Millennials and Baby Boomers, with only one generation separating them, are often depicted as somewhat resentful of one another.On the part of Millennials, such resentment typically takes the form of sentiments like this:
It is this perceived economic inequality which will be examined here, not Boomer criticisms of Millennials as entitled, selfish or lazy, simply because the former is far easier to quantify. But is the complaint grounded in reality? At least in the UK, as this article will discuss, economic conditions for the two groups in their formative years were not as polarised as the tweet above might suggest. However, such resentment might become justified when comparing the two groups in the present day, given the Boomer advantage in terms of salary, housing and employment. Nonetheless, there is a vast diversity of experience within the Baby Boomer generation, and clearly those that disadvantaged Millennials are upset with are the privileged. Perhaps, therefore, it is unfair to speak in such general terms, albeit a convenient way to categorise.
The two groups are defined, simply, by the years of their birth, thus making any discussion about them incredibly broad. Baby Boomers are defined as those born between 1946 and 1964. Millennials, meanwhile, are those born between 1980 and 2000.
To examine comparable periods in each generation’s life, early adulthood must be the chosen period: although the oldest Millennials are now 36, the youngest are only 16. If, for the purposes of argument, the economic situation when both generations were eighteen, at the beginning of their adult lives, is examined, this gives two time periods: between 1996 and the present for Millennials, and between 1964 and 1982 for Baby Boomers.
Unemployment figures are one comparable area that can be extremely important, as work, or the knowledge of the ease with which one can expect to find work in the near future, has an impact on the lives of young adults. In 1964, as the first Baby Boomers became adults, unemployment was, on average, around 1.7%. By 1982 this had risen dramatically to 13%. Over the 18 years, there was, on average, 4.6% unemployment. Notably, it was only around the mid-seventies that this figure began to rise even above 3%. Meanwhile, in 1996, unemployment stood at 8.1%, and in the present day, rests at 5.4%. This means that Millennials, in the same period of their lives as when Baby Boomers experienced a mean 4.6% rate of unemployment, have endured on average the higher rate of 6.2%.
Although the average is higher, thus connoting that Millennials will encounter more difficulty entering the job market, it is worth noting that the Baby Boomer generation experienced greater extremes. For Millennials, unemployment has largely fluctuated between 4% and 8%. Boomers, meanwhile, experienced lows of 1.5%, as well as the 13% high. Although perhaps this means that they felt more secure initially in being able to find employment, by 1982 they were suffering greater levels of unemployment than Millennials have ever experienced, despite the latter arguably having more reason to be insecure about finding work overall.
Of course, employment is not the only economic consideration that might affect a person’s life. Government spending, for instance, could have a very positive effect on it, and for these two generations in their formative years, spending is very comparable, again. In 1964, it stood at 38.35% of GDP, increased to 45.56% in 1982, and experienced an all time high of 46.4% in 1974. In 1996 government spending stood at 38.93% of GDP, fell to 31.51% in 2012 and reached its all time high in 2009, at 45.47%. In both time periods government spending has drifted at around 35-45% of GDP .
To add to this, growth of disposable income displays a similar pattern to the unemployment and spending figures above. For the Baby Boomers, percentage growth of disposable income fluctuated wildly. Some years, it increased by as much as 8.4%, but there were also numerous years where real household income fell. For Millennials, despite low growth rates, real disposable income has grown consistently year on year since 1996, only falling in 2010.
Thus, economically, in the UK, Baby Boomers and Millennials have faced relatively comparable economic situations in their first years as adults. The latter are, on average, slightly worse off in terms of employment and government spending, a difference which is exacerbated depending on the years one takes as examples. Even within the limits set within this article there is a huge amount of change for both generations. An older Baby Boomer, who entered the job market with 1.7% unemployment, might find it difficult to empathise with a Millennial’s difficulty in finding employment. However, if a younger Baby Boomer had to initially find employment with 13% unemployment in 1982, they might sympathise better or, indeed, feel that they had to find work in a trickier climate. In essence, within these generations, life experiences are incredibly diverse, and it is impossible to representatively elucidate the economic pressures and benefits on and for each generation. There would have been a multitude of other factors not investigated here too – gender, class and race, for instance – which would have further shaped the experiences of the individual. What the above does show, however, is that there is little economic reason, at least examining the formative years of both groups, for resentment to breed.
Logically, therefore, such resentment must grow from economic differences between the groups today. As noted above, Millennials are still young adults, aged 16-36. Baby Boomers are aged 52-70. Let us, therefore, re-examine the issues investigated above, looking specifically at the differences between these two age groups:
In terms of unemployment today (see page 8), Millennials do suffer much higher rates in comparison to Baby Boomers, and perhaps this begins to explain some of the resentment. In 2013, 16-17 years olds in the UK had 35.9% unemployment, 18-24 year olds had 18% unemployment, and 25-34 years olds 6.7%. The Boomer age categories, meanwhile: 50-64 and 65+ had a 4.4% and 2.1% unemployment rate respectively. It is worth noting that the Office for National Statistics states that the numbers for the 16-17 and 65+ categories in particular will be ‘influenced’ by relative ‘inactivity’ within the groups, but the point stands for the other categories. Within this, it is notable that Millennials consistently earn less than Boomers, even when employed. Statistics for 2013-14 show that, before tax, under 20s earn a mean salary of £13,800, 30-34 year olds earn on average £29,800, and on average, from under 20 to 34, the mean salary is £21,175. Meanwhile, 50-54 year olds earn, on average, £38,500, dropping to £27,000 between 65 and 69. On average, nonetheless, Boomers make £33,125 – a difference of £11,950 per year.
Finally, Baby Boomers have another significant material advantage: they are more likely to own their own home, giving them greater financial security.
As the graph above shows, after 1991 – at which point the oldest Millennials would only have been 11 – young home ownership decreases significantly. This needn’t necessarily imply that they will never own a home, but in line with this trend, first time buyers are becoming rarer, and house prices are rising. The Baby Boomers, therefore, on top of higher incomes, seem to have the upper hand in the housing market too.
Therefore, it seems, any resentment between the two groups, at least from a basic economic perspective, must logically come from today’s conditions, where Baby Boomers have a significant advantage. Furthermore, given that in early adulthood neither government spending, unemployment or disposable income were too dissimilar in real terms for the two groups, perhaps the case is simply that Boomers are more established. In most cases they had, on average, a small advantage, but this was tarnished by economic fluctuation: thus creating greater diversity of experience within the generation itself. Millennials, although on average carrying a small disadvantage, have not experienced such wild fluctuation in many areas, and have their whole lives to establish themselves. Thus, although this generation may very plausibly find itself unable to flourish, more time needs to pass for any definitive statement to be made. Millennials could still succeed.