Have young people never had it so bad?

 
student protestors

Rising wages and low house prices helped the baby boom generation to prosper. Today's young face high unemployment, expensive education, and a lifetime of renting. Have they never had it so bad?

Let's take a typical 24-year-old everyperson. This person lives in Nottingham.

There's a one-bedroom flat they want but it costs £120,000. You need a salary of more than £25,000 to get a mortgage for that.

But this everyperson has no salary. They're one of the 18.5% of people aged 18-24 in the UK who are out of work. Our 24-year-old has a degree and a £25,000 debt to pay off from university.

The everyperson has moved back in with their parents, part of the "boomerang adultescents".

A job is the most pressing requirement but many of those are now going to older workers. The over-50s accounted for 93% of the job increases over the last decade, according to analysis by investment bank Citi.

And there's the growing number who put off retiring. Working people of pension age have nearly doubled over the last two decades, reaching 1.4 million in 2011, according to the Office for National Statistics.

In 1957 Harold Macmillan declared: "Most of our people have never had it so good."

Today no politician would utter those words.

Yet there's a growing belief that the generation of baby boomers born in the two decades before 1965 were lucky to live when they did. Houses were easier to come by when young and rocketed in value. Pensions were generous. Unemployment was mostly low. Now, aged between 50 and 70, they have had it pretty good.

The question for today's young might be, have they ever had it so bad?

Baby boomers: From cradle to retirement home
10 babies on a bed Boom time: A sharp increase in births after World War II created the baby boomer generation, born into an era of unprecedented peace and prosperity.
Baby sitting on a Rolls Royce Roll with it: Babies born between 1948 and 1964 entered an age of such stability that they have subsequently been described by some as self indulgent.
60s teenagers in a record shop As teenagers in the 60s, baby boomers could look forward to jobs for life and plenty of disposable income. Did this foster an early sense of entitlement?
A 1980s couple pose in front of house and car The 80s saw the last of the baby boomers grow up and go to work. It was the era of Wall Street, the "big bang" in the City and rocketing house prices.
Tony Blair and Bill Clinton Tony Blair and Bill Clinton: Archetypal baby boomers who grew up to rule their respective nations in the 1990s and 2000s.
Fiftysomethings drinking champagne Many baby boomers now enjoy a lifestyle that the younger generation can only dream of. They are also working longer and, some say, blocking jobs.

There have been eras indisputably worse. A whole generation went to war in 1914 and 1939. There was the hunger and unemployment of the Great Depression. And child labour in Victorian times.

But take 1963, the year that marked the end of national service and the rise of the Beatles, and you have an interesting cut-off point for comparison. Is 2013 the hardest time for young people in the last 50 years?

Today, for the first time, a person in their 80s has higher living standards than someone working in their 20s, the Financial Times reported in October 2012.

Rally in November 2012 against sharp rises in university tuition fees, funding cuts and high youth unemployment Protest against rising fees and youth unemployment

A student who started university in 2011 will graduate with average debts of £26,000 and bleak career prospects.

And even the lucky ones who get good jobs face a lifetime of renting, unless the "Bank of Mum and Dad" is willing and liquid enough to help out.

Baby boomers born in the 1940s to mid 60s bought their first home when prices were low and watched property prices shoot up as house-building slowed while the population rose. There was relatively low unemployment up to the 1980s and again in the 1990s and 2000s.

Wages rose. Low inflation and globalisation kept prices down. They got generous pensions.

There was poverty too, but those middle and top earners flourished. They are the lucky generation. So goes the theory.

It's not just young agitators saying this. In 2010, Conservative frontbencher David Willetts, born in the late 1950s, tackled the subject in his book The Pinch. It is subtitled "How the baby boomers took their children's future - and why they should give it back."

Graph showing rise in average age of first time buyers, 1974-2012

Willetts pointed out the crucial role of demography.

When births spiked after the war, it was thought this new generation would struggle due to the competition for jobs and resources.

But the reverse turned out to be true. Being a big generation meant faster economic growth and more lobbying power. "Our slice of the pie might be smaller but the pie will grow faster than in the lifetimes of other cohorts," Willetts explained.

Unemployed protesters walked from Tyneside to London, tracing the footsteps of the famous Jarrow Crusade of 1936 Unemployed young people re-encted the Jarrow Crusade in 2011...

And the baby boomers are living longer, creating an imbalance between workers and retired.

It means our putative 24-year-old faces a future of a small working population supporting a large number of elderly people.

By 2035 it is projected that those aged 65 and over will account for 23% of the total population, up from 15% in 1985.

Despite austerity, the state pension has been bolstered, winter fuel payments are outside the reach of means testing, and free bus pass and TV licence retained for the elderly. At the same time the government has cut benefits in real terms and axed the Education Maintenance Allowance in England.

Jarrow Crusade in 1936 ... 75 years after Tyneside's unemployed shipyard workers marched on London

Pensioners have traditionally been portrayed as vulnerable or deserving. But it is time for a rethink, campaigners say.

In October 2011, a new group, the Intergenerational Foundation, argued that older people were "hoarding housing" and should be encouraged to downsize.

"Older generations own more than two-thirds of the nation's housing stock," says Angus Hanton co-founder of the foundation. "They have rewarded themselves with unaffordable pensions and intimidate policy makers through sheer cohort size and lobby-power."

Previously in the Magazine

Houses in Bradford

One solution is to free up family housing by offering elderly people tax breaks to move into smaller homes. The Intergenerational Foundation says more than a third of the housing stock is under-occupied, which means at least two spare bedrooms.

TV property show presenter Kirstie Allsopp says it is not fair to pick on the elderly as they usually want to hang on to their homes for their children's sake.

"It's not house hoarding. This is their home," she says. "A lot of that generation have done far more in life and taken far less than we have."

It's dangerous and misleading to talk this way, argues Dot Gibson, general secretary of the National Pensioners Convention. Poverty rates amongst the under-25s and the over-65s both stand at 20%. There are also many shared concerns between young and old such as a lack of suitable housing, she says.

"What this artificial generational conflict fails to recognise is that different generations are already helping out each other inside the family - whereas the real division in our society is between rich and poor."

Gibson alludes to the unofficial redistribution of wealth of parents helping children with their mortgage. But a report for the Resolution Foundation On borrowed time? argued that while bequests like this will play a role, many elderly people may consume their wealth rather than passing it on, especially for long-term care.

"Given that it is lower-income pensioners who are most likely to need to draw down their housing equity in this way, we might expect their [often] lower-income families to be less likely to benefit from inheritance," the report predicted.

It comes down to fairness, says James Sefton, professor of economics at Imperial College Business School, who has done economic forecasts at the Treasury. Government debt is stacking up for the young. Meanwhile those born 1945-65 have lived through times of unprecedented plenty.

"If you think about the baby boom generation they lived through peace and unparalleled prosperity. You'd struggle to explain why that generation should be able to leave huge debts to the next generation."

View from the streets

Sophie Leonard, producer of BBC Three's People Like Us, filmed in Manchester:

In 2004, Harpurhey in Manchester was labelled the most deprived neighbourhood in England after scoring lowest in an Indices of Deprivation report. Things have definitely improved, but 50% of adults there have no GCSEs or higher qualifications and it is still considered a high crime area.

But what is life really like behind the headlines and government statistics?

Life can indeed be tough for the young residents, but it's simplistic to assume that this is the experience of everyone in the area. Many of the people we met were resilient, resourceful and ambitious young people determined to make the most of their lives, or turn difficult pasts around - from 20-something entrepreneurs who had set up their own businesses, to aspiring dance teachers and single mums committed to giving their kids happier childhoods than their own.

And they were often doing so with captivating wit and enthusiasm.

So why are the young not taking to the streets?

They're too busy trying to get by, argues Caroline Mortimer, a recent graduate. "We're aware of the problems of an ageing population. But we can't think about pensions and buying houses because we've got to get an actual job and pay the rent."

She argues that the notion of "respecting your elders" may also have blunted the desire to take on the baby boomers. And there's still an attitude that young people are "ungrateful", she believes. "Older people are worried about their own children but not other people's kids."

And, of course, while the economic situation may look grim, young people do have some advantages over previous generations.

Their world has opened up massively. Expectations are that young people will start work and settle down later. This leaves them free to travel and the costs are much lower than 50 or even 30 years ago.

A return flight to Johannesburg might have cost £500 in 1980. By 2008 it was £505, which allowing for inflation was a massive reduction in real terms. A return to Sydney was £716. In 2008 it was £699.

Then there's the field of consumer electronics. In the 1970s and 1980s buying a television was expensive. Having access to entertainment and information was limited.

Computers were exotic and pricey. And that was before you could even go online. "I remember buying my first computer in about 1984," says technology writer Jonathan Margolis. "It was an Amstrad 9512 and cost £400 in Dixons. It was about 6 weeks' wages and considered a huge bargain."

Now you can pick up a laptop for as little as £100. Today nearly all a person's entertainment needs can be found on something that didn't exist 30 years ago - the mobile phone.

But these blandishments may be seen as inadequate compensation for the economic hardships. And baby boomers get the same gadgets and cheap travel.

The generational squeeze hasn't hit home yet, says Sefton. But it's coming. The solution may be for the better off in that generation taking over responsibility for their own health and social care, he argues. Rich countries - Norway, South Korea, Singapore - have set up investment funds to provide for future generations.

You could argue this is just boom and bust writ large. The economy grows, baby booms happen. You can't penalise a generation that was lucky. Willetts, who is now the Universities Minister, disagrees. Demography makes it too big a gap.

"When you look at the hard financial facts of the houses we own and the pensions we've built up, it's a big challenge to the baby boomer generation to which I belong."

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  • rate this
    -3

    Comment number 315.

    My generation had it exactly the same in the 1980s.

    Bullying at my appalling 'comp' led to me leaving school virtually without any skills. Then I had two 'temp' jobs - one the ill - fated YOP scheme- followed by 20 years in a factory which has left me a physical and mental wreck. I tried re educating myself and was smugly told 'no experience'.

    It's just history repeating itself.

  • rate this
    +26

    Comment number 314.

    I joined the job market at 18 applied for 7 jobs all with formal training and was offered 6. That was 1979.
    My father started at 15 in 1955 and moving from job to job with training provided.
    Employers for the last 20 years have wanted the finished article to leave school and be effective from day 1.
    That is the main reason youngsters can't get work Employers unwilling to invest in the future.

  • rate this
    +2

    Comment number 313.

    I'm a 20 something and my graduate employment was only possible with extra training that required informed guidance and money loaned to me by family. The divide is rich and poor, middle class and working class. Cuts have reduced funding for training & careers guidance services. So if my family lacked money and social capital, where would I be? Oh, and I still can't afford to buy a house yet!

  • rate this
    0

    Comment number 312.

    @282 kitchew

    It was no easier in my day - working not whingeing is the key. There is no generational imbalance for those prepared to graft...

  • rate this
    +3

    Comment number 311.

    The young think they are worse off as their expectations are much higher. Too little attention is paid to the financials, such as the impact of over 20% interest rates that we had to endure, the deliberate erosion of pensions by Brown, houses bought by our parents having to be sold to pay for care and the decimation of income due to suppressed savings rates (a key income for the old) and QE.

  • rate this
    +2

    Comment number 310.

    At 31 and single, the only people I know of my age with a mortgage are one friend with a high flying £150k salary and a select few couples on double incomes who have had help from their parents with deposits. For a single person without either of those things, I fear I'm stuck renting until one/both of my parents die, but obviously I'd rather have them around for as long as possible.

  • rate this
    +5

    Comment number 309.

    Willetts himself championed the policy of £9000 tuition fees which is a major factor in the current crisis for 20-30 year olds. Yet he writes a book demanding that the baby-boomers help young people. Sheer hypocrisy/

  • rate this
    +4

    Comment number 308.

    "287.Dan_Dover
    @269.RobinTheBoyWonder
    ".....NOT Baby Boomers."

    Who brought these wonderful people into the world? Who brought them up to value greed and self-interest, with the emotional intelligence of velociraptors?"

    So by your logic you cannot blame the baby boomers since it must be their parent's fault.

    Or does that blaming the parents only apply when it suits you?

  • rate this
    +4

    Comment number 307.

    The thing that annoys me is that the young people who are lucky enough to find jobs don't get the opportunity to invest and save their money as previous generations did. It just gets swallowed up by rent, low interest rates and paying back tuition fees. If they're careful with their money and don't go on holidays it's going to be 10-20 years before the savings start to pay back.

  • rate this
    +4

    Comment number 306.

    @291 Tim A Not just young people. The older generations seem not to have had trouble getting jobs with terrible written English. Half my job involves sense/spelling/grammar checking bid documents produced by people aged 30-60. It should be 10% of my job, but some of them are just that bad. Don't blame bad English for people struggling to find work.

  • rate this
    +3

    Comment number 305.

    House prices are the issue here, I was lucky enough to get on the property ladder in the 90's and bought a average place for 3 times my average salary. Home owners think property prices going up are a good thing, but the only people who benefit are bankers and people wanting to down size. I now have young children and every time my property price goes up i feel like im robbing their generation!

  • rate this
    +3

    Comment number 304.

    Many reasons not to have any children.
    I wouldn't want to raise my kids in this country with the gloomy prospect of a tough life they'll have.

  • rate this
    -2

    Comment number 303.

    Well said, I'd hate to be starting out now. Wages are low, houses unaffordable and you're saddled with a massive debt if you went to university. Sucks to be young. The housing problem is easy to fix though: change planning laws so we don't treat every spot of land with plants on it like it was the last bit in existence and before you know it there'll be houses galore.

  • rate this
    +2

    Comment number 302.

    Those young people who want to work, work, while those who think they are too educated to take lower paid jobs because they were promised better futures should smell the coffee & if they really want to earn their own living, instead of relying on the state to provide meagre comfort at best, will loose out. Anyone with a work ethic can find work!

  • rate this
    +3

    Comment number 301.

    @Tim A - jog on mate. You just generalised the entire young population as being illiterate. I wouldn't have thought that stereotyping is something that a literate and mature person of society would tend to do...

  • rate this
    +2

    Comment number 300.

    We need to consider how best to cope with an aging population. We cannot both complain if they retire and need support *and* object to them working. Preventing ageism against older workers lets them remain self reliant. Given a case is always being made for immigration, it seems that there are jobs around.

  • rate this
    0

    Comment number 299.

    To the youth - this is what our Social Justice ought to be:

    "I keep what I earn and you keep what you earn. Do you Disagree? Well then, tell me how much of what you earn belongs to me - and why?"
    ~Walter E Williams

  • rate this
    +2

    Comment number 298.

    We might have had it good, but it isn't very good now ! politicians have ruined this green and pleasant land ! I want my England back !

  • rate this
    +4

    Comment number 297.

    The big problem is that expectations are so high that everyone expects a managerial job (rather than a trade), a car, foreign holidays, branded clothes and a stack of electronic gadgets.

    However the government should tax landlords (with more than one rental property) more in order to reduce the property empires being created and free up more homes for sale to families.

  • rate this
    +2

    Comment number 296.

    Bastiat
    If that is the line you are going to take then I could say that the young generation that died in the trenches in 1916 had more to complain about than todays young people.

    We are all affected by the 2007 crash. I'm a baby boomer and I'm sure that Mel would not want to go through my early life of sheer poverty We were a lucky generation as viewed now but if that button had been pressed

 

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