Phil MeekinView Profile
It has recently been reported by Resolution Foundation that millennials (born between 1980 and 2000) are set to earn less over their lifetime than Generation X (born between 1966 and 1980). Some of those Generation X-er’s will inevitably be their parents. It is the first time a generation are set to earn less than their predecessors and it is a shocking reality check for many.
For years, economists and governments had grown somewhat complacent about each generation earning more than the last. Social mobility in particular is the term banded around by politicians as something to strive for and improve for every successive generation.
Your social mobility is the assets, amenities and options you have surrounding you based on many different factors including class, geographical area, wealth etc. To be able to improve upon that and have advantages your parents did not is the aim for every generation.
Unfortunately, after the financial crash of 2007 improving your social mobility and earning more than the previous generation, simply hasn’t been the case. After the markets crashed, wages fell and workers entering the market earned less than before.
These workers were mainly the millennials who were entering the job market after finishing university, school or apprenticeships. Their low wages have received minimal or no yearly increases making their earnings just enough to cover their bills and living costs. This has been the case since 2007 and it is thought that under-35’s have earned £8000 less in their twenties than Generation X did.
Although, it has been suggested that the generational pay gap started to come into effect before the financial crisis and has continued to progress since then. Just as the company’s economy and financial picture was starting to improve, we voted for Brexit. This instability in the financial market could be a catalyst for cutting earnings even further, says Resolution Foundation.
The Foundation has now launched a commission to explore the inequality between the young and the old that continues to grow. The inequalities are growing month on month with vast differences in terms of money and the standard of living.
One reason for this poor standard of living millennials are experiencing, is down to the amount of rent they are paying and the price of houses. With millennials reaching 30 having spent on average £44,000 more on rent than baby boomers (born between 1946 and 1964) and £25,000 more than Generation X.
This leaves young people with less money to save and spend on what they like and makes it harder for them to save to buy a house. Halifax have estimated that the average deposit for a first-time buyer in the UK is currently £33,000. This is out of reach for so many of those that have been dubbed the working poor. Those that are in full time employment but only just or don’t manage to meet their basic monthly outgoings.
High rents, high house prices, low wages and job insecurity have created a youth who are struggling financially to become the future of our country. Let’s hope over the next few years, we manage to reduce those financial inequalities and raise the standard of living for everyone.