Who would be a millenial?

michaels

wotsthat wrote: »

Does that mean boomers are off the hook and we now need to share the hate with Gen X'ers?

I still fully expect that millenials will be the most wealthy generation ever to have lived in the UK. Worst case scenario - they'll be in second place.

So you are challenging the assumptions made in the report that the BBC article is based on? I assume it is adjusted for inflation but suggests that average lifetime earnings of millennials, based on the path so far, will be lower than for Gen X-ers. and that is just income before we look at the cost of education and housing.

Honestly, this time it appears not just to be a bit of stating the obvious (the older you are the more wealth you have and generally the more you earn) but actually some serious number work that suggests those born later are actually earning less.

michaels

The Resolution Foundation found that under-35s earned £8,000 less in their twenties than Generation X workers.
If wages for millennials follow the same path as Generation X, average career earnings will be about £825,000.
That would make them the first generation to earn less than their predecessors over the course of their working lives.
Even if millennials' wages improved rapidly like those of their baby boomer parents born after World War Two, their lifetime earnings would be about £890,000, according to the foundation.
That sum would be just 7% more than Generation X, born between 1966 and 1980, and only a third of the size of the pay progress that generation X should enjoy over the baby boomers.

IE given wage levels and progression so far millenials will earn less than Gen-Xers if they follow the same life time pattern form this point forward. There needs to be the sort of acceleration seen by the Boomers for them to beat the Gen X-ers.

I think the relative returns to labour and capital depend on demographics and productivity (both of which are impacted by globalisation) and that part of the reason that returns to labour in the UK are held back is the elasticity of labour supply as a result of the single market in labour. Afterall we see lower goods prices as part of the benefit from the single market so why do we deny that the same thing is not happening to the price of labour?

then we exacerbate the problem in the UK but not expanding infrastructure, especially housing, to keep pace with the increasing population, pushing up the returns on capital ?(ie wealth) at the expense of the returns on labour.

To me the economics are pretty clear on this one.

stator

cells wrote: »

at the same time its going to be the generation that inherits and gets gifted more wealth than any other generation before it

When will they inherit money, when you're parents won't die until you're over 60?
Most people won't inherit much anyway. When your parents live in a care home for 20 years all their savings will be gone.

The article didn't even mention student debt, which is a lifetime paying a tax rate that is 9 percentage points higher than the older people who got a free education.

kabayiri

Does anyone still remember the premise on which the introduction of student loans was based?

I still remember some government minister of the time proclaiming the income differential : grad vs non-grad ; and how it was all worth while.

It all sounded BS to me at the time. When 50% of students now go on to HE, then students with degrees become commodity; just like their blue collar cousins.

I'm sure the answer to this dilemma is to charge yet even more for degree education

cells

mwpt wrote: »

In real or nominal terms?

in everything terms

michaels

mwpt wrote: »

In real or nominal terms?

I assumed in real terms because obviously nominal would make the picture look more rosy and I don't think that was the purpose of the report although I have to admit the BBC are not bright enough to realise it matters and I haven't checked.

cells

Graham_Devon wrote: »

This is a red herring though - for most who do receive inheritances, they receive them in their 50's and 60's.

Very few receive an inheritance at the point in life where they most need financial support (i.e when they are buying a house and having children themselves).

And to be honest, I doubt most people would want an inheritance that early.

It a bit of a "jam tomorrow" argument. Things may be worse than they have been for everyone before you, but just wait, you may receive something in 30-40 years time.

Lots of parents gift wealth to their kids well before the kids are in their 60s. Not everyone waits until they die. Also grandparents gift to their grandchildren.

Also we are arguably still in the recovery phase of the tail end of a recession so this data point may not be perfectly fair

Not to mention in the days of yesteryear people had much more physical jobs which meant they were knackered many years earlier. A person working from 20-55 might have been paid more in real terms than a person today but the person today is behind a desk and will work from 20-70 so that is 50 years of income instead of 35 years of income


Or the simplest test would be which generation would you wish to have been born to. My answer to that is this most recent generation. I dont believe for a second there was more opportunity and wealth 50 years ago no matter how cheap a two bed terrace was back then

cells

michaels wrote: »

I assumed in real terms because obviously nominal would make the picture look more rosy and I don't think that was the purpose of the report although I have to admit the BBC are not bright enough to realise it matters and I haven't checked.

The stock of wealth of the country, no matter how it is measured is greatly higher now than any other generation before it

Look at the stock of homes 28 million. How many was there in 1950? A lot more homes even on a per capita basis. Look at the stock of other capital, commercial & industrial buildings the FTSE 250 the huge amounts of cash deposits.

You then have less difficult to measure 'stock of advancements'. Like better medicine, lower crime, better educated populous, more discoveries made, more healthy populous, etc


People have never had it so good. If I could choose I would always choose to be in the most current generation. If I could choose the future I would probably wish to be born maybe in 2020 as I suspect the years 2040-2100 are going to be amazing

cells

When will they inherit money, when you're parents won't die until you're over 60? Most people won't inherit much anyway. When your parents live in a care home for 20 years all their savings will be gone.

believe me the amount of wealth in the country is staggering and lots and lots and lots of people get huge sums. people dont really talk about it because well it would be rude.

The article didn't even mention student debt, which is a lifetime paying a tax rate that is 9 percentage points higher than the older people who got a free education.

thats just silly its buying a service so you cant look at the cost without looking at the benefit. You may say the kids get no benefit from it just that is your judgement call. Even if they do really on average get no benefit from it its their free choice to make a purchase that isnt good value.

wotsthat

michaels wrote: »

So you are challenging the assumptions made in the report that the BBC article is based on? I assume it is adjusted for inflation but suggests that average lifetime earnings of millennials, based on the path so far, will be lower than for Gen X-ers. and that is just income before we look at the cost of education and housing.

Extrapolating based on a path so far when most of the path is in the future might not be the best way of predicting the future.

Say it turns out to be a truth we'll have the three richest UK generations, in order of wealth, Gen X, Gen Y, Boomers. Is that so bad?