New report calls for ‘justice for millennials’
The Millennial generation, or those aged between 16 and 35, are earning less than previous generations - the first time this have ever happened - and are less likely to own a home, according to a new report.
The report, "Stagnation Generation", calls for the social contract between young and old generations to be renewed, as millennials are at risk of becoming the first generation to earn less over their lifetime than earlier generations.
According to the report, in the U.K. today's 27 year olds are earning the same amount as a 27 year old would have 25 years ago.
"A typical millennial has actually earned £8,000 ($10,587) less during their twenties than those in the preceding generation – generation X," the report claims.
And while several generations were hit by the financial crisis of 2007-08, young people have experienced the biggest pay squeeze. For instance, while median hourly pay in the U.K. has shrunk 8.9 percent for all employees between 2009 and 2015, pay for those aged 22-29 has shrunk 12 percent, more than any other age group, according to figures from the U.K.'s office of National Statistics.
Other areas of concern related to pensions and home ownership.
For instance, younger generations are much less likely than those older than them to have access to generous defined benefit pension schemes; according to the report, these schemes received average employer contributions of 15.8 percent, compared to 2.9 percent for defined contribution schemes.
"The pay of today's workers has been suppressed by firms filling deficits in defined benefit pension schemes that provide for older or retired workers," the report said. "Some estimates suggest that as much as £35 billion is being diverted to this effort each year by businesses."
Meanwhile, young people are failing to get onto the property ladder. The report claims someone from the baby boomer generation at the age of 30 was 50 percent more likely to own their own home than a millennial of the same age.
"Millennials are spending an average of £44,000 more on rent in their 20s than baby boomers did," the report warns.
The report, published this week, was produced by the Intergenerational Commission, a group of business leaders, academics and policy experts which is tasked with examining the issue of intergenerational justice. The Commission is run by an independent think tank, the Resolution Foundation.