The economic generation gap

The topic of how different generations are bearing the brunt of the Great Recession may not make front page headlines, but it’s simmering beneath the surface, particularly in Britain.  Cuts in university funding are reducing the number of student places available in 2010; unemployment levels are highest among the 18-24 age group; young people remain dependent on credit cards even in the recession, and it is increasingly difficult for them to get on the housing ladder.  Much of this is not news, but when set against the longer term implications of yawning government deficits, mounting national debt and an ageing population (with increasing demands for pensions and health services), the question of generational injustice raises its head. 

Although individual families may have invested in their children’s future, collectively has the baby boomer generation been more irresponsible than prudent in its attitude towards subsequent generations?  While the ageing population is due to demographics (notwithstanding that lower birth rates are due in part to wanting to increase present consumption), the generation now under 30 will face higher costs for housing, education and pensions for many years to come – forced, in part, to pay for the borrowing and consumption decisions of their parents’ generation.