The Golden Generation: A Tale of Luck and Privilege
Are baby boomers the luckiest generation? It's a question that sparks lively debate, especially among those who believe they've been dealt a raw deal. As a late baby boomer myself, born in 1962, I find myself in a unique position to reflect on this intriguing claim.
The Generational Divide
Generational analysis has become a hot topic, with labels like Generation X, millennials, Gen Z, and Gen Alpha dominating conversations. Former Foreign Secretary William Hague, born in 1961, argues that the early 1960s were one of the best times to be born. But is this claim justified?
Student Loans: A Complex Injustice
The English student loan system is a prime example of generational unfairness. While I received government grants and free tuition, younger graduates face a 9% 'tax' on their earnings. This sense of injustice is palpable, as many feel misled by the system. However, the real victims are those who never had the chance to pursue higher education, a privilege now available to half of young adults.
The student loan system aims to balance fairness between generations, not within them. Interestingly, it's designed to make money from some graduates to subsidize others, creating a personalized tax. This system favors 'top' students, who subsidize their peers, a stark contrast to my subsidized education.
Housing: A Tale of Two Cities
The housing market also reveals generational disparities. Buying a flat in London in 1988, I benefited from substantial capital gains as house prices soared relative to earnings. However, this luck was not evenly distributed. London's resurgence as a global hub led to a 29% population growth, while housing stock grew by only 23%, creating a housing crisis. Those who bought in London were the real winners.
Pension Privileges
Baby boomers have secured their retirement through generous pensions. State pensions now provide significantly more than in previous generations, and some still benefit from the State Earnings Related Pension Scheme, a luxury scrapped due to its cost. Employers once offered defined benefit pension schemes, ensuring a decent pension based on salary. Today, millennials and Gen Z accumulate savings in personal pension pots, with employers contributing a mere 3% compared to the 15-20% of the past.
The Lucky Few
While I was fortunate with education, housing, and pensions, not all late baby boomers shared this luck. The real disappointment of recent decades is the decline in per capita economic growth, leading to a sense of material deprivation. The lack of growth has created a generational divide, with some cohorts struggling to surpass their predecessors.
In conclusion, the late baby boom was a golden era for those who were lucky enough to benefit from its privileges. However, the key to resolving intergenerational equity lies in reigniting economic growth, ensuring a brighter future for all.
