, however, it appears that they may be saving something important enough to absolve them of all that: Social Security.
According to a report from Morgan Stanley, millennials — also known as Generation Y — will soon be joined by Generation Z in the workforce, which will “create a youth boom that delivers a boost to potential GDP, consumption, wages, and housing.”
Since Gen Z (those born between the mid-1990s and mid-2000s and currently 20% of the population) is very similar to its predecessor in terms of values and priorities without much of a generation gap, the two will essentially combine into one super-generation.
The report notes that Gen Z and its large size is often overlooked. When it peaks, it’ll become the largest generation in 2034 at 78 million.
This is a big deal from a macroeconomic, long-term standpoint when it comes to growth, and Morgan Stanley says the Congressional Budget Office underestimates the upside.
Perhaps the biggest takeaway, as the size of the labor force rises quickly in 2020, is that it will delay the date when Social Security becomes insolvent. The latest report estimates the Social Security Trust Fund will become insolvent by 2034 should nothing change. Morgan Stanley’s note estimates this would be pushed back by decades, and would have a similar effect on Medicare.
The bullish demographics, the report notes, are unique to the U.S. The Generation Z population in the U.S. is larger than the rest of the G10 nations.
In a survey the bank commissioned in September of around 6,000 people between 16 and 34, the main difference between millennials and generation Zers coming into the workforce is that the younger cohort is doing it in a much more favorable economic climate with a stronger job market.
The survey also found an auspicious coincidence: Generation Z’s most desirable sectors to work in are health care and tech, which happen to be the highest growth area for jobs in the next 10 years and the sector for which skilled labor is lacking.
Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, retail, personal finance, and more. Follow him on Twitter @ewolffmann.