This document discusses challenges facing younger generations in the UK. Younger people now earn less, have lower incomes, and find it more difficult to purchase homes compared to previous generations. As a result, overall wealth is lower for younger people. Housing and rent costs have increased significantly without comparable increases in wages. This has contributed to wealth inequality between generations and difficulties for younger people in saving and accumulating assets. The document calls for policies and community efforts to address economic and social imbalances between age groups.

1. RF
.
Stagnation generation:
social justice and the
generations
.
Daniel Tomlinson
@dan_tomlinson_
.
July 2017

2. RF Intergencommission.org 2
1. Scene setting
2. What’s happened?
3. What does this mean for the future?

3. RF Intergencommission.org 3
Setting the scene

4. RF Intergencommission.org 4
Before we disappear down the rabbit hole…
UK inequality (as measured by the GINI coefficient)

5. RF Intergencommission.org 5
Jumping in…
Average annual income growth (2002-03 to 2015-16)

6. RF Intergencommission.org 6
This stuff does matter: 1) For our politics
Party vote share in 2017 general election (Source: YouGov)

7. RF Intergencommission.org 7
Representative profiles for tax, welfare and public spending
by age: Office for Budget Responsibility (2015), UK
This stuff does matter: 2) For our public services

8. RF Intergencommission.org 8
This stuff does matter: 3) For our society

9. RF Intergencommission.org 9
What’s been going on?

10. RF Intergencommission.org 10
PAY: it’s not just a crisis thing
Growth in pay at age 25 between successive five-year birth
cohorts: Real weekly pay (RPIJ-adjusted), UK

11. RF 11
Routine
manufacturing
40% Basic retail Bars &
restaurants
x2
Change in employment level of men aged 22-35 between1993 and 2015-16
Part-time work in
low-paid sectors
x3 x4
JOB CHANGE: for young men things have changed fast

12. RF Intergencommission.org 12
MOBILITY: the young need to get moving
Proportion of employees moving jobs over a year for selected
three-year birth cohorts: UK, 1992-2016

13. RF Intergencommission.org 13
MOBILITY: the young need to get moving
Proportion of employees moving jobs over a year for selected
three-year birth cohorts: UK, 1992-2016

14. RF Intergencommission.org 14
TRAINING: it’s declined fastest for the young
Share of employees receiving ‘off the job’ training in the past
four weeks, by age: UK

15. RF Intergencommission.org 15
Benefit expenditure per head of population: Reduction between 2015-
16 and 2020-21
GOVERNMENT: it isn’t helping

16. RF
What does all of that actually mean?
Intergencommission.org 16
Average household income by age for each generation: real income
after housing costs (adjusted using AHC deflator), GB

17. RF Intergencommission.org 17
With lower incomes, it’s
difficult to get higher wealth…

18. RF Intergencommission.org
18
Total wealth: 2012-14 (nominal values), UK
Britain is wealthier than ever, with property and pensions the biggest
components

19. RF
Wealth is crucial for future living standards, particularly in
retirement. Property and pensions are the major asset types
Intergencommission.org 19
Median household wealth by age: Median for each wealth type, 2010-12,
UK

20. RF
Wealth is crucial for future living standards, particularly in
retirement. Property and pensions are the major asset types
Intergencommission.org 20
Median household wealth by age: Median for each wealth type, 2010-12,
UK

21. RF
The time required to save for a house deposit has grown from 3
years in 1997 to 20 years today
Intergencommission.org 21
Number of years required for low to middle income
households to save typical first-time buyer deposit: UK

22. RF
Meaning the millennials so far are less likely to own their home
than even the pre-war generation
Intergencommission.org 22
Home ownership rates by age for each generation: UK

23. RF
Housing is a great vehicle for wealth transfer
Intergencommission.org 23
• Combining the two (related) trends of lower home ownership
and higher rents, so far the average millennial has spent
£44,000 more on rent in their 20s than the average baby
boomer did…
• …More time spent renting means less time building up an
asset base…
• …Instead it’s time spent contributing to others’ asset
accumulation: half of all the rent that goes to private
landlords (as opposed to institutional owners) – or around
£4 billion per year – goes to baby boomers

24. RF
Adding in all other forms of wealth gives this picture
Intergencommission.org 24
Change in median family total net wealth per adult as % of preceding cohort's
wealth at the same age: 2006-08–2012-14

25. RF
Summing up…
Intergencommission.org 25
The younger generations are:
•getting paid less
•suffering from lower incomes
•finding it more difficult to get on the housing
ladder
•Not very wealthy, at all

26. RF Intergencommission.org 26
How do we change this?

27. RF Intergencommission.org 27
Remember that politics matters. The power of the ballot box…

28. RF
Remember that place matters. The power of community…
Intergencommission.org 28
Level of age segregation in 25 largest urban areas: Index of dissimilarity
score (proportion of retirees who would have to move to be evenly distributed among 18-34 year
olds), Intergenerational Foundation analysis, 2016, England and Wales

29. RF
Does lack of interaction (partially) explain this?
Intergencommission.org 29
Preferred policy for paying for the rising cost of state
pensions, by age: 2006, UK

30. RF
Questions for us all…
Intergencommission.org 30
• Can we design programmes to help young people progress in the
workplace?
• Are we encouraging businesses to train and develop young people? And
encouraging young people to look around for a better deal in the
workplace?
• Are we building communities and organisations that bring people together
rather than fence them off?
• Are we organising and campaigning for better standards in the private
rented sector? And for more housing generally?
• And encouraging young, and old, to the ballot box to vote for policies that
will even out the generational imbalances?

31. RF
.
Stagnation generation:
social justice and the
generations
.
Daniel Tomlinson
@dan_tomlinson_
.
July 2017