Youngsters are worse off than their parents: The sorry lot of today’s youth is worrying and urgent

 
Annabelle Williams
Follow Annabelle
University Of Birmingham Hold Degree Congregations
The young graduate with debts in the tens of thousands (Source: Getty) (Source: Getty)

Intergenerational equity does not make for the punchiest headline is one of the most pressing economic and social issues facing the UK today.


The concept of fairness between generations was previously confined to academia and environmental circles, where the idea that man’s actions will mean passing on a damaged ecosystem for future people has been discussed at length. But now injustice between the generations is prevalent in so many areas of life that the concept is becoming harder to ignore.

Today’s generation of young adults are facing economic circumstances radically different to those of their parents. The old economic assumption that each generation would be better off than its parents has been shattered.

Read more: Government minister says society isn't unfair to young people

Where the older generation were paid to go to university, the young graduate with debts in the tens of thousands. Unpaid internships are now essential to break into many fields, and job security has dwindled. While today’s retirees can rely on generous and predictable pensions, employers have pulled back from defined benefit schemes, and the state too is limiting its pension provision. The onus for future retirees will be firmly on self-sufficiency. Previous generations could buy a home at a small multiple of an average salary, but now house prices have risen far beyond the reach of many.

These changes are having the most impact on those born between 1980 and the year 2000, known as millennials. Their parents’ generation was too young to have experienced the second world war, post-war austerity or the Great Depression. But millennials’ prospects have been impacted by another major world event: the first cohort were aged 27 when the global financial crisis kicked off in December 2007.

The White House has discussed the crisis’s impact on this demographic in a report: “Their early adult lives have been shaped by the experience of establishing their careers at a time when economic opportunities are relatively scarce.... The recession still affects the lives of millennials and will likely continue to do so for years to come.”

To anyone who complains of the fresh difficulties the young face in housing, pensions and education, the riposte is always that there is no money, and no way we can pay for our young to share in the privileges their parents enjoyed.

This is the message passed down from those in their 50s and 60s, the policy makers and gatekeepers who balance the books and make the laws. It seems strange that a country even richer now than it was 40 years ago – and still among the richest in the world – cannot find the money for intergenerational justice. Perhaps it’s not that we can’t pay, but won’t.

This seems odd, since most parents want to give their children the best in life. Many people I have spoken to express concern at how much more difficult it will be for their children to forge their way in the world.

Leading economist John Kay calls this “the bizarre paradox of perverse collective action” – individually parents want the best, collectively they make laws contrary to the interests of the young.

“Intergenerational fairness is undermined if policy makers choose systematically to disenfranchise one generation in order to favour another,” says the Intergenerational Foundation, a think tank which researches fairness between generations.

“Sadly this appears to be happening today as successive governments have chosen to give priority to the interests of older people while disregarding the interests of [the] younger.”

Failure to tackle intergenerational equity now means kicking the can down the road and creating a new set of problems for society to cope with later. If millennials can’t get on the housing ladder, where will they live when they are too old to work? How will they save for a proper pension when rents take an increasing chunk of monthly income, and who will support them without decent savings? These questions, and many others, are yet to be answered.

It’s a clunky and unsexy phrase, but intergenerational equity is urgent and it deserves discussion.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

Related articles