• HEDGEYE’S MARKET BRIEF
    Our FREE Investing Newsletter
    Get Exclusive Summer Sale Discounts

    By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails. Not available for current subscribers to that product. Use of Hedgeye and any other products available through hedgeye.com are subject to our Terms Of Service and Privacy Policy New users only.

Takeaway: An interview with Neil Howe on why Boomers and Xers get it all wrong.

Editor's Note: In recent years, the media landscape has been particularly harsh toward Millennials. Whether Millennials are at school, in the workplace, or at home, their behavior is confounding older generations—prompting many to label this generation as entitled, narcissistic, and lazy. But most of these widely held views betray ignorance about who Millennials really are.

Hedgeye interviewed Demography Sector Head Neil Howe to set the record straight on who Millennials are and why they act the way they do. Below is the final part of a three-part interview. Here, we dispel other commonly held notions about Millennials—and explain why they don’t fight back.

See here for parts one and two of the interview.

Hedgeye: We closed last time by debunking the myth that Millennials are job-hoppers. They may not all be looking for a career shortcut, but aren’t Millennials still lazy compared to previous generations?

NH: Not at all. Millennials are all about by-the-rules achievement. They’re accustomed to checking their boxes, earning their gold stars, and gathering their credentials. No generation in history has willingly submitted itself to so many exams along the way. Look for example at the rise Advance Placement testing: Data from the American Enterprise Institute show that, from 1990 to 2013, the share of high school grads with AP course credit rose from 12% to 39%. College Board data show that more than 2.6 million high school students took an AP exam during the 2015-16 school year—nearly four times the amount during 1998-99, the last year that Xers were high school seniors.

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 3) - howe1

Additionally, by 2015, Millennials hit the latest of several record-breaking high school graduation rates (now at 83%). That same year, similarly, they boosted the share of 25- to 34-year-olds with four-year college degrees to the highest in U.S. history. All this, despite skyrocketing college costs.

While some (like The Dumbest Generation author Mark Bauerlein) argue that Millennials aren’t as smart as their elders, all evidence points the contrary. According to the National Assessment of Educational Progress, the lowest recorded scores in the history of the survey were recorded by children born between 1961 and 1965—that is, early-wave Xers. They have since risen for Millennials.

The same goes for SAT scores, which hit their all-time low in 1980 (when they tested the 1963 birth cohort). Ever since, SAT scores have risen—with today’s teens doing better on the math portion than any Boomer or Gen-X cohort born since 1955. This is remarkable, since a much larger share of all high school students take the SAT test than when earlier generations were in school.

Hedgeye: Sure. But does performing well on exams really tell you about how smart Millennials are in real life—like in conversation or at work?

NH: Well, if you don’t believe the test numbers, you can take a look at what they choose to do with their free time. As we’ve discussed before, Millennials are reading more than older generations. To be sure, the vast majority are reading for school or for work. But they’re also equally likely to read “for pleasure” or “to keep up with current events.” In fact, a 2012 Pew study revealed that nearly one-third of The New York Times’ readership is between the ages of 18 and 29. The Economist and The Wall Street Journal boast similar figures. This is not the reading fare of the dumbest.

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 3) - howe3

For most Millennials, the “gateway drug” to their reading habit was the epic Harry Potter series, which made lengthy books popular. Fully 48% of 18- to 34-year-olds claim to have read at least one of these massive novels—and 32% say they’ve read the entire series, which totals some 1.1 million words. That’s nearly double the length of War and Peace. So what’s this again about Millennials and deferred gratification?

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 3) - howe2

Hedgeye: OK, I get it. They’re readers. But what about just everyday skills?

NH: Well, here I’d say it’s a wash. Like most rising generations, Millennials are worse at some things, better at others. Clearly, they’re worse at things that people don’t really have to do anymore—like build a radio or tune a car or handwrite a letter or read a map. Some of these are real losses. We know, for example, that note-taking by hand aids learning retention and that internalized maps help us intuit our surroundings.

On the other hand, they’re generally better at systematic ratiocination, or what we might just call thinking by means of nonstop menu-driven decision trees. They sync their phone calendars to coordinate events with friends. They research restaurants beforehand to see if the menu has options for people with restrictions. They check the Metro website for the next train so they can minimize their idle time. They download banking or health or sports apps that deluge them in performance parameters—bars and dials all updated in real time.

Evidence that younger generations are indeed smarter than older generations in this sort of systematic thinking comes from the famous Flynn effect, the finding that successive birth cohorts show a slow but steady rise in average measured IQ. This rise is especially noticeable in test items thought to be immune to cultural background, such as pattern recognition and category matching. It is also thought to be positively correlated with education, contact with technology, and urbanization. Millennials of course have more of all of the above.

Sometimes, sure, Millennials are too smart for their own good. Blind faith in mobile tech can steer you over a cliff or leave you helpless in a winter snowstorm. But to conclude, across the board, that Millennials are simply dumb is just perverse. It makes no sense at all.

Hedgeye: Wow. I think we’ve covered a lot of ground. Tell me, what impels older people to come up with these passionate put-downs of younger people?

NH: Every generation is shaped differently by history. Every rising generation brings with it new and different priorities. And every older generation feels threatened when they sense these new priorities could push their world in an unfamiliar direction. That leads older generations—especially older generations that are top heavy in values and attitude, like Boomers and Gen Xers—to fight back.

In a nutshell, that’s what’s happening.

But I can’t emphasize it enough: There’s no such thing as a good or bad generation. Every generation is a mix of good and bad, with its worst traits typically being the “shadow side” of its best traits. Boomers are principled visionaries, but their crusading impulse can lead them to destroy what they cannot rebuild. Gen Xers are resilient free agents, but they aren’t known for their cooperation skills.

Millennials, in turn, have their own strengths, including some—like optimism, patience, and teamwork—that America probably needs right now. They will also struggle with their weaknesses, such as their difficulty with risk-taking, cultural innovation, individual leadership, and the ability to go against the grain.

Amazingly, amid all the sneering pejoratives hurled at this generation, very few of them even come close to identifying areas where Millennials really may face challenges. Generation Snowflake just doesn’t work. If we are going to complain about the next generation, we should at least do it correctly.

Hedgeye: So one final question: Why don’t we hear more Millennials responding to these critics?

NH: That’s a great question. I’ve often asked Millennials why they keep quiet when they hear ranting older people say things they know aren’t true. The usual response I hear is “why bother?” or “I just wait until it passes.” Having grown up hearing their parents’ generations argue about everything, they see no point in arguing with 60-somethings who would rather die than ever admit that they might be wrong. Millennials have spent a lifetime learning to agree with opinionated parents just to pacify them.

Boomers, by contrast, have been generational aggressors all their lives. In their youth, they famously put their parents’ generation on trial and found them guilty. (And when public policies didn’t please them, they responded with “Days of Rage” that convulsed America.) Now that Boomers are older, they’re often still the aggressors, only now the target they don’t trust isn’t “anyone over 30”—it’s anyone under 30.

People complain that social media is helping to polarize America politically. Where is the evidence for this assertion? Today, in fact, political polarization is postively and strongly correlated with age—and therefore negatively correlated with social media engagement. According (again) to Pew Research, Americans over age 55 have the largest shares holding "strongly held" views either on the right or the left—and Americans under age 35 are most likely to say they are "moderate," "in the middle," or (disarmingly) "not sure." Back in the days of Woodstock, the "truthy" know-it-alls were young. Today, they're old. 

And this touches on yet another strength of Millennials: They let drama blow over them so they can stay positive. Or maybe they laugh about it on a late-night skit. “Keep calm and carry on” is a Millennial motto—as well as “Haters gonna hate,” maybe delivered with a shoulder shrug. Memo to Fox News and MSNBC: No one under age 35 watches news shows featuring angry talking heads. And twenty years from now, thanks to Millennials, I expect that the whole mood of American public life will become a lot more upbeat, a lot nicer, and (yes) even a lot more decorous than it is today. I for one look forward to that—all the haters notwithstanding.