Sunday, March 25, 2012

Living standards plummet for the young

Rift grows between old and young

For the first time in 50 years, young Britons embarking on their careers cannot expect to be any better off than their parents while those approaching retirement have never had it so good. Real disposable household incomes of people in their 20s have stagnated over the past 10 years just as older households are capturing a much greater share of the nation’s income and wealth. Median living standards of people in their 20s have now slipped below those of people in their 60s, 70s and 80s. "You can’t honestly say to younger people any longer, you’ll do better than your father or mother’s generation," Alistair Darling, Labour’s former chancellor, said. "This trend has been developing over a number of years and politics as a whole has been lagging behind and has not focused on it."

Posted by drewster @ 11:23 PM (1603 views)
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6 thoughts on “Living standards plummet for the young

  • Also from the FT, on falling living standards across Europe. Not directly HPC-related, but remember that every additional pound (or euro) spent on fuel bills is a pound (or euro) less to service a mortgage or pay rent.

    FT: Soaring oil prices risk recession
    Crude prices have risen 15 per cent this year, fanning fears that a fragile economic recovery is in jeopardy. The European Union is particularly vulnerable, with high oil prices now overtaking the sovereign debt crisis as the biggest problem.

    Every recession in the industrialised countries since the second world war had been preceded by an oil price spike.

    The oil import bill is creating an additional burden for Europe’s hard-pressed consumers. European households will spend close to 11% of income on heating, lighting, cooking and personal transport this year, compared with the historical average of 6-7% and 9% last year.

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  • stillthinking says:

    The wealth of the old are due to undeserved transfers of wealth from the young, through a number of mechanisms.

    Government pension liabilities which were never funded i.e. spent at the time and not due now.
    Government debt payments, used to lower the effective tax rate of the time i.e. spent at the time and not due now.
    Wage suppression through immigration.
    The financial savings from using immigration instead of the costs of your own children as the next workforce.
    Housing benefit transfer payment system and one of the harshest residential planning restriction systems in the world.
    Disbursement of public assets to principally one demographic group , North sea oil, public housing, infrastructure companies.

    Now you could pick and fiddle about individual points but overall fairly hard to deny, that the boomer group have their fingers in the till and do not have any real wealth. As such there is a certain vulnerability to their living standards, which could fall at any time. Like the IOUs in the BT pension fund, just vapour wealth.

    Nobody in the UK has an obligation to pay and I don’t think they will for ever. Essentially, if somebody just sits on unemployment because they are waiting for social housing, which is fairly common, I think you could class that as a youth labour strike in a way. Certainly the government cannot fund things for ever. So… but now 7 years waiting for decent housing for many.. damage is kind of done.

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  • stillthinking, I would add:
    State support for housing and land monopolisation through the tax system and rental laws.

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  • mark wadsworth says:

    ST, GM, good list. That’s about it really, but the Boomers/Home-Owner-Ists have all their propaganda in place:

    1. “I paid for my pension with my national insurance contributions”
    2. “We have to restrict housebuilding to preserve the hallowed greenbelt for future generations”
    3. “Young people just waste all their money on alco-pops, iPads and flat screen TVs”
    4. “Poor Widows In Mansions”
    5. “After Brown trashed our pensions [completely untrue] we have to invest in buy to let to secure our future” (they never make it clear what today’s young people are supposed to do for their retirement)

    and so on.

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  • The above points give way to the following behaviour:

    1, Emigrate
    2, Become a banker/MP on a huge salary, bonus, or expenses
    3, Languish on benefits and learn to enjoy your spare time.

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  • general congreve says:

    @4 – Re: point 5. Actually saw an interview the other day on the topic of unaffordable pensions and the need for a downwards restructuring, on the news (forget which channel). There was two old biddies saying they understood it was tough for the young and that their pension commitments were a big part of the problem. When asked what should be done about it, they said pensions would have to fall, but when pushed as to when, they said only when they were no longer here, before cackling loudly as the news item faded back to the desk!

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