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
    +2

    Comment number 955.

    Have young people never had it so bad?

    how far back in history means 'never'? 10/50/100/200/1000 years?

  • rate this
    +2

    Comment number 954.

    903.Commrade_Dave
    Mayna; Actually, these policies stretch back to the 80's. So yeah, your wrong
    -
    if it dates back to 80s then leveller was wrong to claim its current tory fault - as I indicated along with that labour did nothing then as well so faul of ALL govs
    -
    This is an issue of ideaologies, ... self-serving ... fecal matter from them.
    -
    Everyone is self serving, or why go to a sale?

  • rate this
    0

    Comment number 953.

    Here's an idea for unemployed young people: become an undertaker: you will never be out of work and if the demographics are correct, business will be booming before too long!

  • rate this
    +1

    Comment number 952.

    Poverty is partly a question of priorities. Like other baby-boomers, I aimed to get qualified, get a job, find a mate, get a house and have a family - strictly in that order. Nor did any of us think we had the luxury to produce offspring with no one to support them, change partners on a whim or change accommodation frequently as a result. We left that to the born-rich.

  • rate this
    +1

    Comment number 951.

    @ 858."I've never understood why the young are almost universally in favour of higher public spending. ". The argument for 'no more cuts' is largely an opposing view of how best to reduce the deficit based on growth first rather than reckless austerity now. Perhaps the younger generation can manage this economy better than the older generation did for them. I hope this helps your understanding.

  • rate this
    -4

    Comment number 950.

    Hey Baby Boomers, don't forget, we choose your retirement homes!

  • rate this
    -3

    Comment number 949.

    CAMERON is a coward,he & his Tories are waging class war,between the haves & have-nots.
    He will not tax the 'Buy-to-Let' landlords,who buy their properties with taxpayers money,to the tune of £32 BILLION p.a.
    It is a massive fraud on taxpayers,who have to pay for it with Benefit Cuts & tax increases.

  • rate this
    0

    Comment number 948.

    My fellow Baby Boomers would do well to remember who'll be choosing our "nursing" homes when we are too old & doolally to choose ourselves....

    ....we'll soon no longer be an electoral majority & our children & grand children will not give up on ever having a house or a pension to pay for our retirement....

  • rate this
    -3

    Comment number 947.

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

    "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 William

    We are sorry for the socialist welfare nightmare of debt you were born into. We will pay our own debts, you should not have to bear our costs. That is immoral.

  • rate this
    +5

    Comment number 946.

    The one advantage the young have is that retirement for them is 40+ years off and there's time to do something about it.

    If you want to be able to live in comfort in your old age, start living off 2/3 of your income and saving 1/3.

    Start now.

  • rate this
    -6

    Comment number 945.

    The UK as of 2013, is in a dire posistion. The economy is flatlining, the job market is saturated, wages are falling, and prices are rising. This is a situation that I, at 21, have inherited from "my elders" and that I am now expected to pay for. I am also expected to pay for the pensions, benefits and housing of the generation that caused this because they threw theirs away! That, is unfair.

  • rate this
    0

    Comment number 944.

    i work a 40 hour week for £14,500 a year -20% tax and we are on £11,600 a year and plenty of stress trying to meet bills.

    i have been in this job for 4 years and i am 24.

    enter this lady,earns 14,500 on benifits alone and then has a wee earner on the side for expensive gear.
    http://www.thesun.co.uk/sol/homepage/news/4753651/lithuanian-immigrant-youre-a-soft-touch.html

    should i just quit??

  • rate this
    +1

    Comment number 943.

    What has happened to this country its fallen apart!! too many people here too many people out of work some want too some dont, kids well some are blessed and want to do well some are just lazy lay abouts...and tbh aslong as we are here on this earth your never stop it...

  • rate this
    0

    Comment number 942.

    '736.Rodders AKA Dave
    Oddly (and I haven't been able to figure why), B&Q have been one of the companies to turn me down' It may be the way you filled in the form. People don't realise that the first person to see it will be a HR bod who hasn't got the first idea about the job you are applying for but will match against pre-set criteria. So whilst your statement made sense, they won't care.

  • rate this
    +6

    Comment number 941.

    My brother and me (54 and 62 years old respectively) are currently selling our parents house after both died in the last four years. They went through WW2 and worked hard after it to give us things that they never had and also passed on their belief in honesty and hard work to us. Perhaps Alan Wood and his kind would like to blame our parents for being so self-indulgent!

  • rate this
    +1

    Comment number 940.

    The real negatives being passed down to much of my generation is a cocktail of entitlement, safety and high expectations, leading to laziness. Few understand society, expect pay to match want, not value to an employer, and believe that someone will always help us out if we get stuck. Essentially when we leave home, we less become our parents, more try to get society to play their role.

  • rate this
    +8

    Comment number 939.

    @926.simonthepieman
    Sorry but stamp duty is a sin. Why is it fair to put a tax on buying somewhere for your family to live? it is not.

    Absolutely. But a progressive duty should be charged on 2 and more homes if you buy them. Also we have many wealthy overseas people buying UK properties for their own investment purposes forcing up prices for local people.

  • rate this
    +2

    Comment number 938.

    "914.JPublic
    "Best-off"?? Measured how? A significant proportion of young today will end up living with their parents well into their 30's"

    Compared to the combined effects of poverty, disease and war which affected every generation prior to the 1960s, having to 'live with your parents' is hardly a burden, is it.

  • rate this
    +3

    Comment number 937.

    911. A J D F: Sorry 1978 should have been 1988. 1979 left college, 1984 first house, 1988 second house. hope that clears it up. In each case the house was around 3 times salary but of course to get your first one you had to save with a Building Society for at least 3 years, then be interviewed, then have 20% deposit saved. then and only then, might you get a mortgage. Got my 1st credit card at 29

  • rate this
    +2

    Comment number 936.

    It certainly difficult for young people now and i realy feel for them.However i think it is all mind over matter and being positive costs nothing.It is also hard i imagine to be old and with failing health etc.If i had my time again i would be off travelling the world and having the time of my life.Worrying about what you havnt got is always destructive.Being young and healthy is a priceless gift.

 

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