Tuesday, March 08, 2016

Generation Y Gets The Short End


Yesterday, the Guardian reported on a study which has concluded that, across the world, Generation Y is getting shafted:

A combination of debt, joblessness, globalisation, demographics and rising house prices is depressing the incomes and prospects of millions of young people across the developed world, resulting in unprecedented inequality between generations.

A Guardian investigation into the prospects of millennials – those born between 1980 and the mid-90s, and often otherwise known as Generation Y – has found they are increasingly being cut out of the wealth generated in western societies.

Where 30 years ago young adults used to earn more than national averages, now in many countries they have slumped to earning as much as 20% below their average compatriot. Pensioners by comparison have seen income soar.

The news is really quite depressing:

In seven major economies in North America and Europe, the growth in income of the average young couple and families in their 20s has lagged dramatically behind national averages over the past 30 years.

In two of these countries – the US and Italy – disposable incomes for millennials are scarcely higher in real terms than they were 30 years ago, while the rest of the population has experienced handsome gains.

It is likely to be the first time in industrialised history, save for periods of war or natural disaster, that the incomes of young adults have fallen so far when compared with the rest of society.

In the United States, we are currently witnessing what happens when an entire social class is left behind. Now an entire generation is being left behind. Caelainn and Shiv Malik write:

  • Prosperity has plummeted for young adults in the rich world.
  • In the US, under-30s are now poorer than retired people.
  • In the UK, pensioner disposable income has grown prodigiously – three times as fast as the income of young people.
  • Millennials have suffered real terms losses in wages in the US, Italy, France, Spain, Germany and Canada and in some countries this was underway even before the 2008 financial crisis.

The Masters Of The Universe have done the young no favours.


thwap said...

I have my doubts about the gains of those other groups too. I know Gen-X hasn't done well. They're probably skewing things with "averages" that include a few winners.

Gen-Y hasn't had much time to produce "winners."

Anonymous said...

The fact that most national governments are ignoring the plight of generation Y is one reason I admire Bernie Sanders. He and his supporters claim he is running as a presidential candidate because it gives him a national platform to advertise that injustice, and should he be elected, to do something about it.

Owen Gray said...

True, thwap. But, whatever group you consider, the winners are few and far between.

Owen Gray said...

Interesting, isn't it, Anon? The young recognize the real deal -- and age has nothing to do with it.

Lorne said...

If one has kids fitting into that demographic, Owen, one knows all too well that these reports of the struggles of the millennials are not exaggerated. Not only are we bequeathing them a world climate extremes, we are also leaving them one with employment extremes. One hopes that with the power of the young being tapped in the Sanders campaign in the U.S., increasing numbers of young people will begin to appreciate their potential political clout.

Owen Gray said...

All three of our children fit into that demographic, Lorne. They are all have university degrees. But they have discovered that a university degree does not necessarily lead to a good job. They have a harder time than my wife and I did.

ffd said...

Weird thing is that younger people are much less likely to be politically aware and active and even to vote than older people. Issues like affordable housing and renewable energy should be of deep interest to younger people but they aren't on the whole.

Owen Gray said...

According to the latest data from Elections Canada, a lot more young people turned out to vote last time around, ffd. Things could be changing.

The Mound of Sound said...

This won't change, Owen, until we kick over the traces of neoliberalism. Look at the impressive economic recovery in the United States since the meltdown of 2008. Where has it gone? To the top 1%. All other groups, white and blue collar, have seen their incomes stagnate or worse.

That is an engineered outcome, the result of targeted legislation. It is neither merit nor market based. Stiglitz lays this out convincingly in "The Price of Inequality." Logic and fact have been stood on their head. We have been successfully fed this great lie about 'wealth creators' and how their prosperity 'trickles down' to the plebs when, in reality, legislated tax cuts, deferrals and exemptions coupled with subsidies, grants and the provision of public property to private interests at below market costs if not free has created a 'trickle up' economy in which wealth is siphoned out of the state and the majority of its citizens to those who are designated to receive it.

We have created a 'rentier' class and in a throwback to the Victorian era and the centuries before it, they've stopped investing and have instead diverted a good deal of their newfound wealth into accumulation. Corporations are doing the same, sitting on earnings, what Carney and others call "dead money."

There was a time when we recognized wealth redistribution as a fundamental and desirable responsibility of government. This was instrumental to the creation of a healthy, robust economy capable of weathering recessions and similar disruptive events.

If we are to get out of this and restore social cohesiveness that will be sorely needed to meet the other challenges of this century, we must tax excess wealth at very high levels as we once did. This is addressed clearly in Roosevelt's 'Square Deal' speech of 1910. Without it there can be no progressivism.

Owen Gray said...

It's truly remarkable, Mound, how governments have adopted policies which were proved retrograde long ago. Myopia has become as prevalent as the common cold.