Class matters more than age
Across the political spectrum people want to put the baby-boomers on trial for crimes against the young.
They have mopped up pensions, housing and jobs leaving those behind them facing a bleak future, the argument goes. Perhaps the most prominent advocate has been David Willetts in his pre-election book The Pinch: How the Baby Boomers Took Their Children’s Future – And Why They Should Give it Back. Francis Beckett has a much more nuanced argument from the left, and speaking up for youth are Shiv Malik and Ed Howker.
Understandable arguments about society nearly always rest on generalisations. We talk about and measure the experience of women or of ethnic groups and undoubtedly gain a lot from such insights into the nature of inequality. But there are also dangers that such generalisations lead us to pass over differences within groups, ignore the “tyranny of the average” and muddle up correlation and causality.
I’m particularlysuspicious of age generalisations. Unlike some other divisions – few of us change gender for example – being in an age group is necessarily transitory. It is no great revelation to discover that older workers have more assets than younger workers – they have simply had more time to build them up.
And there is always a danger of nostalgia when dealing with the past. Young people can legitimately claim that the government is making it much tougher to go to college (ironically a move spearheaded by David “the Pinch” Willets). Yet while my generation did not pay fees, there were far fewer university places. I undoubtedly did well, but those of my age group that did not get to college may not have done so.
One common argument in this debate is that older people have grabbed all the pensions. At one level there is an obvious truth here. The older the worker the more likely they are to be ina good pension.
But to generalise from this would be a big mistake as new ONS figures today show (and if you can bear the excitement there’s an online podcast/presentation here.) This is how they summarise their snapshot of 50 to 64 year olds:
The estimated saving of households headed by 50 to 64 year olds in Great Britain in 2006/08 was £2.2 trillion (million million). Pension saving accounted for nearly three-quarters of this total (73 per cent).
Saving is unequally distributed between households: in 2006/08, the top 10 per cent of households had savings of £1.0 trillion (45 per cent), while the bottom 50 per cent had savings of £122 billion, accounting for 6 per cent of the total. (our emphasis and the 45 per cent is our calculation).
People taking part in the Wealth and Assets Survey – the main source of information for the new chapter of Pension Trends – were divided into ‘spenders’ and ‘savers’ based on their responses to statements about spending, saving and credit use. The results for ‘savers’ showed that 41 per cent had not saved from income in the last twelve months or ever.
This indicates that some people cannot save even though they wish to do so. A key constraint on saving is income. For households in the 50 to 64 age group, median savings increased from £74,600 for households with earned income of less than £10,000 to £797,000 for those with £70,000 and over.
The experiences within this one agre group are so diverse that I think it is a mistake to generalise about them.
My alternative account of change is almost certainly an over-generalisation too, but I think it makes more sense. This is what I would argue:
Since the 1980s we have become a much more unequal society both in terms of wealth and income. This reversed the social-democratic moment in UK history from the second-world war onwards where society tended to become more equal (if rather unevenly). The main beneficiaries of this are now reaching retirement – but they make up a pretty small proportion of their age group, the majority of whom have also been losers in this growing inequality.”
In other words it’s much more about class than age.