The young are doomed – and only the old can save them

 

Twentysomethings are being forced to delay adulthood, writes Chris Cook

 

McHugh

Youth has its consolations. I can move up and down stairs with relative ease and my forehead has not yet encroached upon my hairline. But these benefits make up for only so much: British politicians do not take the needs of whippersnappers seriously.

 

This sounds like the special pleading of an early thirtysomething – and it is. But problems affecting the transition into conventional adulthood cast long shadows and threaten fundamental tenets of our society. Above all, they undermine the idea that a diligent person with a decent education and reasonable job should be able to have a family at an apt moment and enjoy higher living standards than their parents.

As the Financial Times has reported this week, young Britons are having a grim time. The unemployment rate among under-25s is 19 per cent. Since the crisis, graduates with jobs have suffered from steep falls in starting wages. For the young, the rise in house prices means higher rents. Meanwhile, benefits predominantly paid to the young are being cut. State pensions are not.

 

Some of this is bad luck; the young always suffer the most from elevated unemployment during recessions and high house prices during booms. The current coincidence – high asset prices and labour market weakness – has given them the worst of both worlds. These things can happen. C’est la vie.

 

Some might also argue that it is simply short-termist to worry about the young. Youth is a condition from which most people recover. Yes, high house prices are a problem and so are low incomes. But the old will die and the young shall inherit jobs and homes. They cannot, as the cliché goes, take it with them when they go. If you take this view, an eye for generational imbalances is myopic.

 

Others argue that the generational disadvantages are small. Take a long view: today’s young people are healthy, cheery and not being conscripted. Is it really so bad that the young have to commute from West Croydon for a few more years than they would like?

 

And is this not all a distraction from bigger gaps? On average, twentysomethings earn 70 per cent as much as fortysomethings. But there are far bigger differences within cohorts. The poorest tenth of 22- to 29-year-olds earn one quarter of what the richest earn. So why worry whether the young are squeezed when poverty can run so much deeper?

 

However, these analyses miss several issues. First, a lot is meant to happen before you are 35. It used to be that parents were a few years into their duties at least. No longer. Family formation is being delayed – sadly, often for too long. High housing costs and weak wages mean young people may not feel able to have the family lives that they would want.

 

Second, a world of ever-escalating house prices will embed inequality. House price rises show up as a cost for those who do not own housing and an increase in wealth (and perhaps income) for those who do. Unfairness between generations drives unfairness within them. If the only people who can afford to buy housing are the children of people who bought housing, it creates an unbridgeable divide between the haves and the have-nots.

 

Finally (contra the grumbling), the median young Briton is better educated than their parents. Unlike their elders, they may also have borrowed to put themselves through university. They may have accepted low wages for a long spell to get on-the-job training. It is galling that these young people still expect to have lower living standards than their feckless parents.

 

These problems are too serious for (usually older) people to wave away. Nor are they easy to solve at a stroke. Part of the problem is that global competition and automation have removed a lot of decent starting jobs. But there are ways to help. We could subsidise employment and education for the young a bit more. Tax and planning law could be reformed to create incentives to build new housing. None of the obvious pro-young ideas is simple, but none is even on the agenda. Politics tends to pander to the old.

 

This reflects the political weight of the first baby boomers: more than 9m people were born between 60 and 70 years ago on mainland Britain. As that vast generation lumbered into the labour market, Westminster started to worry about immigration. And, now, as they stumble from the workforce, it frets over pensioners.

 

These early boomers are not the biggest such lump of labour: more than 10m Britons were born between 40 and 50 years ago, but only 7.8m between 25 and 35. For politicians, pandering to that tranche of middle-aged people is one-quarter more electorally efficient than sucking up to the young. Still, you might think, it cannot last. The boomers are not immortal – and the mid-2000s baby boom is on the way.

 

But rising longevity means the old are only going to increase their electoral advantage over the young. The latest forecasts by government actuaries imply the number of over-40s will rise from 30m to 38m by 2040. In the same period, the number of 18- to 40-year-olds, now 19m, will only graze 20m. There will not be a moment when Westminster pivots from the old and towards the young.

 

So the key to winning a better deal for the young is persuading older voters. Of course, older people should become more sympathetic: today’s young will be old all too soon. Maybe a drought of grandchildren will concentrate minds. The plight of the young is already on the agenda: this week, Nick Boles, the Tory planning minister, suggested the formation of a “National Liberal” brand allied to the Conservative party to help attract liberal (read: younger) voters. Ed Balls, Labour’s shadow chancellor, has pledged to build 200,000 houses a year.

 

But that may be all the young can hope for. There are more cut-throat policies that a pro-young politician might propose, but they are unlikely to win over the grey vote. How about a land value tax levied on house prices? It would hit the older harder, the younger less and cut dwelling costs by encouraging the cash-poor and asset-rich elderly to move into more modest accommodation.

 

Using the tax system to force people from their family homes would test the cold-heartedness of any politician. But the status quo is pretty cruel, too.

Advertisements
Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: