Five Reasons Why iPod Generation Is Better Off: Matthew Lynn
Jan. 30 (Bloomberg) -- Today's young people appear to be locked in a kind of generational gloom.
The New York-based research group Demos recently published a book called ``Strapped: Why America's 20- and 30-Somethings Can't Get Ahead.'' And last year, London-based think tank Reform published a paper on the iPod generation -- iPod in this case standing for ``Insecure, Pressured, Overtaxed and Debt-ridden.''
If any tune is likely to come up first on their iPod playlist, it would be The Smiths' downbeat classic ``Heaven Knows I'm Miserable Now.''
It is true that, in some respects, life is tougher for the current generation of under-30s than it was for the postwar baby boomers when they were that age.
``Most people just assume that young people are better off than ever with their iPods and cheap air travel and so on, but once you start to dig underneath that there are the first signs of real problems to come,'' Blair Gibbs, one of the authors of Reform's report, said in a telephone interview.
Younger people will get much less out of the welfare state than they put in. ``The welfare state was built on the idea that all generations would pay the same,'' Gibbs said. ``The demographics mean that is now impossible.''
That means that although they are paying hefty taxes, they won't get the same free health care, education, or generous pensions that their parents did. At the same time, exploding asset prices have made property unaffordable, and the cost of education is inhibitive. The result? Life in the 20s is a hard, demoralizing slog to get on the career and property ladders.
Education Costs
In the U.S., Demos has identified similar trends. ``Astronomical student debts, depressed wages, rising health-care costs and soaring property values are just a few reasons why an entire generation of young people cannot overcome their crippling financial situation,'' it argues.
Tamara Draut, the author of Demos's book, says tuition at public universities has almost tripled since 1980. In inflation- adjusted terms, the wages of a typical high-school-educated male have dropped to $29,000 from $42,000 in 1972.
Of course, young people have always complained about how rough things are. Boomers certainly did, and so did Generation X, those born in the 1970s (spawning an unfortunate literary movement along the way). In early times, there were probably youngish cavemen wondering how they were going to club their first bison.
The big question is whether you are part of a big or small population group. If it is small relative to its predecessors -- as it has been for people born in the 1970s and 1980s -- then you wind up carrying a greater burden with fewer people. Yet you also get a bigger slice of your nation's wealth.
`More Elusive'
``Young professionals may enjoy more career options than a generation ago, but the things that really matter and determine the quality of life -- good health care, affordable college, the ability to buy a home in a safe neighborhood with decent schools -- are becoming more and more elusive,'' Demos's Draut said in an e-mailed response to questions.
It's all enough to make this 43-year-old glad to have reached the comfortable shores of middle age, or late youth. Yet, something doesn't quite ring true about all this generational angst. Surely some things have improved?
Here are five to start with.
Medicine is making huge advances, and will carry on doing so. Smoking bans will result in more people quitting the habit, meaning they will live longer and stay healthier.
Labor Migration
Globalization allows young educated people to work almost anywhere, instead of looking for a job at home. Bored with London or New York? You can make your fortune in Moscow or Shanghai.
In Britain and the U.S. just about anyone who wants a job can find one. Inflation is subdued, and central banks are a lot better at smoothing out the business cycle than they used to be. The hyperinflation, unemployment and oil crises of the 1970s weren't much fun for the baby boomers who struggled to raise families through them.
The war on terror and Iraq are mere barroom brawls compared with the Cold War when the Russians used to print maps of London with the street names translated so their tanks could find their way around town. These days, they just translate brochures to sell shares in hot initial public offerings.
Luxurious Retirement
Inheritances, at least for the middle classes, are likely to be huge. Your parents' house, if they own one, will be worth a fortune and should allow you to retire in luxury in your 50s.
Indeed, many of the specific beefs of the iPodders have a flipside that is a lot sunnier than they think. Buying your first property may be expensive, yet it also means inheritances are soaring.
And while education is more expensive than it used to be, the increased access to other labor markets offsets the cost of gaining qualifications in a global economy.
Not convinced? The wealth survey published by Capgemini and Merrill Lynch & Co. last year said there were 2.5 million millionaires in the U.S. in 2004, and 8.3 million worldwide. It has never been easier to get rich than it is today.
Life has mostly improved for each generation since the Industrial Revolution of the 18th century. There is no reason to think that has changed now.
To contact the writer of this column:
Matthew Lynn in London at matthewlynn@bloomberg.net.
The New York-based research group Demos recently published a book called ``Strapped: Why America's 20- and 30-Somethings Can't Get Ahead.'' And last year, London-based think tank Reform published a paper on the iPod generation -- iPod in this case standing for ``Insecure, Pressured, Overtaxed and Debt-ridden.''
If any tune is likely to come up first on their iPod playlist, it would be The Smiths' downbeat classic ``Heaven Knows I'm Miserable Now.''
It is true that, in some respects, life is tougher for the current generation of under-30s than it was for the postwar baby boomers when they were that age.
``Most people just assume that young people are better off than ever with their iPods and cheap air travel and so on, but once you start to dig underneath that there are the first signs of real problems to come,'' Blair Gibbs, one of the authors of Reform's report, said in a telephone interview.
Younger people will get much less out of the welfare state than they put in. ``The welfare state was built on the idea that all generations would pay the same,'' Gibbs said. ``The demographics mean that is now impossible.''
That means that although they are paying hefty taxes, they won't get the same free health care, education, or generous pensions that their parents did. At the same time, exploding asset prices have made property unaffordable, and the cost of education is inhibitive. The result? Life in the 20s is a hard, demoralizing slog to get on the career and property ladders.
Education Costs
In the U.S., Demos has identified similar trends. ``Astronomical student debts, depressed wages, rising health-care costs and soaring property values are just a few reasons why an entire generation of young people cannot overcome their crippling financial situation,'' it argues.
Tamara Draut, the author of Demos's book, says tuition at public universities has almost tripled since 1980. In inflation- adjusted terms, the wages of a typical high-school-educated male have dropped to $29,000 from $42,000 in 1972.
Of course, young people have always complained about how rough things are. Boomers certainly did, and so did Generation X, those born in the 1970s (spawning an unfortunate literary movement along the way). In early times, there were probably youngish cavemen wondering how they were going to club their first bison.
The big question is whether you are part of a big or small population group. If it is small relative to its predecessors -- as it has been for people born in the 1970s and 1980s -- then you wind up carrying a greater burden with fewer people. Yet you also get a bigger slice of your nation's wealth.
`More Elusive'
``Young professionals may enjoy more career options than a generation ago, but the things that really matter and determine the quality of life -- good health care, affordable college, the ability to buy a home in a safe neighborhood with decent schools -- are becoming more and more elusive,'' Demos's Draut said in an e-mailed response to questions.
It's all enough to make this 43-year-old glad to have reached the comfortable shores of middle age, or late youth. Yet, something doesn't quite ring true about all this generational angst. Surely some things have improved?
Here are five to start with.
Medicine is making huge advances, and will carry on doing so. Smoking bans will result in more people quitting the habit, meaning they will live longer and stay healthier.
Labor Migration
Globalization allows young educated people to work almost anywhere, instead of looking for a job at home. Bored with London or New York? You can make your fortune in Moscow or Shanghai.
In Britain and the U.S. just about anyone who wants a job can find one. Inflation is subdued, and central banks are a lot better at smoothing out the business cycle than they used to be. The hyperinflation, unemployment and oil crises of the 1970s weren't much fun for the baby boomers who struggled to raise families through them.
The war on terror and Iraq are mere barroom brawls compared with the Cold War when the Russians used to print maps of London with the street names translated so their tanks could find their way around town. These days, they just translate brochures to sell shares in hot initial public offerings.
Luxurious Retirement
Inheritances, at least for the middle classes, are likely to be huge. Your parents' house, if they own one, will be worth a fortune and should allow you to retire in luxury in your 50s.
Indeed, many of the specific beefs of the iPodders have a flipside that is a lot sunnier than they think. Buying your first property may be expensive, yet it also means inheritances are soaring.
And while education is more expensive than it used to be, the increased access to other labor markets offsets the cost of gaining qualifications in a global economy.
Not convinced? The wealth survey published by Capgemini and Merrill Lynch & Co. last year said there were 2.5 million millionaires in the U.S. in 2004, and 8.3 million worldwide. It has never been easier to get rich than it is today.
Life has mostly improved for each generation since the Industrial Revolution of the 18th century. There is no reason to think that has changed now.
To contact the writer of this column:
Matthew Lynn in London at matthewlynn@bloomberg.net.
posted by SOLEWA @ 4:14 AM
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