Was 8th June the revenge of the millennials?

No party can ignore the concerns of the young—they're angry and now they're voting
June 21, 2017

Early on 9th June, the BBC’s political editor Laura Kuenssberg pronounced the great lesson of 2017: “This is the election where young people started voting. And it may seem that for all the political parties, the demographics of who they have to please might be shifting.” Or, to put it more bluntly, ignore the generational divide at your peril.

Theresa May never addressed them, at least not coherently, and she has suffered the consequences. Just ask Rob Wilson, the parliamentary under secretary for civil society who lost Reading East. He described the Tory catastrophe not in terms of a failure to attract the aspirational classes, the Mondeo man or whatever this year’s equivalent of Worcester Woman is supposed to be. His post-mortem was all about age. He said that May’s manifesto—with its “dementia tax,” and axing of pensioner perks—sent an “Exocet missile” through their support base, the old. At the same time Jeremy Corbyn stole a march with the young, with a clear offer including, prominently, the scrapping of student fees.

It is already clear that seats with more younger voters saw a sharper spike in turnout, and in the Labour share. This is no one-off. The European Union referendum split starkly by age: 75 per cent of 18 to 24-year-olds voted to “Remain,” a mirror image of the split among pensioners.

Most politicians and analysts are blind to this divide, and have ignored its implications. Many hold tight to the old class categories (“Maggie worked magic on the C2s”) with which pundits have made sense of things for so long. The parties have long been so convinced that the young wouldn’t vote, that offering baubles to pensioners has steadily become the only game in town. There can be no ballot box battle of ages if only one side takes part. But as someone who, along with my Jilted Generation co-author Ed Howker, has long written about age divides, I’m less surprised that a new generation has finally started to vote. It’s true that millennials—the cohort born from 1980 onwards—used to drag down youth turnout. These people, however, are no longer so young. The eldest are in their late 30s, often with their own children at school. For another, after years of painful austerity which have ignored their needs as perks for the elderly were protected, they have been provoked to the point where a clear and seductive offer from one of the big parties meets an eager response.

In one sense, every generational battle’s outcome is predetermined: only the young can win in the end. For they will always survive longest. And we are now at a demographic tipping point. The baby boomers are on the wane. Life expectancy tables imply that, in around 15 years, most of the immediate post-war cohort will be dead. (It is not by chance, but actuarial science, that so many boomers such as David Bowie, Carrie Fisher and Alan Rickman died in 2016.) Meanwhile the millennials are waxing. In 15 years, the oldest of that 13.8m demographic will be 52; by then, and likely before, they will dominate the workforce.

"Jeremy Corbyn stole a march with the young, with a clear offer including, prominently, the scrapping of student fees"
But if the outcome may be settled, the generational transfer of wealth, resources and power will be far from smooth. It will be a struggle, with a new economic settlement needed to keep the country together. To understand why, we need to look at how the boomers, the richest generation known to humanity, got to where they are. Forty years of free market liberalism have served most (though not all) boomers well. Low in-work taxes during the 1980s and 90s were subsidised by the windfall of North Sea oil. Boomers also added to their asset pile by selling among themselves things that had been built by previous generations: council housing, nationalised utilities, and mutual banks. When the government organised investment at all, it heaped the cost on to the newcomers into the system, rather than paying for it out of current consumption—so the boomers dodged the bill. Higher education was expanded, but only by rising fees and loading debt on to students. New Labour’s investments in hospitals and much else was paid for by taxing future generations through private finance initiatives (PFI).

Many of these asset-stripping actions were measured as growth at the time, but looking back, the insight of the Nobel-winning economist James Tobin seems profound. He said that questions about growing an economy always boiled down to a simple balance: the present versus the future. Before we decide how much growth to demand, Tobin said we ought to ask ourselves a more basic question: “How should society divide its resources between current needs and pleasures and those of next year, next decade, next generation?”

In ordinary circumstances, the issue is how much consumption to forgo to invest in a more productive tomorrow—so growth normally favours the young. But seen through the Tobin lens, the growth between the 1980s until the crash in 2008 was growth of a very fishy sort. It has been a triumph of short-termism while long-term interests have been left to rot. What we took for growth actually proved to be a parlour trick, a feast on stored wealth that left the cupboard bare for those who came next. The result is fewer homes, a creaking infrastructure and fewer national assets. One could describe this as market failure—where economic actors can’t stop themselves pursuing short-term gains at the cost of destroying an economy’s sustainability in the long run. However, these technical deliberations mask a much simpler label—greed.

These economic and political choices that prioritised getting rich today over building up wealth for tomorrow, have been the main driver in creating the newest political division in the UK: between the boomers who prospered from short-term economics and their children who are suffering because of it.

This has been felt especially in the UK, because we’ve been so spectacularly keen to divest ourselves of our communal wealth for short-term gain. (In 2015 the government sold more public assets than ever, including Eurostar, Royal Mail and Northern Rock, to “cut the debt” even while maintaining both a costly triple lock for pensions and universal winter fuel payments). But similar forces are at work in the United States, Australia and in Europe where the age divide also grows year on year.
"This is not about adults preferring Glenn Miller while kids dance to the Beatles. The question is far more toxic"
We have seen the creation of the new leisure class of pensioners—not all pensioners, of course, but many. For centuries pensioner poverty was a scourge that plagued even the richest societies. But in countries like Britain, that scourge is now over. Some elderly people still live in hardship, but poverty rates are now markedly higher among younger adults and working families. More retired people than ever aren’t just surviving, they enjoy a standard of living far above the breadline. It is an unnoticed but remarkable social change that tens of millions of pensioners in Europe and North America do not work for years, even decades, and yet are as affluent as workers.

On the other hand, the millennials’ income has fallen. In the UK, as Resolution Foundation figures show, they are the first generation in at least 140 years not to be richer than their parents. It is the same in the US. After more than three decades of growth, progress and technological innovation, young US adults in 1980 actually earned $2,000 more (5.9 per cent) than young adults do today. This raises the deepest of questions: what is the point of continually working, of moving forward, of “progress,” when it only delivers material decline? Millennials need an answer.

The economics of the generational divide make it so hard to solve. It is not about parents preferring Glenn Miller, while kids dance to the Beatles, or attitudes towards sexual liberation—issues that dominated the divide between the boomers and their own parents. The current question is far more caustic: how do we reconcile the interests of retired owners of assets (pensions and houses, for example) worth on average over £500,000 with those who live and work with little hope of advancement.

That one group are the progeny of the other does not seem to matter as much as the reality that one has the other over a barrel. To borrow from Marxian parlance, the older generation owns the means of production in its pensions, and a crucial part of means of subsistence, in the form of bricks and mortar. In 1967 the political scientist Peter Pulzer wrote: “Class is the basis of British party politics; all else is embellishment and detail.” In a sense, this remains true. It is just that today’s generational divides mirror many of the factors that divided classes in the 19th and 20th century. And don’t imagine that inheritance will eventually level things out. For much of the boomers’ wealth is in pensions, which can be passed to spouses, but not ordinarily children. Much of the rest is in the housing market. And even before we worry about how this wealth gets split with care homes, the dynamics are all important here. The generation that happened to be holding the title deeds over the many decades when prices defied gravity is the generation that gets to clean up. And so this really is class war by another name. But instead of the proletariat vs the bourgeoisie, this is boomers vs millennials, pensioners vs hipsters.
"Millennials are the first generation in at least 140 years not to be richer than their parents"
This economic divide is transforming social relations. Young adults simply don’t progress through life as their parents once did. More are still living at home, and they can’t “get on” at work by climbing an established career ladder in the same way. Important markers of adulthood—settled jobs, buying a home, having children—happen later, and sometimes not at all.

Millennials feel like they cannot “afford” the lives their parents once led, and that provokes other cultural divides. Children of middle-class parents don’t feel middle class themselves. They consume media in different ways, and their modes of consumption have diverged. The well-to-do boomer might reveal his prosperity by purchasing a new Lexus; the less-pinched of the millennials will make do by finding a café serving avocado on sourdough toast.

But it is less the cultural than the economic divergence in the needs of the generations—one dependent on capital and public pensions for their leisure, the other dependent on wages to get by—that have brought tensions to a head, and our political system is beginning to show the cracks. Where short-termist markets have failed to raise living standards for the young, politicians are grasping that they will pay a price unless something is done.

Until now, politics has delivered a series of stunning triumphs for asset owners. The political economy has fused benefit bribes for boomers with house-price inflation. The Brexiteers relied on the nostalgia of the boomers to buoy them to victory. But the shock of that great defeat last year has awoken the millennials from their slumber. They have suddenly grasped that the tide can be turned in their favour if they can find suitable partners at the ballot box to defend their interests. So buckle up, the great generation battle is only beginning.