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In Defence of Baby Boomers

Born in 1946, I'm one of the first baby boomers. For years, nobody has made anything much of our existence, but now we're about to reach retirement, suddenly we're under attack. Many of the attacks are couched in intemperate, vitriolic language. Yet many of the arguments are patently weak or quote distorted figures.

The odd thing about it all is that we have never attempted to keep our existence a secret. The way we're being described now makes it sound as if some dreadful plot has only recently been uncovered. Yet when I went to a secondary school in 1957 we knew that the number of classes was being increased by 50% to accommodate our greater numbers. So the demographics have been known for at least half a century. If society has failed to come to terms with the obvious implications, it is not clear why it is the fault of the baby boomers.

Complaints seem to focus on home ownership, pensions and university tuition. And government debt and carbon emissions are sometimes thrown in for good measure. Well, let's look at those.

Inflation in house prices certainly transfers wealth to young home owners. However, this needs careful analysis, and it is worth looking at the real figures, instead of the speculation spread by such as David Willetts. During the 70s and 80s inflation was high. This meant that mortgage debts were reduced, relative to income. While one was young enough to still be able to take out a 20 or 25 year mortgage, this effect was a benefit.

But where did the money come from that was presented to home owners during that period? Most mortgages at that time were provided by building societies, and their biggest investors were our elderly relatives. Their savings were reduced in value by inflation. This is clearly in some ways unfair, but at the same time it is only fair to point out that a lot of the elderly savers were also receiving pensions that were regularly uprated. It is not clear that a major injustice was perpetrated by these circumstances, taken as a whole.

Recent rapid rises in house prices that take them far beyond traditional income multiples do not benefit baby boomers, because they are too old. Increases in the value of the home in which you live are academic, they cannot be spent until you are dead. Trading down is often not a feasible or effective option. It is the children of the baby boomers who will benefit eventually, if house prices remain at elevated levels.

Some wild estimations have been given purporting to show that baby boomers own a disproportionate value of property. Yet official HMRC statistics are available, which show that in 2005 identifiable national wealth was almost £1,880 billion, of which just over £830 billion belonged to the forty-five to sixty-four age group (44 per cent of the total), whereas £533 billion (28 per cent) was in the hands of those between eighteen and forty-four. Obviously, it is reasonable and natural that wealth increases over a working life, so the true figures hardly suggest an injustice.

Of course it is true that life is now very difficult for young people wanting to buy a house for the first time. But there is no reason to lay this problem at the door of baby boomers, many of whom deplore excessively high house prices. Moreover, many baby boomers are actively assisting their younger relatives with house purchase, to the extent that they can afford to do so.

Turning to pensions, reality is not nearly as black and white as the critics complain. One factor they grumble about is that past pensioners enjoyed retirement for only a few years. While some sadly did, others lived in retirement for many years. My grandfather was already retired when I was born, and then received a regularly adjusted pension from his lifetime's work as well as a state pension. Likewise, many people of my parents' generation retired with a final salary pension scheme on which they were able to draw for many years. My father is still drawing his teacher's pension after 30 years of retirement, and long may he do so.

This is not to say that there is no demographic problem, but it does show that the idea of retirement at 65 followed by a period in receipt of a steadily adjusted pension has been a long established feature of British life and one that some pensioners have enjoyed over very long periods. Many baby boomers may be perfectly willing to work until later in life, but there are huge obstacles in workplace attitudes that need to be overcome before that could become a reality. Talk of baby boomers taking low paid jobs is both unfair on them and liable to push some younger people out of employment, to nobody's benefit.

Critics frequently claim that baby boomers are entering retirement with inflation proofed pensions, to the detriment of everyone else. The reality is much messier. Even those lucky enough to have an index linked pension face problems. Index linking refers to a somewhat arbitrary basket of goods that is not remotely typical of pensioner outgoings. In particular, council tax has now been rising for many years at rates far in excess of any pension. Quite apart from that, many baby boomers have already been pushed out of final salary schemes and into money purchase schemes. The latter yield highly uncertain returns and leave pensioners vulnerable to financial upheavals and the rapacious financial services industry.

Another claim is that boomers are about to claim far more than they have paid in. There are at least two obvious loopholes here. One is that with no male baby boomer yet drawing a penny of state pension, it is far too soon to be making lifetime calculations. Another is that economic growth means that society is richer over the years, and by and large each generation lives better than the preceding one.

Attending university has become a costly business. I, and many other baby boomers, have consistently opposed the imposition of large fees on students. We deplore the idea of young people having large debts before they even have an income. To us it makes no more sense than saddling everyone with a bill for their schooling.

There may well be a problem that thinking about the role of universities has become muddled. The idea that everything has to be a business of some kind does not help. There are benefits to society that come from having high quality universities. Not all of them can or should be financially quantified. Over time, economic growth is affected by the existence of people who have experienced various kinds of higher education. It may be that graduates earn more, although it is unclear what causal relationships are involved here. It is also true that if they do earn more, then they also automatically pay more tax.

In any case, I have never had any objection to paying taxes to finance universities to the extent that they provide benefits, in the broadest possible sense, to our society. And I think that baby boomers as a group are almost certainly more sympathetic to supporting students than is society as a whole. As individuals, those that have been able to do so have attempted to shelter their children from the worst effects of the present system.

Let's briefly review the subsidiary accusations. It's odd to complain that baby boomers are responsible for a big increase in national debt. It was huge when I was born, and you could say that I've spent my working life paying it off. Recently it has ballooned again, but the people who have the money now are bankers, most of whom are not baby boomers. Environmental factors are a serious concern, but plenty of baby boomers have been actively concerned about them for many years. It is hard to make a case for them having been a hedonistic bunch. Certainly the earliest boomers, like myself, were brought up in austerity and are imbued with caution when it comes to extravagant use of resources.

Finally, a bizarre complaint is that the boomers have political power because of their numbers. It's hard to see why we should be apologetic about having been born! Nor is there any grounds for claiming that such power as we have is being used in an unusually selfish fashion. Many of the changes that have affected contemporary life were already under way as the boomers reached adulthood. Many others were introduced by people, such as Margaret Thatcher, who were well outside the group.

There is no reason to suppose that baby boomers are a better bunch of people than any other age group. But neither does it make sense to accuse them of being unusually selfish or unreasonably grasping. Blaming one age group for the ills of society cannot be a constructive response to the problems we face.

#128005 • 13 October 2012 12:28pm by Martin Brampton • Vote: Agree (201) Disagree (209)

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