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Trajectory Trends Breakfast
May 2017
What Intergenerational Conflict?
Introduction
Generational Composition
Pre-War, 10.8%
Baby Boomers, 21.9%
Gen X, 19.7%
Gen Y, 20.3%
Gen Z, 18.6%
Gen ?, 8.6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
% of UK population in each generational grouping; 2015 - 2030
Source: Office of National Statistics, 2014 based National Population Projections
1975: Younger cohorts are much larger than those in 2015, and much smaller among older cohorts.
The Changing Demographic Context
600,000 400,000 200,000 0 200,000 400,000 600,000
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
UK Population Pyramid
2015: An ageing population with ‘booms’. Younger cohorts are much smaller than older cohorts.
2035: Most noticeable is the extent of the growth in the population aged over 70, as the largest group in 2015 reach old age.
Source: Office of National Statistics
The Changing Meaning of Age
In addition, each generation’s experience of age will be different.
Major life events, leaving home, buying a first home & having a first child are occurring later, altering the life course.
These changes, along with improved health and increased life expectancy, have increased the length of many stages of adulthood.
Source: Willmott & Nelson, Complicated Lives, 2006
Intergenerational Conflict
What is Intergenerational Conflict?
“…the collective tension, strain, and antagonism between older and younger generations over what constitutes the fair distribution of public resources across age groups.”
- Blackwell Encyclopaedia of Sociology
The Debate
Case Study: Housing
Source: Office of National Statistics & The Resolution Foundation
Home ownership rates by age for each generation: UK, 1961-2016
Just under two-thirds of Baby Boomers owned their own home by the time they reached 30
Figure has fallen to 42% in Millennials
Millennials will spend an average of £53,000 on rent by the age of 30, compared to £9,000 for Boomers
House Prices Have Grown Faster Than Wages
Source: Nationwide, 2015
A Conflict of Interest
“I am an optimist, and believe in cooperation between the generations: the baby boomers have done so well for themselves more out of a failure to understand the implications of their actions for future generations than out of fundamental hostility.”
- David Willets
Number of
landlords
Share of
landlords
Share of
rental
income
Pre-War 220,000 23% 20%
Baby
Boomers670,000 39% 50%
Gen X 440,000 31% 26%
Millennials 100,000 7% 4%
Source: Family Resources Survey, 2016
Democratic Deficit
60%
57%
56%
48%
38%
27%
40%
43%
44%
52%
62%
73%
0% 50% 100%
65+
55-64
45-54
35-44
25-34
18-24
EU Referendum Voting by Age
Leave Remain
Source: Lord Ashcroft Polls, 24th June 2016
“We will restore the contract between the generations, providing older people with security against ill health, while ensuring we maintain the promise of opportunity and prosperity for younger generations”
- Conservative Manifesto, 18th May 2017
“What this means is that a new cap on how much anyone need pay for their care will leave working-age people, often non-homeowners, to pick up a hefty bill just to preserve the money of the asset-rich older generation…The relevant chapter in May’s manifesto was titled, “A restored contract between the generations”. Well, she has just unrestored it, making the young pay more for the old again. ”
- Polly Toynbee, 22nd May 2017
Education
Source: Financial Times, 2017
Dependency Ratio
Source: ONS/Standard Life/Trajectory
The Myth of A Generational Experience
Source: Institute for Fiscal Studies; The Dynamics of Ageing Source: London Datastore; Ward Atlas
Intergenerational Conflict and Recession
The Impact of Financial Crises
-9.0%
-8.0%
-7.0%
-6.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Total GDP, quarterly change after pre-recession peak
80s recession
90s recession
Great Depression
2008 Financial Crisis
Source: ONS
Recession and Attitudes
Source: Harvard Business Review
“In rare cases, downturns are catastrophically deep and enduring, as were the Great Depression of the 1930s and Japan’s lost decade. Such downturns shape the mind-set of whole cohorts of consumers and have a long-term impact on buying behaviour. Many people who lived through the Depression have pinched pennies for the rest of their lives.”
- Paul Flatters & Michael Willmott
The Impact on Individuals
-3.7%
-6.6%
-8.0%
-11.3%
-12.0%
-8.9%
-14.0% -12.0% -10.0% -8.0% -6.0% -4.0% -2.0% 0.0%
60+
50-59
40-49
30-39
22-29
All Employees
Change in real hourly pay between
2009 and 2015 (RPIJ-adjusted)
Source: ONS, Annual Survey of Hours and Earnings Source: ONS, Labour Force Survey
Unemployment Rate by age; 1992 to 2010
The Magnitude of Perceived Damage
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
2006 2011 2012 2013 2014 2015
Net Household Financial Satisfaction; UK
2006-2015
18-24
25-34
35-44
45-54
55+
-26%
-12%
Source: World Values Survey, 2006; Trajectory Global Foresight 2011-2015
-30%
-20%
-10%
0%
10%
20%
30%
2006 2011 2012 2013 2014 2015
Growth in Household Financial
Satisfaction; UK 2006-2015
18-24
25-34
35-44
45-54
55+
Public Spending Priorities
1999/00, 4.3%
2009/10, 5.9%
2014-15, 4.7%
2%
3%
4%
5%
6%
7%
Education spending as a share of
national income
Source; Institute for Fiscal Studies; Education Spending 2015Source; Hess, Nauman & Steinkopf, 2016
Strength of Generational Conflict; Worked out by extent to
which older people are likely to support increased spending
for old age at the expense of educational spending
Conflict of Interest Doesn’t Mean Problems Aren’t Recognised
Source: British Social Attitudes & The Resolution Foundation
31%33%
29%27%
30%
61%
54%56%
49%
56%
0%
10%
20%
30%
40%
50%
60%
70%
Millennials Gen X Baby boomers Silent Generation All
Proportion saying they would support more homes being built in their local area, UK
2010 2014
Inequity is not one way…
0%
100%
200%
300%
400%
500%
600%
700%
All internet
users
16-24 25-34 35-44 45-54 55-64 65-74 75+
Categories of weekly internet activity, by age
Downloading software
Health
Uploading/adding content online
Public/civic
Leisure information
Work/studies information
News
Transactions
Entertainment
Social media
General surfing/browsing
Communication
Source; Adults Media Use and Attitudes 2016, Ofcom
The Future of Generational Conflict
Individualisation of RiskProportion of First Time Buyers with parental help (giving money/loan); 2017
Source; Impact of Family Support on Homeownership; Social Mobility Commission 2017
Exacerbating Inequality
0.8
0.67
0.610.57 0.56 0.55 0.56
0.86
0.70.65
0.6 0.58 0.57 0.55
0.730.7
0.670.64 0.65 0.67
0.780.74
0.630.59
0.56 0.55 0.55 0.55
0.26
0.320.37
0.340.3 0.28 0.29
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
25–34 35–44 45–54 55–64 65–74 75–84 85 and over
Gini coefficients by age: components of wealth (per adult); 2011/2012
(Financial Wealth Removed)
Property wealth Non-pension wealth Pension wealth Total wealth Net income
Source; Institute for Fiscal Studies; The distribution of household wealth in the UK, 2016
Social Mobility
Source: Income Inequality, Social Mobility and Economic Growth, OECD, 2015
The UK is already ranked very poorly in terms of social mobility.
The adjacent chart highlights intergenerational persistence in outcomes of education and income.
The lower on the chart, the lesser the mobility in the nation.
Intergenerational Persistence in Outcomes
A Rising Gerontocracy?
Source: The Rising Tide of Gerontocracy; The Intergenerational Foundation, 2016
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2015 2020 2030 2040 2050
Actual voter average single-year cohort sizes for selected
age groups, 2015-2050; At current rates of turnout
20-29 30-39 70-79 80-89
Emotive Nature of Conflict
Trajectory
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