Generations at War

:00:00. > :00:09.Now on BBC News - Talking Business Wood. We tend to take it for granted

:00:10. > :00:15.that our children would be better off than we are, but that may be

:00:16. > :00:20.about to end. Millennials, people born in the 1980s and 1990s, could

:00:21. > :00:25.be the first generation in history to be worse off than their parents.

:00:26. > :00:52.In this week's programme we take a look at generations at war.

:00:53. > :00:59.Those able to work and provide for their children and generations to

:01:00. > :01:05.come until they become too old to work and they themselves are looked

:01:06. > :01:11.after, that social contract is the basis of civilisation all over the

:01:12. > :01:13.world, it evens out wealth over lifetimes, and ensures that we

:01:14. > :01:17.invest for the future rather than just consume today. Rising

:01:18. > :01:22.productivity and technological advance has meant that each

:01:23. > :01:27.successive generation has enjoyed better living standards than the

:01:28. > :01:33.last. But that may be changing, according to the resolution

:01:34. > :01:40.foundation, people born between 1945 and 1965 will urge an average of

:01:41. > :01:57.?740,000 over their lifetime. The impact of the financial crisis

:01:58. > :02:05.and the changing labour market means that millennials could earn just

:02:06. > :02:09.?825,000, a fall of 1%. But it is not just about incomes, we spoke to

:02:10. > :02:16.one father and daughter about their lives. I left university in 2015 and

:02:17. > :02:20.because of this I am in just over ?40,000 worth of debt. I feel very

:02:21. > :02:27.positive about the opportunities available to me and the career ahead

:02:28. > :02:31.of me but I do feel like I am less advantaged in the generation before

:02:32. > :02:35.me. Like a lot of people my age, I live in a shared house, the idea of

:02:36. > :02:39.buying a house on my own is pretty unforeseeable, as a young person and

:02:40. > :02:44.in today's market, finding a job, let alone a pension, can be hard. I

:02:45. > :02:51.think I'm not only speaking for myself when I say that life can feel

:02:52. > :02:55.a little precarious. My 1970s university education was free, at

:02:56. > :02:59.203I was in a secure big company job with a good pension scheme and

:03:00. > :03:03.bought my first modest house, and was paying off a mortgage, not

:03:04. > :03:08.student debt. My grandad retired at 65 and live two years, IM62 and

:03:09. > :03:12.hoping for a lot longer to enjoy life with a good pension, debt free

:03:13. > :03:17.home and savings, plus free bus pass, prescriptions, winter fuel

:03:18. > :03:21.allowance... I ask myself, do I really need it, when young people

:03:22. > :03:25.are finding things so much tougher than I did. Here to discuss this are

:03:26. > :03:31.three experts and three generations, a millennial, a senior researcher at

:03:32. > :03:37.the research Boro solution foundation and author of the report

:03:38. > :03:41.stagnation generation. Angus, a baby boomer, entrepreneur, and founder of

:03:42. > :03:45.the intergenerational foundation. And a member of the so-called silent

:03:46. > :03:50.generation. In between the world wars, president of the pensions

:03:51. > :03:55.policy Institute and chief executive of the International longevity

:03:56. > :04:03.Centre, which looks at demographics. Let me start with you, millennials,

:04:04. > :04:06.your generation, they have seen the workplace change a great deal in the

:04:07. > :04:10.last 20 years or so. How is that affecting the picture, this

:04:11. > :04:14.disparity of wealth and opportunity that we are seeing between

:04:15. > :04:18.generations. A lot of people like to focus on the impact of the financial

:04:19. > :04:21.crisis and the downturn when they think about millennials in the

:04:22. > :04:26.labour market. That really is quite important because this pay squeeze

:04:27. > :04:29.in particular hit millennials just at the point where you expect your

:04:30. > :04:36.paid to be rising quickly, getting into your jobs in your 20s you

:04:37. > :04:40.expect quick progression and quick pay increases, the millennials were

:04:41. > :04:44.unlucky to be coming into the labour market in those turbulent times. It

:04:45. > :04:48.is not all about the financial crisis, there are more structural

:04:49. > :04:52.things at play here. We might look to the rise in insecure work,

:04:53. > :04:57.particularly for young people, and the slowdown in productivity growth,

:04:58. > :05:01.which is really the key. That started before the financial crisis.

:05:02. > :05:05.A mixture of cyclical changes connected to the downturn, and

:05:06. > :05:11.structural changes in the way that we work and how much productivity we

:05:12. > :05:14.have in our labour market seem to be hitting millennials in terms of

:05:15. > :05:18.their current earnings and future prospects. Certainly true that the

:05:19. > :05:22.environment is very different, not least because many young people now

:05:23. > :05:27.come to the workplace already saddled with debt from educating

:05:28. > :05:31.themselves. We have created a packhorse generation where many will

:05:32. > :05:36.leave with ?50,000 of debt, and that has a very high rate of interest on

:05:37. > :05:40.it, as high as six and a half percent, now almost 5%, which the

:05:41. > :05:45.government is charging on the debt, that is paid out of income, when

:05:46. > :05:50.they earn over 21,000 a year. The effect of it is that combined with

:05:51. > :05:56.income tax and national insurance, there are marginal rate of tax, is

:05:57. > :06:02.over 40%, 41%, it makes it very hard for them to save, and those student

:06:03. > :06:08.debts will weigh on them for the whole of their working lives. I

:06:09. > :06:13.would dispute the idea that the generations are at war because when

:06:14. > :06:16.you talk about the older generation, particularly in Europe, but in the

:06:17. > :06:25.UK more than anywhere else, that I know of, the older generation has no

:06:26. > :06:28.wish to fight the younger generation. This is their children

:06:29. > :06:31.and grandchildren. But it might be fair to say that the older

:06:32. > :06:37.generation have set up a situation which is almost automatically

:06:38. > :06:39.disadvantageous to young people but suits the older generation

:06:40. > :06:43.themselves very well. You could say that but there is certainly an

:06:44. > :06:47.adjustment needed because we were underspending terribly, certainly,

:06:48. > :06:52.in the UK, on older people, huge pensioner poverty, really bad

:06:53. > :06:56.poverty, and we dealt with that, to some extent, which is good. You are

:06:57. > :06:59.not quite right to say there is no conflict, there is not conflict

:07:00. > :07:03.between individuals but there is a conflict of interests and a conflict

:07:04. > :07:07.over resources and our argument is not only in the UK but across

:07:08. > :07:11.Europe, the older generation have taken more than their share. It is

:07:12. > :07:14.reasonable for the younger generation, millennials in

:07:15. > :07:18.particular, to complain and say it is not fair. Many people entering

:07:19. > :07:23.the workplace, when I entered the workplace it was possible to buy

:07:24. > :07:26.somewhere at least small, some sort of small property, for many young

:07:27. > :07:31.people now, even if they are entering with a solid salary, Jihad

:07:32. > :07:36.to achieve. Absolutely right, we have already talked about pay, but

:07:37. > :07:45.it is probably in housing where the generational diversity is starkest,

:07:46. > :07:49.a millennial at university is 80% less likely to own their home than a

:07:50. > :07:53.baby boomer at the same age, that affect shortages in the supply of

:07:54. > :08:01.housing, which has rapidly driven up costs. -- too -- that's hard to

:08:02. > :08:06.achieve. People focus upon millennials, they mostly don't want

:08:07. > :08:10.to do that, but the real challenges for the future, owning your home

:08:11. > :08:14.represents stability, it represents a way of building up an asset, which

:08:15. > :08:18.you can now depend upon in retirement. If we have asked the

:08:19. > :08:21.more in this current young generation who gets to retirement in

:08:22. > :08:26.many years' time without that assets to fall back on, that is a challenge

:08:27. > :08:30.for those individuals but also for the state. What if we have to pay

:08:31. > :08:35.the housing benefit or whatever the future of that looks like, the

:08:36. > :08:40.housing costs of all these gnome non-homeowners. The current

:08:41. > :08:45.challenge, the real concern is the future. To what extent, certainly in

:08:46. > :08:49.Angus's generation it was very much part of the financial plan that you

:08:50. > :08:52.would buy a house, a it off by the time you retire, so that would not

:08:53. > :08:57.be one of the costs that when you retire, what do you feel warehousing

:08:58. > :09:02.plays into this? So many older people are living in places that are

:09:03. > :09:09.quite unsuitable, and what... In what way? As you get old because the

:09:10. > :09:13.bathroom is upstairs, you are downstairs, stares make people fall

:09:14. > :09:19.and go into hospital. They are damp very often. We need to attract older

:09:20. > :09:23.people to specifically built housing for older people with care if they

:09:24. > :09:28.need it, make this so attractive that people move, and then there is

:09:29. > :09:32.plenty of housing which can be adapted very easily for the young.

:09:33. > :09:37.And we need to get a very strong public message that retirement

:09:38. > :09:43.housing with care for people who need it will make housing available

:09:44. > :09:49.for the young. And make every local authority, have a duty to consider

:09:50. > :09:55.all this, have a legal duty to do it, and build more housing for

:09:56. > :09:59.retired... Angus? It is a solution to some extent but it is not just

:10:00. > :10:02.building more housing and helping older people to have suitable places

:10:03. > :10:07.to downsize, it is a question of freeing up the housing stock, at the

:10:08. > :10:11.moment, to put it bluntly, the older generation are hogging the housing.

:10:12. > :10:14.Perhaps not doing it deliberately, it is partly because they are living

:10:15. > :10:18.longer, partly because there is not suitable places to downsize but

:10:19. > :10:23.again, as in other areas, taking more than their share, and one of

:10:24. > :10:27.the problem is they are over consuming... There is a limit to how

:10:28. > :10:30.prescriptive you can be, people have a right to live where they want to

:10:31. > :10:36.live, that is part of our society. In many European countries the local

:10:37. > :10:39.property tax, the cost of housing is higher, that pays for social care

:10:40. > :10:44.and other things, and that encourages people to downsize. We

:10:45. > :10:50.need to build more housing and use more housing, effectively. The

:10:51. > :10:55.fundamentals of downsizing in this country do not work at the moment,

:10:56. > :11:03.and nor do the type of houses that we are building. And at what stage

:11:04. > :11:08.of their lives. The other big-ticket item is the pension, this is the

:11:09. > :11:12.other big area in which millennials are facing a challenge, harder

:11:13. > :11:15.because they are earning less, but also because we have changed the way

:11:16. > :11:21.we do pensions in this country, in the UK, but many baby boomers would

:11:22. > :11:26.have been used to, particularly at their peak of earnings, getting into

:11:27. > :11:32.a defined benefit pension, guarantees you a salary for the rest

:11:33. > :11:38.of your retirement. Those have disappeared. All the FTSE 100

:11:39. > :11:42.companies offer than 20 years ago, now maybe two or three. Millennials

:11:43. > :11:46.are faced with a much less attractive pension saving vehicle,

:11:47. > :11:49.and not necessarily earning enough to put into it. On housing and

:11:50. > :11:55.pensions, what retirement looks like is much more unstable than parents.

:11:56. > :11:58.Late in the programme we will be looking at how changes to

:11:59. > :12:02.demographics and government policy has changed the balance of power

:12:03. > :12:09.between the generations and even within families. But first,

:12:10. > :12:15.representing Generation X, comedy consultant has this weeks talking

:12:16. > :12:20.point. Are you Generation X or generation Y, perhaps a snowflake...

:12:21. > :12:25.What generation are you? If pushed, I think I am Generation X, some

:12:26. > :12:29.describe me as a millennial, one thing is for certain, I am not a

:12:30. > :12:34.baby boomer. Apparently, wheat, at the end of the alphabet, are cheesed

:12:35. > :12:40.off with baby boomers, with their retiring in their mid-60s and their

:12:41. > :12:42.pensions and their comfortable trousers, but intergenerational

:12:43. > :12:47.discussion, it's a lot more complicated than that.

:12:48. > :12:55.To get the full historical picture, I went to the Epic Ireland Museum of

:12:56. > :12:59.the Irish diaspora, it is all very well to find out about what previous

:13:00. > :13:04.generations went through, what about the transfer of money between them?

:13:05. > :13:08.Neil has been studying social mobility, associate professor of

:13:09. > :13:13.economic history at the London School of economics, studying

:13:14. > :13:18.intergenerational wealth mobility and researching it using rare

:13:19. > :13:24.surnames. Surnames can be used to track families over most of the past

:13:25. > :13:27.millennium. These surnames often had characteristics that enabled you to

:13:28. > :13:30.detect what the status of the original surname holder was. We were

:13:31. > :13:36.shocked when we first did this analysis, we got far higher

:13:37. > :13:41.correlate is, a far more static society, and social mobility is

:13:42. > :13:47.glacial, as opposed to rapid, as was originally thought by economists

:13:48. > :13:51.when they estimated the numbers. Being here at the centre really

:13:52. > :13:55.gives a sense of the tribulations of previous generations. While I got a

:13:56. > :13:58.job when I came out of college, generation after me had to emigrate

:13:59. > :14:02.again during the great recession, resume agree that generation after

:14:03. > :14:06.that will have it good in the next boom but in general, you always

:14:07. > :14:10.assumed that the people who come after you are slack-jawed ingrates

:14:11. > :14:16.who don't know they're born, and you have to tell them about the time

:14:17. > :14:20.before there were marble phones. -- mobile phone. Research in Ireland

:14:21. > :14:24.suggests the relationship between generations may be more complex than

:14:25. > :14:27.imagined. Alan Barrett, director of the economic and social research

:14:28. > :14:31.Institute, explains the surprisingly finding from a long-term study

:14:32. > :14:40.called the Irish longitudinal study on ageing, Tilda for short. You

:14:41. > :14:43.often find that there is this notion of a working population paying taxes

:14:44. > :14:47.to pay the health care for the older generation, at the public level, the

:14:48. > :14:52.transfers go in that direction, but what was really revealing from Tilda

:14:53. > :14:58.was the extent to which the private level, the transfer of money from

:14:59. > :15:02.the older generation to the younger generation fastly exceeds anything

:15:03. > :15:07.going in the other direction. All this talk of surnames has made me

:15:08. > :15:09.think about my own past, who am I, really, and more importantly, is

:15:10. > :15:18.there any intergenerational wealth that I can inherit? Let's take a

:15:19. > :15:25.look. Would you look at that, my name means "king", turns out I am

:15:26. > :15:32.royalty after all, the question is, where did all the money go? STUDIO:

:15:33. > :15:39.You can find more official films on the website.

:15:40. > :15:46.Our guests are still with me here in the studio talking about

:15:47. > :15:51.generational divides. Sally, let's come to you and ask about this

:15:52. > :15:55.business of the demographics, very simply we have more people retired

:15:56. > :15:59.now, people living longer and living more healthily, the government has

:16:00. > :16:03.responded to that by making sure they are able to have sufficient

:16:04. > :16:08.income to do that, in more cases than before. That, in a way, one

:16:09. > :16:12.might argue, is part of the problem. What has the government is done

:16:13. > :16:18.right and wrong? The government has done right, almost a whole thing is

:16:19. > :16:23.right, because we had shameful levels of pensioner poverty in the

:16:24. > :16:30.UK. And what they have done is to make sure in the way pensions are

:16:31. > :16:36.provided that this does not happen largely now. But, what has not

:16:37. > :16:40.happened is because they have been protecting older people, bear in

:16:41. > :16:44.mind there are so many more, we have to spend more money on them, because

:16:45. > :16:49.they are a very important part of the population, but we need to look

:16:50. > :16:53.again at the way that pensions have been protected in the light of

:16:54. > :16:58.fairness across the generations. And, one of the ways the government

:16:59. > :17:05.has worked is by maintaining the pension level regardless of how much

:17:06. > :17:11.the national income is going up. They need to look again at that and

:17:12. > :17:15.perhaps consider what is known as a triple lock in Britain, perhaps a

:17:16. > :17:22.double lock, which would make sure from now on that state pensions keep

:17:23. > :17:25.up with the rising costs and the costs of living generally. Can they

:17:26. > :17:29.be more radical than that, you are saying they have been increasing the

:17:30. > :17:33.state pension and that is good in terms of addressing pensioner

:17:34. > :17:38.poverty but we have a huge number of pensioners who are wealthy in the

:17:39. > :17:43.UK, probably 2 million over 60s who live in households with ?1 million

:17:44. > :17:47.of assets, even if they are income poor, from a young person's point of

:17:48. > :17:51.view, it seems odd that they should be getting this hand-out of the

:17:52. > :17:56.state pension? Over the lives of baby boomers, they have seen their

:17:57. > :18:00.incomes progressively rising but they have also been beneficiaries of

:18:01. > :18:06.government support as well. They have done well in that sense from

:18:07. > :18:09.two quarters. Absolutely right, we often think about what will happen

:18:10. > :18:13.to tax and benefit policies in the next five years, but for a true

:18:14. > :18:17.intergenerational perspective we need to look across lifetimes. That

:18:18. > :18:21.is hard, we have to make assumptions about the future but the best

:18:22. > :18:25.analysis suggests the baby boomers, if you add up all the taxes they pay

:18:26. > :18:29.in and all the benefits and welfare support they take out, they have

:18:30. > :18:34.been net beneficiaries of the welfare state, partly because there

:18:35. > :18:37.was lots of them in working age and fewer retirees ahead of them said

:18:38. > :18:42.they did not need to pay so much tax to fund the health and care. As they

:18:43. > :18:45.move into retirement, that starts to shift and it looks like the

:18:46. > :18:49.generations coming after the baby boomers take much less benefit over

:18:50. > :18:55.the lifetime from the welfare state or may even be net contributors.

:18:56. > :18:59.Paying in more than they get out. The ups and downs of generations

:19:00. > :19:03.connected to the ups and downs of demographics to create an unequal

:19:04. > :19:08.picture in terms of what the welfare state does for each of them. Let's

:19:09. > :19:12.ask you about what you made of the Brexit vote in terms of whether it

:19:13. > :19:18.is revealed in intergenerational divide? The problem is that we have

:19:19. > :19:22.a divide in how people vote, younger people much more likely to vote for

:19:23. > :19:25.remain, older people much more likely to vote for the leave. Of

:19:26. > :19:31.course there were some younger people were voting for leave but

:19:32. > :19:35.what it highlights is that younger people and older people tend to vote

:19:36. > :19:38.differently, but the problem is for younger people that the older

:19:39. > :19:43.generation have more voting power now. The next general election in

:19:44. > :19:49.the UK, there will be more over 50s voting than under 30s, not only are

:19:50. > :19:53.there more of them voting but they lobby more, the MPs and the

:19:54. > :19:57.policymakers are more likely to be baby boomers and so their interests

:19:58. > :20:01.tends to be treated as less important. That raises a really

:20:02. > :20:04.important practical challenge, basically two things underlined what

:20:05. > :20:08.you said: there is quite a lot of baby boomers, they are a big cohort,

:20:09. > :20:13.but also they are much more likely to vote, this turnout divides did

:20:14. > :20:18.not always exist, to some extent it did but it opened up in the 1990s.

:20:19. > :20:22.Our research shows that the turnout among the younger generation fell by

:20:23. > :20:26.one third in the past few general elections in the UK. We have said

:20:27. > :20:30.that we don't necessarily think this should be thought of as a war, that

:20:31. > :20:33.generations want the best for each other but if we make tough decisions

:20:34. > :20:39.then we need a democratic consensus to doing that. You are a keen

:20:40. > :20:43.supporter of working past the official retirement age. Work is

:20:44. > :20:48.changing dramatically and there is no reason why we cannot work, we

:20:49. > :20:54.work flexibly, we then have a break and take up a new career, or a new

:20:55. > :20:58.sort of skill. We have two are just very quickly to the new workforce,

:20:59. > :21:02.and there is really very little in the way of an age barrier to that in

:21:03. > :21:07.the same way as women and men can now work later, take breaks, come

:21:08. > :21:12.back, keep learning, keep changing. It is up to employers as well to

:21:13. > :21:17.make sure that their employees can continue to train and learn and

:21:18. > :21:20.retrain. Let me ask you, do you have a sense that people in your

:21:21. > :21:25.generation are planning their lives differently? Do they expect to

:21:26. > :21:29.re-educate themselves in their 40s or 50s when they become middle age,

:21:30. > :21:34.is that an expectation, that they will simply have to work longer? Do

:21:35. > :21:38.you see a difference between you and people in their 50s? There is

:21:39. > :21:42.definitely something is that members of my generation see differently,

:21:43. > :21:48.working longer is a part of that. Really big-ticket items, your house,

:21:49. > :21:53.your pension, what you want from retirement, settling down and having

:21:54. > :21:58.kids, the really striking thing is attitude across the generations have

:21:59. > :22:02.not shifted. We may have iPads and be able to travel all over the

:22:03. > :22:06.world, we may be seen as footloose and fancy free as a generation but

:22:07. > :22:10.on the important economic milestones, we want the same things,

:22:11. > :22:14.we want the house, the pension, the stability, we want to bring up

:22:15. > :22:18.children in a world where growth and progress means they will do better

:22:19. > :22:23.than we did. That is what binds together the generations. We have

:22:24. > :22:25.said it is not war, politicians need to pursue those ends for us. Dinky

:22:26. > :22:35.very much for all of you. That is it brought this edition of

:22:36. > :22:43.talking business, next week, we will be in Washington for inauguration

:22:44. > :22:45.special. -- Talking Business. Looking at the challenges ahead for

:22:46. > :22:49.president Donald Trump.