The crisis generations

The crisis generations

From the WHO to Piers Morgan, Millennials are being blamed for not taking coronavirus seriously. This is not unusual for Millennials, who must have become used to being blamed for their generation being left behind. Can’t buy a house? Stop eating avocado toast. Can’t get a job? Stop being lazy and self-entitled. The failure to treat the structural bases of intergenerational inequality seriously has produced a Millennial vs. Boomer social conflict that has come to underpin electoral outcomes.

Generations emerge from crises. To understand how the present pandemic could influence intergenerational politics we need to go back to the 2007-08 financial crisis. The policy response to the crisis shaped Millennial generational formation. Moreover, the failure to take age-based inequalities seriously means that not only will Covid-19 form the basis of Generation Z’s development, it will reinforce the basis for Millennial development.

Millennials and the financial crisis
According to the German sociologist Karl Mannheim, generations are formed by young people as a result of their collective experience of key events. Essentially, the world view that is formed in response to ‘early impressions’ serve the basis for which ‘later experiences then tend to receive their meaning.’

In Generation Left, Keir Milburn combines Mannheim’s theory with class compositional analysis. Milburn argues that key events occurring at critical junctures in young people’s development can break down conventional wisdom. These events crystallise long-term trends to show that ‘the common sense of a society [has stopped] making sense.’ The way in which young people respond to these events forms the basis for a generational worldview. Milburn is not alone in identifying the 2007-08 financial crisis has critical to understanding Millennial development.

In the three decades proceeding the financial crisis, Britain’s economic growth was tied to its financialised economic model. Mortgages became the greatest source of debt in the UK. Rapidly increasing house prices provided individuals with the requisite credit to fuel Britain’s consumption-led growth. For individual households, home ownership effectively became the required asset to get ahead– individuals could simultaneously accumulate wealth and have a home to live in, whilst paying off their debt instead of rent.

As has become a well told story, the fragility of Britain’s financialised growth model was revealed by the 2007-08 financial crisis. But in lieu of an alternative idea as to how to organise the economy, access to credit has remained the core means of ensuring individual prosperity. Low interest rates and quantitative easing have enabled house prices to remain high. All well and good if you are a homeowner, but who is it that lack access?

Millennials were too young to buy a home when house prices were low. Since 2000, UK house prices have grown by 250%. According to the Resolution Foundation, thirty years ago a young family could save for a deposit in three years, today it would take the same family 19. As a result, only a third of Millennials own their own home compared to 60% of Boomers and 52% of Generation X. Dubbed “Generation Rent”, Millennials in their mid-30s are three times more likely to rent than their predecessors.

The problem is that there is a zero-sum trade-off between the interest of Boomer home-owners and Millennial renters. Policies like the Government’s Help-To-Buy-Scheme are limited as they do not target the real source of the problem – low housing stock. While an increase in housing stock may enable increased Millennial homeownership, it would do so by lowering house prices causing Boomer distress. In this way, Millennials have been stuck on the losing side of a zero-sum policy fight.

With no access to the wealth ladder, Millennials are dependent on the wages they earn on labour market. Unfortunately, post-crisis wage growth has been stagnant. Real-wages have fallen much further and for a lot longer for Millennials than other generations. Moreover, most Millennials have graduated from their expensive university degrees into a labour market with a scarcity of full-time roles. As such, Millennials have been much more likely than other generations to take on part-time and casualised roles. Millennial graduates are 12% more likely to be working in non-graduate roles than Boomers.

Millennials’ have graduated into pervasive and consistent insecurity and have received little support or acknowledgement of this reality. While generational inequality was embedded in Britain’s financialised growth model, the financial crisis served as the trigger to bring this divide into sharp relief. As Milburn puts it, ‘generational inequalities which were previously tolerable became intolerable.’

Covid-19: Another generational crisis
As a previous Discover Society post explored, we can already see the Boomer vs Millennial discursive frames being employed to understand Covid-19. But, in a structural sense, if the 2007-08 financial crisis served as the trigger for Millennials, it is worrying to think what Covid-19 will have in store for Generation Z.

We lack the data to say with any certainty what the full impact of the economic fallout from the pandemic will be. However, there are already indications of the inequalities that could emerge. According to the IFS, employees aged under 25 are two and a half times more likely to work in a sector that has been shutdown than other employees. Lower income earners, typically in the hospitality and retail sectors in which many under 25s work, are less likely to be able to work from home than higher income earners.

Of course, a significant number of these young workers should be covered by the government’s furlough schemes. However, young self-employed workers could be hit particularly hard. There is substantial debate as to how many young people are actually unemployed, with the RSA estimating that one in three of the UK economy’s gig economy workers are under 30 but might not identify as self-employed. It is these employers that could be particularly disadvantaged under the proposed government support. To qualify, a self-employed worker must have been self-employed for at least twelve months and have received more than 50% of their income from this source. Young gig-economy workers are less likely than older self-employed workers to meet this criteria.

It would seem that Generation Z are more likely to be impacted than Millennials. But this should not imply that Millennials have miraculously moved on from the last decade of insecurity. While we might lack the data at this stage to forecast, in the likely event that the recovery is not U-shaped, as they approach their forties Millennials have not accrued the requisite wealth they probably need to weather the impending storm.

Already we can glean some information about the government’s priorities in its policy response. On housing policy, a similar picture is emerging to the aftermath of the previous financial crisis. Banks have been instructed to grant payment-holidays to mortgage holders. While landlords have been encouraged to pass this on to renters, there is no guarantee that they will. Indeed, in a YouGov survey, a plurality of private renters expect their landlords to demand their full rental payments despite the effects of the lockdown, while 25% of these renters expressed doubt that they would be able to make their payments. It’s not looking good for “generation rent”.

Generation Covid?
The conventional way to define a generation is to look for fluctuations in birth rates. Differences between age cohorts thus produce Boomers, Generation X, Millennials and Generation Z. This approach allows us to consider Millennials to be the “unluckiest generation” as their formative years have been defined by first the 2007-08 financial crisis and now the Covid-19 pandemic.

But if, as Milburn argues, generations are instead approached as formations that emerge out of the breakdown of conventional wisdom then we can look beyond luck. Millennial development has been conditioned by young people’s inability to gain entry on the wealth ladder, which is the only way of gaining relative security let alone stability in the UK. If the 2007-08 brought this into stark reality then it appears that the distributional outcomes of the Covid-19 pandemic will be another trigger moment.

Moreover, Covid-19 could act as the trigger for Generation Z to join this fold. Too young to have directly experienced the financial crisis, Covid-19 will serve as the compositional crisis to bring into reality that, like Millennials, they face age-based structural inequalities. In this way the pandemic could be a catalyst for the post-financial crisis “Millennial” generation to grow in size. If the 2019 General Election saw age as a major cleavage, then this politics is likely to be conditioned further by the shift in bases of the generational conflict that emerges from lockdown.

 

Reference
Milburn, K. 2019. Generation Left. Cambridge: Polity Press.

 

Max Kiefel is a PhD candidate in the Government Department at the London School of Economics and Political Science. @maxkiefel

Image Credit: Leah Kelley from Pexels

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