Home Education Inter-generational Financial Giving and Inequality: Give and Take in 21st Century Families
The Baby Boomers and the Potential for InterGenerational Conflict
The public debate about the baby boomers and the potential for intergenerational conflict has been very lively over the last decade or so, perhaps too lively, generating more heat than light at times. This book seeks to contribute to this debate through our review of existing research and our new empirical findings.
We showed, in Chap. 2, that the so-called post-war ‘baby-boom’ generation is actually a large cohort of people, formed of two peaks in fertility rather than one. In many respects, as we show throughout the book, there are considerable differences between the younger and older baby boomers, leading us to question the extent to which it is helpful to talk about ‘baby boomers’ as a single, homogeneous group.
Following on from this, inasmuch as we can talk about ‘the baby boomers’, this group is, indeed, much wealthier, on average, than other generations. This is partly due to their lifecycle position as this group is at a point in their lives when they have had more time to accumulate pension and other forms of wealth before using it up in later years. But it is also due to particular socio-economic conditions and policy choices made in the past 40 years, and it is precisely these changes which mean that younger generations are unlikely to be in as strong a position when they are at a similar lifecycle point in the future.
But while inequalities between generations certainly exist on average, there are also quite staggering levels of inequality within generations. As we saw in Chap. 2, one in ten of those aged 55—64 had more than ?1.4 million in wealth in 2010—2012. But one in ten of those in the same age group had less than ?27,000, even including all their personal possessions. It is not exactly clear which form of inequality (inter-generational or intra-generational) is ‘greater’ or more problematic. But it is clearly a problem for people on the brink of retirement who have very little wealth to fall back on as they will have no real opportunity to accumulate any more wealth and will have to rely solely on state forms of support (and possibly their families) for the rest of their lives. Younger people are, on average, less wealthy than older generations and it looks as though, again on average, they will never be able to accumulate as much as the previous generation or two did. And this is likely to cause particular concern as successive generations have come to expect better living standards from one generation to the next.
Why, however, have we come to expect rising living standards and constant economic growth? And, is this necessarily a good thing? Rising levels of prosperity and growth are often measured in aggregate or on average. But the distribution of the proceeds of growth may be enjoyed only by a minority as we know that increasing wealth rarely seems to ‘trickle down’ to benefit others. It is therefore the distribution of wealth/living standards which should matter rather than the overall level. And while constant growth has a major appeal, there are serious question marks over the nature of the environmental cost we may be paying for such growth and therefore the ultimate sustainability of such prosperity. Furthermore, there are also questions about the links between material wealth and wellbeing. While those in poverty certainly benefit from increased income and wealth, other groups appear to benefit much less. We saw this, to some extent, in Chap. 7, where older generations lamented the loss of strong social relationships in the face of growing individualism and materialism. This is not to romanticise the past. Sustainable growth, with a fair distribution of the proceeds, must surely be in everyone’s interests and serve to increase wellbeing and support strong social relationships. But unsustainable growth with increased inequality will ultimately be in no-one’s interests, not even those few who appear to benefit in the short term.
One of the concerns raised in the debate about ‘the baby boomers’ is that, alongside the relatively high level of wealth (albeit on average), they appear to have accumulated and continue to accumulate; they have also received and continue to receive more support from the welfare state than they need compared with other generations (see Chap. 2). However, there are many complexities involved in making these calculations, and it should also be noted that different generations may benefit (or lose out) in relation to much broader social and economic policies around education, labour markets, housing and care. While the baby boomers do appear to have benefitted in many ways, there is no reason why other generations could not similarly benefit if support for the welfare state is maintained more generally. Having said all this, it is true that the austerity policies which have followed the global financial crisis have particularly cut state support for working-age adults (including those with children) while social security for pensioners is being maintained. This has led some commentators to talk of inter-generational conflict and to call for cuts in pensioners’ benefits. This discourse, however, once again disguises the huge inequalities within generations and fails to remember that young people today will be tomorrow’s pensioners, so if support for pensions and other benefits for older people are cut, then younger generations will also suffer from these cuts in future years. This discourse also ignores the cuts to social services budgets which may have recently contributed to one of the highest increases in mortality rates in 50 years (see Chap. 2). Rather than focusing on inter-generational divisions which provide a smokescreen for neo-liberal policies, this debate needs to reflect more on intra-generational divisions.
And there is certainly very little evidence, in this book, to suggest actual conflict between generations at the macro level (in society in general). Chapter 7 showed that pensioners still attract support across all age groups as they are considered to have contributed towards the welfare state and they are not expected to work in later life. Furthermore, most people aspire to a reasonable standard of living in later life and so have a self-interest in preserving support for pensioners whereas people do not aspire (or generally expect) to be unemployed or disabled while they are of working age.
Some differences in attitudes do exist between age groups, of course, and these go some way to explaining the more general decline in support for the welfare state since the 1980s, but period effects are also important, with a general decline in support for the welfare state across all age groups. Generally, therefore, there is more agreement than disagreement between generations and there has been a gradual shift in outlook across society towards more individualistic values.
Chapter 7 also reported on our own quantitative attitude research which directly asked people if they thought that one generation had had a better or worse deal, financially in life, than others. We found that while the older baby boomers (those born between 1945 and 1955) did indeed think that they had had the best deal in life, a substantial minority of younger baby boomers (those born between 1955 and 1965) pointed to their parents’ generation as receiving the better deal and 17 per cent pointed to the generation after them. This reinforces our more general conclusion that we should not necessarily combine all those born between 1945 and 1965 into one group of ‘baby boomers’. In fact, the older baby boomers had more in common on this question with those aged 70 plus than with the younger baby boomers. Our qualitative research then explored the reasons for these views in more detail, highlighting not only structural issues around education, jobs, housing and pensions but also other important aspects of people’s lives, such as new technology, racism and social/family relationships. The baby boomers in our small qualitative sample (geared more towards middle-class home owners) did, indeed, consider themselves to be lucky and they were concerned about their children’s future. Younger people were also concerned about the increased costs to go to university, the difficulties finding jobs and becoming home owner and so on. But there was also a strong streak of optimism about the future and a recognition that they were benefit- ting from changes in technology, the ability to travel more widely than their parents and a decline in overt discrimination of certain kinds (e.g. racism).
Once again, the over-arching picture from our research is one of relative solidarity between generations at the macro level. Where inequalities between generations were identified by survey respondents or members of our qualitative sample, these tended to be seen as the result of structural forces and policy instruments (e.g. the rise of youth unemployment and the introduction of higher tuition fees making life more difficult for younger generations). Older people were not seen as to blame for this and there was little appetite to cut their benefits or other forms of support to compensate in any way for the position younger people found themselves in. If inter-generational inequalities were to grow still further there might, however, be potential for generational conflict, especially if this is deliberately stirred up by politicians and the media as a distraction to broader inequalities.
The potential for such conflict is clear from the Brexit vote in June 2016, when there was a major divide between those under 45 generally voting to Remain in the European Union and those over 45 generally voting to Leave. Of course, there were other cleavages within the electorate in terms of social class, education, region (urban or rural) and so on. But the inter-generational differences were widely discussed in the media with some views expressed, among younger voters, that older voters should perhaps have less say on the issue given that they would not have to live with the consequences of the vote for as long as younger people. However, even with the recent age divisions evident in the Brexit vote, there are reasons to suspect that conflict between generations is unlikely to become manifest. First, there is little opportunity for particular generations to mobilise and act in their own group interest. For example, younger people are a diverse group with many different interests. They are not therefore a ‘class/cohort in itself’ or even a particularly ‘class/cohort conscious’ group. Second, (and as we have shown throughout this book) families provide a mechanism (via financial and other forms of support) to re-balance the macro-level inequalities and thus reduce the conflict that might otherwise be expressed. However, this merely serves to entrench existing inequalities within generations.
Thus, if we wish to reduce the macro inequalities both between and within generations, we need to look to structural and policy mechanisms rather than to ‘private’ mechanisms of redistribution within families. This is not to argue for cuts in support for older people but for greater support for a stronger labour market and welfare state (e.g. through a higher minimum wage, apprenticeships, tax credits, affordable housing, better maintenance support for higher education) which could be paid for through more progressive taxation among all age groups with high levels of income and wealth. Given that older people have higher levels of income and wealth, this approach would also provide some inter-generational redistribution of wealth, though this would be a side effect of the policy rather than a main aim. A particularly useful tool here would be inheritance and gift tax. If those giving or leaving large sums of money to their children were to be taxed a little more, then this would reduce inequality and the proceeds could be used to support younger people (see below).
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