Revealed: The 30-Year Economic Betrayal Dragging Down Generation Y’S Income

[Sancho Panza]

Guardian 7/3/16

'The full scale of the financial rout facing millennials is revealed today in exclusive new data that points to a perfect storm of factors besetting an entire generation of young adults around the world.

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.

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 societ

Experts are warning that this unfair settlement will have grave implications for everything from social cohesion to family formation.

• 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 data accessed by the Guardian found that in the US, France, Germany, Italy and Canada, the average disposable income of people in their early 20s is more than 20% below national averages.

Who's winning? Find out how your income compares with every other generation

For the first time in France, recent pensioners generated more disposable income than families headed by a person under 50. In Italy the average under-35 became poorer than average pensioners under 80. Using the most recent US data, in the midst of the downturn in 2013, average under-30s had less income than those aged 65-79. This is the first time that has happened as far back as the data goes.

Millennials interviewed by the Guardian said they felt their generation was facing far greater hurdles to establish themselves as independent adults than previous generations did.

Fiona Patterson, a 30-year-old accounts director at a fundraising agency, said that despite pay rises and promotions her lifestyle hadn’t changed in six years. “Everything I’ve made in terms of a pay rise has gone into living and saving. My lifestyle has remained exactly the same. Any dent in employment or income would mean I’d have to go back to sharing again.”

Londoner Tanaka Mhishi, who works in a bookshop, adds: “I definitely think in a lot of ways my parents’ generation was luckier. They had a lot more freedom to do things younger: they were able to go straight from university and move to London and afford their own flat.

“We definitely have to make more compromises. Compromises like if I want to have kids by the time I’m 30, or even 40, can I still have the career I want to do?”

In Australia, millennials are being inched out of the housing market. In the UK, new figures will show the notion of a property-owning democracy has already been terminated. In the US, debt is the millennial millstone – young people are sitting on $1.3tn of student debt.

Across Europe, the issue centres more around jobs – and the lack of them. The numbers of thirtysomethings still living with their parents is stubbornly high in countries such as Italy and Spain, with grave implications for birthrates and family formation in places whose demographics are already badly skewed towards elderly people.

“We’ve never had, since the dawn of capitalism really, this situation of a population that is ageing so much and in some countries also shrinking, and we just don’t know whether we can continue growing the economy in the same way we once have,” said Prof Diane Coyle, an economist and former UK Treasury adviser.'

Not really news to many on here but interesting to see it being spelled out so bluntly.

[TheCountOfNowhere]

The pyramid is dead....

[interestrateripoff]

Been thinking today that young people now don't get a worthwhile saving rate.

[canbuywontbuy]

But.....but....they just need to roll up their sleeves! Look at those lovely Polish people who work so hard because our lazy lot won't. The indigenous young of Britain just need to find another country that requires no visa to enter for a UK passport holder and has minimum wage several times the average wage of the UK while offering tax credits and housing benefits as extra incentives. Without doing any research, let me ignorantly state that I'm sure such a country exists. Why don't they go to such a country? What's wrong with our lot? So damned lazy.

[Maynardgravy]

The pyramid is dead....

...Long live the octahedron scheme!

[crouch]

Bit sloppy. It conflates causes (demographics and globalization - and automation/AI and in the EU - immigration) and effects (debt, joblessness, high house prices). It also, I think quite amusingly, states that demographics are "badly skewed" towards elderly people as if this is something that has been deliberately engineered rather than just happened.

As regards the increases in pensioner incomes during 1979-2010 in the UK I suspect a great deal of this was to eliminate pensioner poverty which was widespread 40 years ago and is now somewhat more re balanced but of course it won't be interpreted that way; it will be seen as pensioners getting it all at the expense of the young but the causes of the position of the respective groups are divergent.

The young are indeed getting a raw deal but, make no mistake, if all pensioners were hit in the way many on this forum would want ( by eliminating perks or even taxing them far more) this would not eliminate the demographic challenge; it would make little difference to the march of automation/AI; it wouldn't affect globalization and in fact you can add climate change and the use of finite resources. In fact even if you achieved the absolute Holy Grail of this forum: much lower house prices you would still be left with these major secular challenges which. I would entirely agree, the political classes are totally failing to address.

[TheCountOfNowhere]

...Long live the octahedron scheme!

Is that the devil at the top and the queen at the bottom...or vice versa ?

[Maynardgravy]

That's me at the bottom on a one million year HTB7 (99.9% Govt. loan) interest only, BOMADs + BOGAGs assisted.

Bargain.

[Amiinsane]

I was going to own a three-bedroom house in suburban London on one salary. Then I bought an iPad, got a phone for £15 a month and went on a summer holiday and it all slipped out of my grasp.

[Errol]

Good to see these sorts of issues getting an airing in the mainstream.

[repetitive bleats]

I was going to own a three-bedroom house in suburban London on one salary. Then I bought an iPad, got a phone for £15 a month and went on a summer holiday and it all slipped out of my grasp.

I bet you were going to waste the rest of your wages on on a night in the pub. Only when you found one that hadn't been turned into 'luxury' flats - you found it was only frequented by boomers who could afford to pay £4 a pint.

[spunko2010]

I was going to own a three-bedroom house in suburban London on one salary. Then I bought an iPad, got a phone for £15 a month and went on a summer holiday and it all slipped out of my grasp.

Lose -1 point for not throwing in a predictable anecdote about some 20-something waster you know personally who spends all her money on fags.

[durhamborn]

Its not just the young though.They have it worst because of student debt and no capital,but many older are also in the same boat.I left school 30 years ago and nothing has improved.Jobs are mostly short term,contract or zero hours mostly due to mass immigration where the bullying is the name of the game.People really are treat in a terrible way.Everything that can give people some stability has been taken away.Permanent job and plenty of others if you lose it,gone.Being able to buy a cheap house and pay it off,gone.Being able to save into a final salary pension,gone.Being able to have your children brought up by their mother for the first few years,then she can go part time,gone.

The problem is the 1%,the corporates and the rentiers.They have sucked all the wealth to themselves while government introduced the laws so they could.Its all about making ordinary people desperate and happy with the scraps they can get.We only need to consider the housing benefit bill and where it goes.That money should be used to build council housing and also houses to buy as cheap as possible.Instead its a tax on working people just above benefit level themselves to hand to rentiers.

For most young people their only hope is what their family can give to them,and if its nothing,your stuffed.Our political class should all be dipped in tar and feathers and torched.

[doomed]

Well it is only a matter of time until the disenfranchised start voting in lunatics to bring the whole thing crashing down. They really are that greedy that they would rather watch things burn than give a bit back not realising once the games up their 'wealth' will quickly vanish.

[Dorkins]

3,942 comments on that article now. The peasants are not exactly chuffed with UK 2016.

[Amiinsane]

This culture of buying homes to rent out to people is a genuine poison on society. It takes a finite resource and makes it scarcer by allowing people to effectively stockpile it.

'It's my pension innit' is basically 'I'm farming someone else out for my own benefit'

I'd be happy to see nearly all those people go bust.

[bomberbrown]

This culture of buying homes to rent out to people is a genuine poison on society. It takes a finite resource and makes it scarcer by allowing people to effectively stockpile it.

I wouldn't mind so much if people were BUYING to rent (since this is what professional not for profit landlords do), but in reality the vast majority are simply BORROWING to rent. This really is the cancer of society.

BTL. Introduced by the Tories in the 90s and continued by New Labour there on in. Although I think I read somewhere BTL was first coined in the 70s by Labour?

[Dorkins]

I hope Corbyn's advisors are reading those comments and taking note. There's an entire generation of (potential) voters who feel screwed over by their country. Interesting the number of commenters in their 40s who also feel let down.

http://www.theguardian.com/world/2016/mar/07/revealed-30-year-economic-betrayal-dragging-down-generation-y-income

[Si1]

I hope Corbyn's advisors are reading those comments and taking note. There's an entire generation of (potential) voters who feel screwed over by their country. Interesting the number of commenters in their 40s who also feel let down.

http://www.theguardian.com/world/2016/mar/07/revealed-30-year-economic-betrayal-dragging-down-generation-y-income

In surprised to say, but +1

[spunko2010]

Millennials don't tend to vote that much though according to the statistics. Plus, if you put that Guardian article in front of 1,000 millennials I bet only 10% or so would read it to the end.

[Dorkins]

Millennials don't tend to vote that much though according to the statistics. Plus, if you put that Guardian article in front of 1,000 millennials I bet only 10% or so would read it to the end.

In the 4 general elections there have been since Millennials first started to get the vote they've been able to choose between a pro-HPI party and a couple of other pro-HPI parties. Which pro-HPI party do you think the young should have been voting for?

In fairness, the Lib Dems did pretend to care about the young before GE2010 and picked up lots of their votes, then within a few weeks of joining the Coalition they voted to increase tuition fees to £9k.

The Lib Dems were then butchered by the young at the following election, losing 49 of their 57 MPs. I'd say the young are just starting to make their presence felt electorally.

Edited March 7, 2016 by Dorkins

[moonriver]

Good to see these sorts of issues getting an airing in the mainstream.

Yes indeed.

The Mail too is now covering this story...

http://www.dailymail.co.uk/news/article-3480868/Generation-Broke-debt-rising-house-prices-unemployment-mean-Millennials-world-suffering-huge-levels-financial-inequality.html

"Generation Broke: How debt, rising house prices and unemployment mean Millennials around the world are suffering huge levels of financial inequality"

[canbuywontbuy]

I hope Corbyn's advisors are reading those comments and taking note. There's an entire generation of (potential) voters who feel screwed over by their country. Interesting the number of commenters in their 40s who also feel let down.

http://www.theguardian.com/world/2016/mar/07/revealed-30-year-economic-betrayal-dragging-down-generation-y-income

Corbyn is a non-entity - he's much more keen to see himself as "right on" with allowing mass immigration than giving two sh1ts about the indigenous population of the UK. He's a 60+ year old Owen Jones.

[Dorkins]

Corbyn is a non-entity - he's much more keen to see himself as "right on" with allowing mass immigration than giving two sh1ts about the indigenous population of the UK. He's a 60+ year old Owen Jones.

I'd rather see a "non-entity" like Corbyn leading the Labour party than a PPE-educated bankster puppet like Miliband/Balls/Cooper.

[spyguy]

Millennials don't tend to vote that much though according to the statistics. Plus, if you put that Guardian article in front of 1,000 millennials I bet only 10% or so would read it to the end.

Then they get older, have gets, stuck in a 1 BR flat, kicked out regulary.

Then they start voting.

Look at he US - you have Bernie Sanders campaigning as a democratic solcialist. Would not have lasted 1 second 10- 20 years ago,

Or Trump.

If you think UK politics is some sort of well thought out, stable org then you are wrong.