Baby boomers, the pharaohs of Europe's pension pyramid

Baby boomers, the pharaohs of the welfare pyramid

Is the European welfare state a pyramid scheme with baby boomers as pharaohs? That's what The Economist says, and the metaphor has landed like a slap in the face. The article, published on 28 May 2026 under the title "How the boomers screwed Europe", argues that the rock and roll generation is leaving the bill to its few children. The awkward question is whether Spain is an exception or the next chapter of the same pyramid.

Spain's baby boom is not the Anglo-Saxon one

The first trap in the debate is demographic. The British and American baby boom ran from 1946 to 1964, but Spain's is another story: it ran from 1957 to 1977, with twenty straight years above 650,000 births a year and an average of around 668,000. In total, fourteen million births. Anyone who is 50 today was born in 1976 and, however much many insist on calling them generation X, they are Spanish baby boomers. That nuance changes the diagnosis: here there wasn't a generation that arrived earlier, but one that arrived later and in greater numbers.

Contributions paid and pensions received

The numbers circulating are devastating. If pensioners received strictly what they contributed, those born between 1935 and 1945 would have pensions of 150 euros; those of the fifties, 350; those of the sixties, 650. If that money had been invested, as in funded systems, the figures would multiply by 1.5 or 2. Against that, Spain's gross replacement rate reaches 80.4% for low and middle salaries, among the most generous on the planet. Some respond that those same pensioners retired at an average age of 60 or 61 —those born in the forties— an advantage that will never be repeated.

The vote that holds up the pyramid

The reason no reform succeeds is no mystery either: pensioners vote, and they vote as a bloc. Until their electoral weight drops below a manageable threshold, any adjustment to the system is political suicide. With public debt lurking and long-term rates climbing, proposals range from cutting pensions based on rental income to stripping pensioners of the right to vote. All crash against the same reality: in a democracy, the pharaohs also decide who hands out the stone.

The pyramid holds up as long as the slaves keep paying and the pharaohs keep voting. The problem is that the slaves are fewer and fewer, and the pharaohs live longer and longer. The pyramid scheme, in the end, still stands. The question is whether anyone is left underneath.