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No job, no home and no future: graduates' poisoned inheritance
Debt-ridden, overtaxed, disinherited and unable to afford a home, today's graduates face a a life of hardship
I graduated from university 26 years ago. I didn't appreciate it then, but we were the lucky ones. The middle class twentysomethings entering adulthood in 2009 are going to find it a much harsher experience.
Take housing. In 1983 it was still possible for first-time buyers to find a home relatively easily, especially outside London. Then average house prices were less than five times typical salaries. Now that ratio is almost twice as much. The average age of a first-time buyer is 35 - perhaps seven years older than it used to be. In the last three decades property prices have risen ten or even twenty-fold in value: those who have been on this lucrative bandwagon are the beneficiaries.
But the unfortunate ones who are yet to join the party have lost out - because that sort of house price inflation may never be seen again. The great boom is over. Consequently the new arrivals are very unlikely to see such property windfalls - when they can actually get on the housing ladder.
The government is burdening our young with an empire of debt
A second blow: during my adult lifetime the provision of pensions has collapsed in the private sector. The vast majority of defined benefit schemes have shut to new entrants. The 'I'm All Right Jack' mentality prevails for those already covered - the newcomers have to make do with defined contribution schemes, which are far less generous.
The cost to industry of paying for final salary pensions means there is less money to invest in new ventures - which create wealth and jobs for the future. Recent estimates put the black hole at £250bn - that is what today's companies have to pay to current and future retirees in such schemes - most of whom are well over 40.
When occupational pensions were first invented most people lived just a few years after retirement. But with increased life expectancy, people now survive perhaps 20 years or more after retirement. As people become older and more frail, so healthcare costs rise inexorably.
Spending on health as a percentage of our GDP has risen by 60 per cent in the last ten years. New Labour sees this as a wonderful thing: economists might argue it is yet more unproductive spend which cannot be sustained.
The new grey generation has a different attitude to spending than their parents did. They are more likely to live for today than spend for tomorrow. Their parents suffered through the war and the strictures of rationing. But today's forty- and fiftysomethings were the first teenagers, growing up with television, foreign travel and pop music. They do not believe in self-denial. They will live longer and spend more than their predecessors, and leave little for their descendants. They will consume rather than preserve.
Our public finances are a mess, and so taxes must rise to pay the bills for the downturn. The government is burdening our young with an empire of debt. Those new to the workplace will have much less after tax income to spend themselves; our currency will be worth less and so we shall be poorer in the world. Meanwhile state spending will have to be cut to satisfy our creditors, so public services are likely to deteriorate.
And perhaps the most vicious blow: jobs. Some experts project that there will be 3.5 million unemployed in Britain within 18 months. That would be the highest level for at least 20 years. It means hundreds of thousands of new graduates will spend many of their most productive years idle, growing disenchanted with the system and making no progress in their careers.
I spent my twenties working furiously, taking almost no holidays, because I was ambitious and I wanted to get ahead. Today's equivalents will find that the law of 'last in first out' applies in most down-sizing organisations. There is nothing more demoralising for a society than high structural unemployment among its able-bodied young - but that is the almost certain prospect in the coming years.
I am sad to say I have few words of hope for those half my age. There is even a danger of inter-generational conflict, as the demographic and debt load drive many tens of thousands of twentysomethings to drugs, depression, crime and violence. We have gifted them an inheritance of dust. ·
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I am disgusted at some of the comments posted on this page. I come from a working class family. My parents earned next to nothing, and my family never went on holidays. I had to work all year round in summer and P/T jobs to pay for my BSc course. I slaved for 4 years, earned my 2:1 science BSc, then won a scholarship before earning my 1st class MSc. I then took a PhD, partly because it came with a salary - my Mum lost her job and had to retrain whilst I paid her fees - I am not making this up. I have worked like hell ever since I was 15 - every job on the Minimum Wage. Today I work as a P/T parking attendant, being shouted and sworn at by drivers and staff. All my applications for science jobs have been rejected over the years. Hard work no longer pays. A degree is a waste of time.
All this generalising about 'generations' is just divisive posturing and only serves to get everyone on the defensive about their own generation and what it did or didnt do. I am in my 50's, used to be a hippy, have never lived high on the hog, or earned enough to save anything, or owned a house, and have never envied those who had more possessions or ambition than myself. I have no pension and hope to carry on working till I drop but carry on enjoying myself too. My children are in their twenties and have a similar outlook. So what? None of us know what the future will bring for those at University today but I am pretty sure they are better off for having had the chance to go, unlike most people in preceding generations. There comes a time when you have to say 'I'm grown up now, my parents weren't perfect but they did what they thought was right at the time, now I have to stop blaming them and do what I think is right'.
I realise this article was written a while ago, but came across it while looking for statistics, and frankly the comments posted by some people on here anger me.
I am in university at the moment and will graduate 2011. I will be hit hard by the lack of jobs, just as i and my friends have been in finding temporary work in the current job market. But that is not the problem here. It is the fact that my entire life my 'generation' has been painted as the spawn of the devil. We lazy, we are dangerous, we are spoilt, we are stupid, we are wrong, wrong, wrong. The world we are going to perhaps inherit is nothing but a black hole of debt, war, and a poisonous climate. We shall have no homes, a terrible healthcare system and multitudes of our illegitimate children spawning more of their own, living off non-existant benefits and drinking our way to the end of the world.
Give it a rest.
For years i have been aware of what my future may entail. I will not have the luxeries i have had, debt will have to be paid and i shall have to pay it. The pensions of the larger, longer-living generation before me shall be paid from my meagre salary, and the no-doubt increased taxes will be mine to deal with too.
Yes, i took a gap year. I worked full-time and paid for it myself. Am i enjoying university? Yes i am. Am i being a little irresponsible? Hell, yes. But i am not ignorant of the future. I am expecting to work hard, and will not shy away from it.
I think the current credit card holders, and tax payers, and almightly judges of the failings of the youth, should take a step back.
Let us have a chance. We may not destroy it. Then again we may.
But either way, you have no choice but to trust us, because like it or not, your entire 'generation' is going to need us.
This article and the following comments all make a basic mistake, generalisation. You just can't generalise a whole generation; while some in the sixties were enjoying their youth, others were working nose to the grindstone and paying into their pensions - they're the ones 'on the road' now with camper vans, trying desperately to regain what they lost as youths. The rest f us have our memories. House prices will continue to fall until they reach a level where they can be afforded again with sensible mortgages. But there's one thing this generation are going to have to cope with, and may well blame their parents' generation for, climate change and the resultant chaos that the future holds as crops fail, people starve and societies break down. Are they going to care for the old people whose uncontrolled consumption led to the situation they are in? Perhaps not. Those who are binge drinking have perhaps caught a glimpse of the future and want to anaesthetise themselves, ditto those doing other addictive drugs. And who can blame them really, certainly not those who, despite the warnings given since the sixties onwards, have continued to fuel their egos, pollute the planet and ignore the damage they were doing by flying abroad for holidays and stag and hen nights, buying food grown in Africa and flown in daily to be fresh, acting as if their unsustainable lifestyles of greed and selfishness could go on forever.
The primary picture for this article says it all: overdressed, oversexed, and overdrunk. Staggering around with bottles in their hands, the one woman looking like the model tart. Today's twenty-somethings are the products of their time and their generally lousy parents, said parents having taught them little more that to have a sense of entitlement to anything and everything, and all without having to work hard to get it. They have have also been taught to take no responsibility for anything - it's all society's fault. They are, in general, the most unsympathetic generation in history, and the most coddled. Generation wonderful? Gag!!!
The long term ratio of average salary to house prices is in the range of 3 to 3.5 times. Thats why this bubble had to burst. First time buyers will again get a chance to get on the ladder, they just have to wait. People have to wake up to the realities of their own personal finances - live within your means. The wanton consumerism and associated waste of the last few years is not something we should really want to see. It is ultimately paid for by the third world. All of this was in the offing and should have been foreseen by most people with half a brain and a memory of what it was like growing up in the 70s/80s/early 90s. Personally I don't believe this generation has it any worse than I had it when growing up. I qualified into the 90s recession. Consequently I know the value of money. Thats a good thing.
O,Mr Johnson,please, you sound like the old bogeyman-My children are twenty-somethings,I know dozens and dozens and dozens of their friends-I ease-drop on what they are doing with their lives and I am very impressed-Contrary to your observations,I see a generation of serious thinkers,conscious,moral souls with profound values that they are standing up and living by-In fact I am often overwhelmed when I hear what some of these kids are doing with their time-they want to be apart of the world and give their time and energy to make it a better place- I see a generation of truly beautiful conscious,caring human beings-not only are they buying homes,they convert them to sustainable energy,then teach and share their skills-I see kids who pay their way to Peru,to make films about the endangered Amazon and the effects the multi-national companies have on indigenous peoples lives-I see so much evidence around me... these kids are generation wonderful
So, why are they at "uni"?
I don't suppose lack of funds will stop them "having fun" or having a "gap year".
The message to them should be - grow up, get out there and grab a job, even if it's temporary, until the right one comes around.
It's only 60 years since kids left school at 14 years old, and worked in coal mines and steel factories.
If the twenty somethings drink too much, eat badly and do drugs they will not live as long as the generation that lived through the War. We were disciplined into self denial and were fed better than modern youth, no sweets, fatty hamburgers etc..
So the pendulum might be about to swing in the opposite direction.