The economic generation gap

Quote

"Be good to your children; remember they get to choose your nursing home.”

News

The topic of how different generations are bearing the brunt of the Great Recession may not make front page headlines, but it’s simmering beneath the surface, particularly in Britain.  Cuts in university funding are reducing the number of student places available in 2010; unemployment levels are highest among the 18-24 age group; young people remain dependent on credit cards even in the recession, and it is increasingly difficult for them to get on the housing ladder.  Much of this is not news, but when set against the longer term implications of yawning government deficits, mounting national debt and an ageing population (with increasing demands for pensions and health services), the question of generational injustice raises its head. 

Although individual families may have invested in their children’s future, collectively has the baby boomer generation been more irresponsible than prudent in its attitude towards subsequent generations?  While the ageing population is due to demographics (notwithstanding that lower birth rates are due in part to wanting to increase present consumption), the generation now under 30 will face higher costs for housing, education and pensions for many years to come – forced, in part, to pay for the borrowing and consumption decisions of their parents’ generation.

Read on...

Our colleagues at the Jubilee Centre recently posted a review of a new book by David Willetts entitled “The Pinch: How the baby boomers took their children’s future – and why they should give it back.”  This is a good place to begin reading further on this subject; see http://www.jubilee-centre.org/blog/268/book_review_the_pinch

Walk the talk 

One way to respond to these challenges is to invest more in intergenerational relationships.  Both baby boomers and their offspring can make decisions to stay well connected, by spending adequate time together and by living close at hand.  Thus grandparents can help save their offspring money by looking after the grandchildren, helping to pay for education, or going even further and living under the same roof and contributing to household expenses.  The reciprocal benefit of support and care when they become frail will increase the likelihood of it being a win-win-win situation, with clear benefits to all three generations.

The last word

From the Bible, Deuteronomy 5 verse 16: "Honour your father and your mother, as the LORD your God has commanded you, so that you may live long and that it may go well with you in the land the LORD your God is giving you.”