Don’t Pit Generations Against Each Other

Whatever the economic inequalities between baby boomers and millennials, there has never been a better time to be young

Economy Features Modern Life Social Affairs

The millennials versus the baby boomers: Students demonstrate against education cuts and tuition fees in November 2015 (©Rob Stothard/Getty Images)

“The ultimate test of man’s conscience may be his willingness to sacrifice something today for future generations whose words of thanks will not be heard.” So said former United States Senator Gaylord Nelson. He was alluding to the timeless issue of intergenerational tensions that are passed from grandparent to parent, from parent to child.

Although George Osborne has shelved the next stage of his “pensions revolution” which he was due to unveil in his latest Budget, the issue will not go away. There is a growing sense of cross-generational dissatisfaction, exacerbated by the media, quick to report that today’s “millennials” — those born between the early 1980s and the early 2000s, also known as Generation Y — are the unluckiest generation since the Second World War, while people nearing pension age find the welcoming horizons of retirement receding ever further.

Aggravating factors include economics; advances in science and technology; shifts in cultural attitudes; and the proliferation of communications. The reason the argument is taking a critical turn now is because the British population is swelling — and fast.

According to the Office of National Statistics, we have grown by more than 10 million people since 1964 (an overall population increase of 18.7 per cent) and approximately half of this growth has occurred in the last 15 years. Not only are we growing in number, but we are getting older. A recent government report stated that ten million people in Britain are over the age of 65 and that this number will have nearly doubled to approximately 19 million by 2050. And as the number of elderly citizens rises, so too does the number of very old citizens. There are currently more than three million people over the age of 80, and if current patterns continue this figure will have almost doubled by 2030.

The demographic shift is largely due to improvements in healthcare. The changing face of the British population compounds the increasing pressure on the younger generation to support the old in the long term.

Consider the financial implications of these demographic changes: an ageing population will place a heavy financial burden on the state. Some 65 per cent of Department for Work and Pensions benefit expenditure goes to those in retirement. If the population increases at the current rate, the government will need to spend an additional £10 billion per annum for every additional one million people in the retirement age bracket. How will it do this? By taxing those in work — in other words, the middle-aged and the young.

The first baby boomers have themselves joined the ranks of pensioners. I asked boomer Alexander Gregory, a father of five, what he thought the effects of an ageing population would be on his offspring. “We don’t know but we must find out. There is a huge need to really think about the challenges it will bring both on a macro and micro basis, and to start working on policies to react to those challenges. Everyone pays lip-service to this problem but the state is not really working on it. Adopting a wait-and-see policy will lead to reactive short-term planning rather than suggesting solutions for the next 50 years. Long-term planning will lessen the burden for young people.”

It is plain to see why millennials are feeling the strain: not only are they working away with no end in sight (the state pension age is rising: currently at 65 for men and 63 for women, it is predicted that the retirement age will be 67 for all by 2026) but they are also working to support an ageing population. On the surface this may seem both unjust and economically troubling, but dig a little deeper and the problems aren’t quite as burdensome as they initially appear. The population has been ageing for decades now; previous generations were faced with the same dilemma. The working population has increased as well, so there are more people putting money in the pot.

Generation Y gets a mixed press; some are sympathetic to their plight while others label them as “lazy”, “unrealistic in their aspirations” and “demanding”. But it is certainly true the cost of living has made life harder for young professionals today than ever before, particularly when considered alongside average earnings. Property is the only investment that seems both secure and worthwhile, but with ever-rising living costs, saving for a deposit on a home is, for many young people, a pipedream. So graduates are increasingly forced to return to the family home: according to the ONS, the number of young adults aged 20-34 living with their parents has increased by 25 per cent since 1996; 3.3 million of them now live at home.

Ed Howker, journalist and co-author of Jilted Generation: How Britain has Bankrupted its Youth, says: “The economics are quite clear. It’s clearly disproportionately expensive to be young and to try and get a roof over your head in the UK now, more than it was a generation ago, even several generations ago.

“At the end of the day, the state is responsible. It’s difficult for schools and pupils to work out what they need to do to make themselves more relevant in this labour market. Anything we can do to improve the market signals between these two sections would be really helpful.”

The government has recognised young people’s wish to secure their future by investing in property. In 2013, it introduced the equity loan Help to Buy scheme. By 2014, it had allowed 53,000 households to buy a home with a fraction of the deposit they would normally require. A year later, the Rent to Buy Scheme was introduced. The government said it would “boost building of new rental homes that will also help hard-working people later upgrade into home ownership”.

But is this assistance enough? Katya, a 23-year-old graduate who lives in London, thinks not. “It is totally impossible to get on the housing ladder,” she declared. “The only people that I know who have managed to do so have had help from their parents. The rest of us have just given up and accepted that we will be renting for the rest of our lives. Buying a house in London isn’t an option that anyone my age can even consider, unlike the previous generation, who presumed that getting a house was a rite of passage. The sad reality is I am never going to be able to afford a house.

“Help to Buy isn’t as viable as it sounds — in fact it is quite restrictive. It’s a good idea, but doesn’t translate in practice. I still can’t afford to participate in the scheme, even on a London salary.”

It is clear why some young people feel that the world is against them, and life was better for their grandparents. However, resignation will not solve their dilemma. A change in attitude is required. We are conditioned to believe that owning bricks and mortar is the most tangible way of securing one’s future, but Switzerland’s home ownership rate is 44 per cent, compared to Britain’s 64.8 per cent. If we followed suit, savings could instead be invested in emerging businesses.

On top of financial worries, technological advances, travel and communications are all creating social change, which means that our behaviour is altering alongside socio-demographics — and it is more complicated to measure.

The internet is the most palpable indicator of change. In 2014, Ofcom released a report that found one in three children in the UK aged 15 or below had their own tablet, a figure that had doubled in the 12 months preceding the report’s publication. In the same year, the ONS found that 97 per cent of households with children had internet access. And it’s not just the young: 76 per cent of adults in the UK access the internet every day. What are the implications in terms of intergenerational tensions?

The proliferation of internet usage is not the only indicator of change: the ways in which the internet can be used is more indicative of how the world is changing in favour of the young. The internet is something of a Sargasso Sea, separating workers and pensioners, which widens as its possibilities multiply. Originally designed to ease communications, web applications now enable users to function with extraordinary convenience: one can order food, book transport, control finances and shop online simply using mobile telephones. The rapid increase in apps and their usage has given birth to a new wave of start-up businesses and the renaissance of the entrepreneur, particularly among the young: recent research found that the number of under-35-year-olds starting businesses has increased by more than 70 per cent in the last decade.

Howker concedes: “This is a fantastic time to be alive. Anyone who says otherwise is clearly missing those improvements.” Along with technology and communications, ease of travel increases year on year, meaning that we can trade, and access lifestyles that were previously unimaginable. Traffic to, from and within the United States is predicted to grow at an annual growth rate of 3.2 per cent, says the International Air Transport Association. Cheap flights and package deals make holidays more accessible to all.

Social strategist Paul Flatters argues that there has never been a better time to be young. “Young people live longer lives, they are likely to be healthier and because of many of the wonders of life in the 21st century, they will enjoy a much more varied, richer life.

“If we think today’s young people are having a difficult time, it begs the question: when did they have a better time?”

Lydia, a third-year History undergraduate at Edinburgh University, says: “I think there is and always will be criticism of younger generations by their elders, and I can see that due to the era of globalisation and massive technological revolution that we live in, the divide could get bigger.”

But she argues that the “old vs. young” argument was largely sensationalised, and expresses general contentment with her lot. She sees tensions as simply a matter of perception and perspective: “Freedom of movement in the EU, for example, can be seen either as an opportunity, for someone to live and work abroad with ease, or as a way that opportunities are taken away from one nationality and given to another.”

Lydia is optimistic despite obvious obstacles, such as student debt. “After university, I know that the job market is pretty tough, but I also think that while at university people could spend a lot more of their time contributing to their resumé while being happy and productive members of society. The increased difficulties of employment should encourage this, and not moaning. We are, when you think about it, one of the luckiest groups alive today.”