Have the Boomers Pinched Their Children’s Futures? - with Lord David Willetts

if you had a choice between being born in a very large cohort with many other people the same age as you or a small cohort not many people in your age group compared with the generations older and younger than you which would you choose the conventional answer the common sense really is choose to be in a small cohort travel through life business class not economy class fewer competitors in the jobs market fewer competitors in the housing market so life should be easier the argument and that was the argument of classic demographers from Malthus through to Richard Easterlin the argument in my book the pinch is that if you look at modern Britain the opposite is the case being born in a big generation is better than being born in a small one and the big generation I'm particularly thinking of the Boomers and I see perhaps one or two examples here in the Royal Institution this evening and this chart defines who the boomers are and shows just how big a generation we are because this is the instead of all the elaborate sort of fertility rates this is just a very crude chart of how many babies have been born in the United Kingdom over roughly the last century and you can see and I think this chart is one of the most informative charts in explaining social and economic change in Britain you can see how few babies were born in the into warriors that big dip the birthrate fell down to about 600,000 or so it's low points and that helps to explain Thatcherism by the way because what that tells you is that 6070 years later in the 1980s and 90s Britain didn't have many pensioners and pensioners drive up public spending and then look at those twin peaks which define the baby boom for two years in 1947 and 1964 when we had more than a million babies born although there is a lot of elaborate economics and demography behind that I would just observe it was after two very cold winters followed by that extraordinary fall in the birth rate to a low point in 1977 after a very hot summer now the between those two peaks of more than a million babies born we never had less than 800,000 babies born and as you can see it's been very rare that since then we've had NF we've reached the 800,000 figure again so the baby boom of course there's no kind of official definition it's emerges from demographic analysis and cultural trends that baby boomers I define as that 20 year segment people born 1945 1965 including the twin peaks and just think of those that big cohort working its way through society like a Python swallowing a pig just working through and you have an having a surge of young people is very disruptive 20 years after that 1947 peak there were the Grosvenor Square riots 20 years off the second peak there were the poll tax riots there it is very hard for a society to absorb very large numbers of young people and the core argument in my book however is that big generation had shaped Britain in our own interests I've now confessed I'm a boomin myself in fact I find most of these discussions end up where you every intervention begins a bit like one of those sessions of Alcoholics Anonymous I can I confess I was born in 1961 I'm a baby boomer so the argument is that that big generation the Boomers despite apparently the common sense proposition think it was going to be so tough for us we're a big generation in the modern world being a big generation works to your advantage first you have the spending power there's lots of consumers so you shape markets that's why the Rolling Stones are still on tour that's why the Mini is still being manufactured so you shape markets if you're a big cohort and secondly and it's very topical if you're a big cohort especially when government's do a lot when you have a big welfare state and a big tax system you have a lot of votes you have voting power for everyone boomer who votes in this election there will be about five hundred and thirty thousand other voters of exactly the same age for every young person who votes in this election there will be about four hundred thousand other voters of exactly the same age so you have market power and you have political power so being a big generation has turned out not to be such a bad deal after all being a big generation has turned out to work in our favor and the and that is the the core proposition of my book now I'm now going to take you through some of the evidence as how this is working out and it's evidence about what's happened to incomes it's evidence about what happen to the assets we own it's evidence of our hazard welfare state has been shaped to our advantage first of all and I should explain just in terms of the methodology and the this is the Royal Institution we've got to be rigorous you don't want anecdote you want proper you want proper social science and evidence oh when I talk about generations get back is so when I talk about generations you can see there what I mean and that's partly shaped by changes in the birth rate it's partly shaped by cultural phenomena there's the baby boomers lers the smallish Generation X as the Millennials 1980 to 2000 and the generation after that who haven't yet got a name but when I talk about cohorts I mean five year groups so when we do the analysis and after and a lot of this analysis his work we've done at the resolution thanked foundation the think-tank where I chair our intergenerational Center when I talk about cohorts I'm talking about five year groups to make it rigorous so this is pay this is pay for successive five year cohorts so if you look here you can see that when the if you compare nineteen the people born nineteen eighty one eighty five their wages when they enter the workforce display the classic tradition that each successive five year qohor earns more until four people born in 86 ninety and in ninety one ninety five if anything their pay is underperforming it looks as if that pattern whereby for every successive five year cohort as you enter the jobs mark you were a bit more than the people five years before you it looks as if as a minimum that pattern has ceased to obtain if anything it's going into reverse hence the proposition one of our propositions at resolution foundation that someone aged thirty now earns no more than someone aged thirty ten or fifteen years ago so pay has stopped moving upwards at the same time the rents that people pay have gone up so that their housing costs have have deteriorated and young people aren't moving jobs as frequently as they did all this ads sorry I'm moving too fast I'm taking and let me slow down a bit so the when we try to understand why young people's pay has underperformed it looks as if one of the reasons it has underperformed is that young people aren't moving around as much as they used to both geographically and in terms of job move so they're both they're not moving house and moving job and they're not moving job as much as they used to even if they don't have to move house it looks as if young people are less mobile and we have various explanations for that one explanation is the areas where pay is high rents are now so high that after you have met your housing costs you aren't better off so the function of the market signaling function of a modern economy is not working because the gains from working in these high productivity areas are being captured entirely by property owners and none of them are going to wage earners the property owners you might guess are particularly boomers 20% of boomers have a second home which they rent out so there is a so young people are less mobile and that's one reason why their pay has underperformed because they're all because housing is so expensive young people are also much less likely to be homeowners I'll show you a side on that in a moment there's less local authority housing so they're very likely to be in the private rented sector so the increase in young people in the private central sector is another very big social and economic change and this is where it gets real some of this is not just economics this ultimately gets down to the realities of the quality of life that young people have and one way in which the quality of their life is deteriorated is they literally have less space so what this chart is telling you is that the if you are an owner they say they the purple dot is where you were in 1996 and then this turquoise dart is where you are in 2013 so be you young or old if you are an owner the amount of space that you occupy has increased so homeowners have more space than they used to have but the bad news is there aren't many homeowners aged under 45 those who are they're fine if you are a private renter the space which you occupy now especially if you are under 45 is significantly less than the space you would have had 20 years ago this is the difference and the majority of young people are private renters and although the problem for private renters is equally acute if you're older there aren't many people there so by and large the owner the older person story is that one they are owner occupiers who have more space and the young person's story is that one their private renters under 45 and they have less space so young people have just occupy less space than they used to have in fact although later on I will talk about the phenomenon of the bank of mom and dad there's another equally significant phenomenon the warehouse of mom and dad and because don't don't you observe you're holding a lot of your kids stuff and the reason why we're holding all that kid stuff is they don't have the space to take it with them so there is the we the boomers have the space the youngsters don't have the space they didn't have to leave their stuff with us which instantly is one of the many reasons why they're not so geographically mobile we'll turn to that but one of the other features of modern societies contrary to them it the other question I could have asked you at the beginning is do you think in the modern world the family would become more significant or less significant and the conventional view among sociologists it was and part of modernity families would be less significant social entities in reality what's happening in modern world is the family is changing character and becoming more significant the family is is crucial the ties particularly financial ties of dependence which now lasts for so long from children children to their parents mean that the kids stay living with near where their parents are one of the often implicit features of the bank of mom and dad is yes will fund you of course will help out with your deposit but it'd be nice if you if you stayed around here you know we can help out with the grandkids then as we get a bit older perhaps you might turn out more and help with us bank of mum and dad lowers geographical mobility of their children pretty clear evidence on that dependence increases so these young people are earning less they are occupying smaller spaces and they are consuming less now one of the ways we boomers kind of us wage our consciences is we say look the young people may be having a tough deal but it's their fault really avocado toast foreign travel spending instead of saving it frugally like we did the only reason our house is worth so much he's we saved up and built that conservatory we forget the fact that inflation in house prices is massively more I think people are going to recognize the sort of stereotypes it well the fact is that if you look at this trend it's another very important one again it's not it's it's a fundamental one this tells us that the amount of actual spending on on housing consumption take the oldsters aged over 65 has in an unprecedented change and it's really happened quite recently this millennium has overtaken the actual amount of money that 18 20 29 s spend on consumption and I get lots of letters every time I do talk like this I get letters from these people in in neat copperplate handwriting on Basildon bond note paper in biro saying don't you now how tough things are for us and these young frivolous Millennials as blowing all their money on modern media and eating out the truth is we have just gone to the point where the person writing to me on Basildon bomb note paper is probably actually spending more on consumption than the young person is this is so we can see these effects it's it's lower pay it's lower quality of housing it's less money left for consumption now we had an event here yesterday with the British Science Association our Happ C summit here in this very lecture theatre and it was a great event and we talked about the challenges the world faces and one of the most important challenges the world face is climate change or the climate emergency is perhaps we should now call it and my next slide is one about that so part of what we boomers have done is we have emitted a large amount of carbon dioxide through our lives behind us the carbon dioxide production of the typical boomer has been very substantial and one of the most interesting examples of the challenge we are leaving behind for the younger generation is if we are to reach the maximum of one point five degrees global warming and you then factor in the reduction which is the IPCC our target as you know and we factor in for reduction in carbon dioxide emissions that is necessary in order to hold it at 1.5 degrees and then allocate it across different generations over their lives to see what happens and this tells you this is a fascinating calculation which I was able to put into the book it's only been made recently however the blue chart is world the red chart is Europe basically the Millennials have to produce in their lives one eighth of the carbon dioxides that boomers will produce in ours that is the scale of the climate change change adjustment that we are expecting the junk younger generation to take so this is partly a story of what's happening in the British economy it's partly a story of a global challenge that we face that is a massive adjustment and here we have the the typical figures there's that's what they bait the boomers the boomers in Europe the typical European boomer well in their product in their consumption during their working lives typically have 700 tons of carbon dioxide and look at what we are expecting for the Millennials and post them very big adjustment so the image with which I begin the book is that you know there is that kind of cultural meme of the care parents going away for a weekend and leaving their teenagers behind in the house and the teenagers throw a party and other people crash it and you turn up and find on Sunday evening your house has been completely trashed by your kids and my argument is actually in the real world if anything it's the opposite we have been trashing the house and then leaving it to our kids that's the question so that's what they have the economy is working then then look at how we're now let's get the role of government in this is how the tax and benefit system working and this is simply the effect of tax and benefit changes since 2015 and this is a case study in the phenomenon I was describing earlier of the political power of being a big cohort so this tells you that if you're older if anything you are a net beneficiary of tax and benefit changes and if you're young you are a net loser on quite a substantial scale from tax ability we vote for policies that help us older voters and don't work so well for a kid putting all that together and again and now this is I must be very careful I am NOT against older people I mean older people yes I had to make this absolutely clear and in some ways you could regard this chart as telling you about fantastic social progress in Britain when I first got interested in economic and social policy I worked in the Treasury in the 1980s but yet the assumption was being old equals being poor that by and large pensioners had low incomes if you do anything for over 60s or over 65s you were targeting poverty without really having to need a means test because that's where the poor people were and for 30 years the driver of policy has been the assumption that pensioner equals poor and what this again what this tells us is that now if you look at the the typical income after housing costs that at some point around 2010 pensioners caught up with working-age households this is after housing costs and allowing for household size and it's not just in the middle that the 20th percentile down towards the bottom you can see there the poorest pensioner or the pretty poor pensioner perhaps that person writing to me on a her Basildon bond note paper is actually significant as a living standards significantly higher than the poorest 20 percent of working-age families now you could regard that as social progress that being a pensioner is no longer synonymous with being poor but you just think of every feature of public policy that you interact with where the assumption is old equals poor the free admission the they are free london transport travel cards 25% of free journeys by over-60s on their oyster cards a journeys to work so you know free free access you're you're over six you're over 65 you're a pensioner free access via the a public policy is based on the assumption old equals poor that is no longer a basis on which it can be robustly defended because that's we just have to shift our way of thinking about what our society is like now I've so far I focused on income effects incomes wages benefits consumption in the next part of my talk I'm going to focus on wealthy things asset effects for things we own and here's the the start what this is this is a what's happen to house prices this is after inflation this is real house prices this shows how extraordinarily they have surged and someone was asking me before I came in whether my missus or London in the southeast phenomenon to what extent it applies across the UK this is a reminder that the same effect is nationwide donat of course on the same scale as the london effect so if you're already a homeowner you have enjoyed an extraordinary surging wealth but if you're on the outside trying to get in trying to buy a house it makes getting started harder and harder and the if and i don't believe i don't know what you think but I think it's extremely unlikely that in the next forty years we will see the kind of increase in house prices of the previous 40 years so this isn't some inevitable long term trend this has been a special phenomenon that is boosted the wealth of a cohort that has arisen the ridden this tidal wave of increasing housing wealth and it's very hard to see it's very unlikely that any subsequent generation will enjoy anything like it and it has led to a change in the mix of homeownership because what's interesting so this chart tells tells first of all the dramatic story that we reached at one point in the late eighties fifty percent of young people were homeowners that's the yellow line and now down to about twenty five percent though with a recent uptick and let's hope that's a real trend we'll see however total homeownership across the country has carried on rising and in fact reached a peak much later at 58% and is still not far off it at 53% so you formidable intellects of the Royal Institution will know that this means that fur people who weren't young homeownership has carried on rising which indeed it has we've had a shift in the age distribution of her home ownership towards older people so the home the house is the first big asset shooting up in value belonging to older people the other big asset that we all have is a pension and the pension story is very similar to the housing story older generations have had his tended to have what are called defined benefit pensions arrangements where when you go above a certain age you will be paid a defined benefit often are some percentage of your salary and often when those schemes were first introduced they were relatively modest over the decades we legislate you don't look I was part of this process we legislated to make the company pension promise more and more generous we required indexation with inflation for the pension we were required better rights for your widow or widower we required better protections for early levers so we basically took the company pension promise and legislated to make it more and more expensive what we did was we drove up there for the amount of money that employers had to put into their company pension scheme and that's the top set of charts and you can see a total of 21% going in of which 16 percent was from employers themselves so we turn these into big generous expensive pension schemes and they became a once-off special offer for our generation because the reaction of companies was to close the schemes for new members and to replace them with a different type of pension scheme a defined contribution Pension Scheme where you put the money into a pot a pot which may grow is market rise but is no there's no guarantee whatsoever of the income you will have subsequently and they put far less into that there's about five percent in total going into that and in fact to add insult to injury a lot of the younger workers in companies whose defined benefit scheme is closed to them because it's and they're in the tiny defined contribution scheme the revenues they're generating for the company are being used to plug deficits in the older pension schemes for they aren't even members of and it counts as eenz in the statistics instantly is a return to labor so this looks like labour doing okay but it'll return so late but it's not available for young people so pension ownership amongst young people the value of the pension is also much reduced compared with the value of the pension that boomers have got and the one of the reasons for the surge of boomer wealth is that the those defined benefit pensions are triggered when you reach a certain age when you reach the age of sixty-five you're entitled to X percent of your previous salary so an unanticipated increase in life expectancy increases the value of that pension promise the company might have thought they're paying it to you for fifteen years but actually going to be paying it to you for twenty years that makes it a more valuable asset no such effect with a defined contribution pension scheme defined contribution pension scheme at the end of your life you've got a pot worth 100,000 or 500,000 and it then has to be eat out through an annuity or whatever way you like over your the rest of your life however long that might be so the unearned one of the other special features of the Boomer pension Arrangements is they're worth more the longer you live which is not the case with defined contribution schemes as you put all that together and this chart shows the effect a massive concentration of wealth particularly in its two main forms of property wealth and pension wealth in the hands of the boomer generation and that is not simply a lifecycle effect of course to some extent people age 50 or 60 will have more wealth and people age 30 or 40 that's the natural process of the lifecycle but there are lots of special factors behind this particularly acute surging wealth amongst the boomers which mean it's very unlikely to be replicated and meanwhile because of house price inflation and because they keep on living longer so the pension promise comes from our worth more and more if you track it you can see how it's the boomers who are getting wealthier and wealthier and that's what this next chart shows and this is very interesting I get to take a moment to explain it to you but this one is showing for any age group for people let's take people aged let's go to the peak people aged 70 to 74 in 2015-16 so that includes the first boomer peak of people born in 1947 compared for them their wealth compared with people of that age five years earlier is 39% higher this is an extraordinary surge so being a 70 year old in very recently you're significantly risk more wealthy than being a 70 year old even five years sooner it's a Brit and all these massive wealth effects of people being worth more than people of the same age after five years that's all concentrated in this age group that is the boomer wealth surge and you can see it as they grow into old age the surging wealth of these people aged 72 74 65 just know you over five years is massive but meanwhile for the youngsters because they don't own a home with any house inflation and they don't have a defined benefit pension there there's no increase in the wealth of her in many of these age groups compared with people the same age five years earlier one group being a little bit better at one group some groups doing negatively so this wealth surge is concentrated amongst the Boomers um now I've told you an income I've told you taking you through the income effect I've taken you through the asset effect you can be you can begin to see how the picture is building up here and there is no one single massive sort of economic policy explains it my view is the only simple explanation is that we're a very big cohort and then whenever people say oh it's just luck and we've been lucky but if you're playing roulette and the black ball keeps on landing on the crucial square you think it can't just be luck and it isn't just that we have without even thinking through the implications we've always voted and supported and implemented the policies of work to our advantage now we're now getting older and this is a this is a a heroic chart that we have prepared at resolution foundation which tries to predict the effect of demographics on our spending on the welfare state and this is not-- some people say these because we're living longer that's part of it but it's also yes that we're a big cohort so if even if there were no increase in life expectancy the average age of Britain would increase because of this big cohort now getting older and that is driving up we trying to assume that the welfare state promise is unchanged we're not making any assumptions about policy we're trying to factor in cost pressures in the NHS plus increasing number of old people the numbers of picked people claiming the state pension and see what this does to welfare state spending and again you can see the pattern you can see why in my original chart I said that is that that is Thatcherism that is a period when there is no signal if anything of fall in the number of pensioners saving you money on pensions and the NHS so the cost of the underlying cost of the welfare state is actually declining it perfectly matches that period when governments were bringing down public spending as a percentage of GDP but look where we are now and where how things are going and it's it's interesting you could do a chart a bit like this for different countries the British story is a little bit unusual in that that's the pensions block and because we have a mixed economy and pensions and by the way this if you're wondering this saving hear you're thinking why's pensions spending if anything coming down those are the waspy women that is the effect of increasing the pension age very sharply over the last few years and there is some modest upward pressure on pensions but we have a mixed economy in pensions and we have as well as that a policy of increasing the pension age the real driver is here the purple bit and that is the NHS and Brittany's unusual we have a mixed economy and pensions a very state public spending based healthcare system so in Britain these cost pressures show up in the NHS and that means that if a government does nothing if you just carry on delivering the welfare state promises as they are expenditure on the welfare state is great is going to go up by four or five percent of GDP over the next 40 years that is the that is why the reality of politics from now on is governments will not be able to offer tax cuts the debate will be where are the tax increases they and we may this is not a political gathering but if you look at the conservative manifestos of the current one in the 2017 what's actually striking is how few promises of tax cuts there are that's because of these expenditure pressures and if you say these these if you carry on with that static model just assume those increased costs of the welfare state a met out of higher taxes these are the people who will be paying the higher taxes so basically the younger generation will be paying higher taxes to fund pensions and NHS for us on an unchanged tax system and an unchanged welfare state this is what happens so these people whose pay is not going up but finally hard gets the housing ladder who have relatively small DC pensions are also going to be higher paying higher taxes so that we can have a free health care system and enjoy our triple lock protected pensions this is an extremely inflammatory dangerous situation for a society to get into some people accuse me of promoting generational conflict I'm not I'm trying to avoid generational conflict but my fear is that if we carry on like this there will be generational conflict because it is not a society which is discharging its obligation to the young now this is one other way of trying to calculate the overall tax and benefit effects and again these are heroic these are heroic estimates you try to estimate during someone's life on the basis of the education system the health system the pension system that has obtained through their lives and the tech system where they will be as either overall net contributors or net recipients and I wanted I've commissioned this chart from our researchers because I get so many letters and when I was a constituency MP people who would come to me and say well I've paid in I'm entitled to this now in a growing economy it is perfectly reasonable for successive generations always to end up taking out more than they've paid in essentially they they enjoy in their old age some of the benefits of a bigger economy so taking out more than you pay in he's not immoral it's part of what you get from economic growth however it should be evenly distributed across successive cohorts whereas actually what you can see here is the PE looks as if our people are going to get the biggest welfare dividend and it's the same pattern yet again are the boomers who are enjoying welfare dividends of more than a quarter of a million pounds so next time some person born after the war tells you will habitat all these benefits I paid in the truth is they're probably overall on average going to be taking our 250,000 pounds more in welfare state services than they will have paid in Texas and national insurance that's essentially what they've been offered now and interestingly this Peaks not at either of the peaks of the boom this is being in the middle of the boom has brought its best benefits and I've spent a lot of my adult career 30 or 40 years working on economic and social policy trying I thought to make it better and I was born in 1956 I seem to be in the perfect place to benefit the greatest amount from these transfers so we seem to have a welfare state that has served the interests of boomers so I've taught you through the income effects the asset effects the welfare state effects now let's look at what how this is feeding through into politics and what has happened it changed the character of politics politics used to be the division between conservative and labor used to be a class divide and it looks as if class as a political barrier is far less significant if you look on the right hand side for 2017 election there wasn't really there were lots of working-class Tories there are lots of affluent middle-class labor voters there was no real class distinction in whether you voted labor or conservative the difference is a growing age divided an age has become an increasingly important predictor of voting behavior and age is the new gap between conservatives and labour and I always say this to my conservative friends who just think well it's always been like this no this again this is Thatcherism when at the same time as bringing down public spending that's when one of the decisions which Margaret Thatcher took to save public spending which she cut to the real value of the basic state pension by 5% and then linked it simply to prices not earnings for the next 15 years now that would be inconceivable now we thought that would that's beyond the realms of a politically possible now now we have the triple lock but there was a time when the conservative vote was for amongst younger people amongst 30 year olds was healthily above 40 percent and now it is down at about 25 percent whereas amongst over 70 year olds it's heading toward 60 percent so we've got an age divide in politics replacing a class divide and that and I am still actually a member of the Conservative Party and I don't want the Conservative Party to be the party of possession and not the party of opportunity we have to offer something to the younger generation now we are I'm getting towards the end of my talk and I just want to focus now on what all this means for policy and the this is a very important basis for sort of explanation of what this kind of pulls together a lot of the threads o of why I've been saying earlier and I think it's an account of quite an important account of how the British economy the British political economic system has changed so what it tells you that purple line against the right-hand axis this is about the total value of the wealth in our country relative to GDP and you can see that through the first half the post-war period the our wealth was about three times GDP but it's now been rising and has reached seven times GDP and a society where wealth is seven times GDP is very different from one where wealth is three times GDP because for example it means that what you earn is smaller relative to the value of what you own it means that trying to use your earnings to buy a house it's the egg it's the macroeconomics between that difficult of saving from your earnings to put down the deposit to buy a house you're trying to use that small GDP to get into that massive wealth seven times GDP and it's much harder when assets are worth so much more it's also a world where inheritance matters more where wealth is more important and inheriting it from your parents is a rate so inheritance is a good better more effective way of getting wealth from when it's only three times GDP and earnings is a less effective way of getting wealth that changes the character of society in a way that I think is undesirable but even whilst wealth has been shooting up if you look at that bottom line you can see that the percentage of GDP going in taxes on capital on wealth has remained extraordinarily stable and the next chart shows you kind of how what those capital taxes are and explains that peculiar dip in the middle by far the biggest capital tanks is property a local property taxes rates that perk you little dip in the middle is the time of the poll tax when for a brief time officially according to city there was no local property tax then the council tax is defined once again as a property tax but as property taxes go it is an extraordinarily regressive one in which people in a property worth 100,000 or 200,000 pay proportionate to their income or their wealth much more council tax than someone in a property worth a million or two million and that is our main property tax so we've got you can see you may see the way the argument is going we've got upward pressures on public spending public spending mainly on services for the older generations public spending on health care and pensions for them at the same time they are disproportionately owners of property but we've not hitherto been collecting any more texts from property if we have needed to increase tax we've text earnings more incomes more so I think we need to do some bold things to help younger people secure property and to help and to ask older people those in who have the greatest asset to pay more to the public services that they themselves are going to benefit from and I don't do this because I hate wealth or hate older people or believe isn't know that I don't I don't like taxes but I do think that when you look at those public expensive pressures they are certainly going to be unavoidable and one policy we've proposed is a provision of ten thousand pounds of what we call a citizen's inheritance that we should get when they're age thirty and I went on some TV interviews when we first proposed this and in the interview it said well that ten thousand pounds ten thousand pounds that that's not hardly anything is it the truth is the wealth of young people nowadays is so low that ten thousand pounds is transformational in terms of their wealth tragically it would really make a very big difference in terms of for many parts outside London getting a deposit to get you started on the housing ladder putting it into your auto-enroll to find contribution pensions that's something you could do I don't think I'm going to get into the detail of this but we are and this char is more complicated I don't think it I won't have time for questions but this is basically saying you could imagine a policy on Social Care which which does expect some private payment but with a floor and a cap a floor below which your assets don't fall which could be a floor of say fifty thousand pounds and a maximum above which you don't pay any contributions of say 100 thousand pounds is the maximum that you pay and of course also making it easier for local authorities to collect these on death from the estate and borrow money in the interim so I think there should be a policy on funding social care that is fair expects older people to make a contribution when they can afford it I think we should help young people build up an asset of their own by providing a citizen's inheritance which could be financed out of further capital taxation and I do all this in a belief in the social contract that holds a society together which is a contract between the generations and that great Tory philosopher Edmund Burke put it as beautifully as anyone has that a society is a contract a contract between the generations he a contract a partnership not only between those who are living but between those who are living those who are dead and those who are to be born that is what being a citizen of a country like Great Britain is about we are beneficiaries of what previous generations endowed us with including this wonderful institution in this fine building we also want to pass on something to our children that is even better that is one of the things that makes life worthwhile that's one of the contracts that holds the society together and we are not discharging that contract at the moment thank you very much indeed [Applause] [Music]

Channel: The Royal Institution

Views: 912,302

Keywords: Ri, Royal Institution, lord willetts, david willetts, baby boomer, boomer, economics, social policy, wealth, wealth inequality, lecture, generation gap., economics lecture, millennials, generation x

Id: ZuXzvjBYW8A

Length: 47min 25sec (2845 seconds)

Published: Thu Jan 23 2020

Reddit Comments

[u/drinks_rootbeer]

Just walk in, shake the manager's hand and walk him through your resume! What's so hard about that?

[u/WthNCellsInterlinked]

Observations on wealth effects:

• Home ownership (Boomer vs Millennial) has declined by 50%
• Pensions are now a thing of the past - Companies have closed Defined Benefit pension schemes to new entrants and replaced them with Defined Contribution plans
  • Revenues are used to "plug the holes" in pension deficits
• Boomers are largely more wealthy towards the tail end of their generation
• Government policies largely benefit the older population under the assumption that they are poor, which is not the case

[u/NevDecRos]

What do you mean "may"? They very much did. How is it still up for debate?

[u/[deleted]]

This is the tail effect of neoliberalism, when the effects of Roosevelt's New Deal were selfishly corrupted by voodoo economics

Read some of historian Professor Heather Cox Richardson's writing. She's an amazing and incredibly prolific and sane writer.

https://twitter.com/HC_Richardson

[u/WthNCellsInterlinked]

Observations on income effects:

• Boomers are net beneficiaries of tax and benefit changes
• Boomers earned more than Millennials do at the same age
• Millennials occupy less space than Boomers at a greater cost
• Pensioners earn more income than their working-age counterparts, with a higher standard of living
• Boomers largely control political power due to their age
• Millennials would need to have a carbon footprint 1/8th the size of their Boomer counterparts to prevent further Climate Emergency (Climate Change)

More to come

[u/RadioMelon]

You know the really painful part about it?

There was a guy who had a brief explanation of Boomer life.

Boomers were the hippie generation. They were the ones telling people to live free, to rebel against the status quo, and to try to let people live their lives. I'm not even fucking joking, they were born in the 1940s and were roughly in their 20s during the 60s- making them the predominant generation of hippies.

Boomers, what the FUCK happened? Seriously what the FUCK even happened??

[u/1HomoSapien]

It will probably turn out that the boomer generation, of all generations, reaped the most benefits out of industrial civilization while experiencing the least costs. However this is not the same as saying they are responsible for the current predicament, just that they got lucky. Responsibility can't be isolated to any one generation.

[u/Twivlistener]

Bruce Cannon Gibney nailed it in his book "A Generation of Sociopaths: How the Baby Boomers Betrayed America". Read it and everything will make sense in an [albeit depressing] way.

[u/Syreeta5036]

The economy is measured wrong anyways, it should be measured by how much an hour at the most common wage will get you, this happens to be minimum wage in nearly all cases imaginable, this means what someone can get per hour of minimum wage determines how good the economy is, this happens to favour areas and times where certain things are available without work, socialized if you will, it’s arguable that countries with socialized healthcare already do better than ones without, in that regard. This does mean that if everything is cheap relative to minimum wage, that a country without socialized healthcare can fair better than one with, and America has a lot of items cheaper than other countries, so it could be possible for them to have a better economy than say Canada, but the minimum wage being low means it’s likely not