The Millennial Generation Is Stagnant And Older People Are Part

Tracy Alloway (0:07)

Hello, and welcome to another episode of Odd Lots. I'm Tracy Alloway, executive editor of Bloomberg Markets.

Joe Weisenthal (0:13)

And I'm Joe Weisenthal, managing editor of Bloomberg Markets.

Tracy Alloway (0:16)

So, Joe, we talk about millennials quite a bit, what they like, what impact they're having on the economy.

And you actually have a pretty good definition of millennials, from what I remember. Share it with us.

Joe Weisenthal (0:31)

That's right, I do, because there's always these debates that go on. They're like, oh, if you're born in 1981 or 1980, whatever it is. And I always kind of find that to be a little meaningless. The definition of millennial, in my view, is, did you have Facebook when you were in college?

I didn't. But it feels to me that that's important, not just from a time perspective, but because that's really sort of defining a difference in how people live, and how people interact, and how people find partners, and how people find friends. And that's such a crucial distinction, the sort of pre-Facebook crowd and afterwards, that I think it's the perfect definition.

Tracy Alloway (1:11)

Okay, so I actually did have Facebook in college, more because we were one of the first colleges to get it than me being particularly younger than you. But I guess that makes me a millennial in some senses.

So, you know, as a card-carrying millennial, one of the things I've followed very closely is the idea of intergenerational conflict. So the idea that young people are angry with old people over certain trends happening in the economy. And you've been following this closely as well.

Joe Weisenthal (1:44)

Yeah, it's a huge topic. And you really love this topic, though. You love anything relating to intergenerational warfare, or maybe warfare is too strong, but at least conflict, you get very excited about it.

Tracy Alloway (1:59)

So I guess the thing that got me most excited about it was when I first wrote about it. Gosh, I think it was back in 2009 I actually did a post under the headline, Kill the Old. And it was kind of...

Well, it was kind of tongue in cheek, but it made a serious point, which was that in the aftermath of the financial crisis, the younger generation had really been given a raw deal by the older generation. So, we were kind of paying for a lot of their excesses. We had the housing boom, which made getting a mortgage much tougher for younger people. We had pension schemes that were now underfunded, which young people have to pay for, and they don't get to enjoy the benefits. I could go on and on and on, but instead of doing that, let's bring in our guest for today. She is Laura Gardner. She's a senior research and policy analyst over at the Resolution Foundation, which is a think tank that looks into living standards, especially for poorer earners. And she actually wrote a really, really good report on this topic. It's called The Stagnation Generation, the case for renewing the intergenerational contract. So it's a slightly more sedate title than kill the old, but maybe there's some of that in there.

Hi Laura, thanks for joining us today.

Laura Gardiner (3:25)

Hiya, no problem.

Tracy Alloway (3:26)

So, maybe to begin, you could walk us through why you decided to focus on intergenerational conflict or tension specifically, because the think tank doesn't necessarily always look at this, right? You're looking usually at improving living standards for the lowest earners in the UK.

Laura Gardiner (3:44)

That's absolutely right. And the reason why we've taken this new focus on intergenerational issues is because in the course of a lot of our analysis of different living standards outcomes in the UK, these kind of intergenerational concerns really started coming through. So, for example, we spend an awful lot of time looking at what's going on in the labour market in the UK, as that's such a big determinant of household living standards. And if you look at the pay squeeze, really long and deep pay squeeze we've had since 2009 in the UK, you immediately find that young people, those in their 20s, had a much deeper pay squeeze than older workers. So they seem to bear the brunt of the pay falls and the downturn. And then if you look, say, at the housing market, and you look at how much people are spending on private rent and falling rates of home ownership, you see that very much hitting young people who are spending the highest proportions of their incomes on their housing costs.

And then you might look at pensions in the workplace and who's in receipt or who's set to get what we call kind of divine benefit or final salary pension schemes in the UK, which is when you kind of got a lifetime income promised. These kind of really gold plated pensions are really a thing of the past. I think only three of our FTSE 100, which is kind of our top 100 companies, still offer them to new members. So those are kind of three examples of where you might look across public policy, across labour market, across the housing market and see things looking to tip away from the young in favour of older generations.