Thursday 29 March 2012
Are the Youth of Today the ‘Betrayed Generation?’
‘Years of struggle for a jinxed generation’ was the headline on the front page of last weekend’s Financial Times. The necessity of ‘averting a lost generation’ was talked about at Davos this year. It is important that attention is being given to the massive intergenerational wealth transfer created by the Western world’s past borrowings. However I’m not sure the terminology is quite right – a point I will return to in a bit.
The article in the Financial Times explains, ‘for the first time in half a century, young Britons embarking on their careers cannot expect to be any better off than their parents.’ The FT’s analysis shows that disposable incomes of young people have stagnated for years. What’s more, for our parents, many things that we have to pay for came for free. The biggest item may be University education; now young people will have to take on massive debts before their mid-twenties to get an education. These are debts which (as I discussed back in 2010) few of them will ever pay off. What’s more, until this month nearly all the burden of austerity in the UK was felt by the young and working age people and almost none by retired or nearly-retired people.
It is pleasing to see that the government is finally starting to address this. Some newspapers jumped on the removal of the Age Related Allowance as a ‘granny tax,’ exaggerating the impact the changes will have in a transparent attempt to sell more copies by inducing outrage in the public. But George Osborne’s move was long over-due. The Age Related Allowance is an unfair distortion of the tax system – and because income tax allowances are going up anyway its gradual removal for new pensioners will only have a small effect on a small number of people. Further distortions that favour older people need to be looked at. Also, more generally, increasingly progressive taxation will help young people in low-paid jobs.
Many older people in the UK don’t seem to realise how angry the younger generation really is. The London riots of 2011 were not just mindless criminality, as many seem to think. They were an outburst of the tension that is simmering, mostly under the surface. The same anger led to the trashing of the Conservative party headquarters. The same anger led to the occupation of St Pauls. Much of the press expressed puzzlement at these events (and misrepresented the Occupy movement by calling it ‘Anticapitalist’). But while I find the first two of these examples of expressions of anger deplorable and regrettable respectively, I can at least partially understand why they occurred.
When newspapers and politicians use words like ‘jinxed’ or ‘lost’ to describe my generation they seem to imply no one is to blame (much like Nick Frost’s use of the word ‘Accident’ in Hot Fuzz). In reality, it is the financial mismanagement of previous governments for several decades that has resulted in the current situation. Perhaps the next time the Financial Times prints and article on the plight of young people today, we would be more accurately referred to as the ‘betrayed generation.’