Alf Young: Baby boom turning to bust for young

Even at 67, Neil Young still gave an impassioned performance in Glasgow this week. Picture: Robert Perry
Even at 67, Neil Young still gave an impassioned performance in Glasgow this week. Picture: Robert Perry
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Today’s pensioners are rocking on and having plenty of fun, but at what cost for future generations, asks Alf Young

There were plenty of sixty-somethings, even older, in the audience when Neil Young and Crazy Horse wowed Glasgow’s SECC on Thursday evening. Lots, too, when the Who had shaken that same venue just 48 hours earlier. And doubtless a similar demographic will be to the fore when Bruce Springsteen brings the latest leg of his marathon Wrecking Ball world tour from Wembley Stadium to Hampden Park this Tuesday evening.

The baby boomer generation is, in remarkably resilient numbers, simply sticking with the musical inspirations of its youth. Young is now 67. Roger Daltrey is 69 and Pete Townshend turned 68 last month. Springsteen is the stripling in this lot. Not 64 until September, by which time he and his E Street Band will have landed in Brazil, to rock Rio.

Perish the thought that these are sedate, tribute affairs. Young and Crazy Horse (that trio’s ages: 70, 70 in a few days’ time, and 64) put in a raucous, exhilarating two and a half hour shift on Thursday. On one number, Walk like a Giant, the instrumental pyrotechnics lasted more than 15 minutes. Springsteen concerts, at times on consecutive evenings in different cities, each routinely stretch well beyond the three-hour mark, with the man they call the Boss pacing the length and breadth of the stage displaying the stamina of someone less than half his age.

Throw in the Stones, headlining Glastonbury this year, and we have a modern phenomenon. The elders of popular music still hewing their nightly trade at the rock face. They are not alone. This week we learned that, for the first time across the UK, more than a million over-65s are still working. That’s one in ten of the retirement age cohort still gainfully employed. For some it’s a life-style choice, a reaction against the traditional cliff edge between all-consuming work and hitting balls on a golf course. For others, it’s a necessity. Unlike the rock idols of their youth, they need the money.

Poor annuity rates on personal pensions and rock-bottom interest rates on savings point to continuing some kind of paid work as a means of supplementing household incomes. However, as other research this week from the Institute for Fiscal Studies makes clear, current generations of pensioners in the UK are, as a whole, the one group that has been protected from real falls in their incomes in this recession. Biggest losers have been young working adults in their 20s.

The contrasting numbers are striking. Between 2007-8 and 2011-12, median household income for the over-60s has risen by around 2 to 3 per cent. Over the same period, equivalent income for adults in their 20s fell by about 12 per cent in real terms. Worse, in the years from 2001-2 up to the advent of the great crash, that same group had seen its median income stubbornly flatline.

Pensioner out-performance is part of an even longer-term trend, claims the IFS. Since the end of the 1970s, median income growth for pensioners has averaged around 2 per cent a year. For working-age adults, it’s been about half that. Over decades, that annual differential has had a dramatic cumulative impact. As the IFS puts it: “Since 1979, median income has almost doubled among pensioners, increased by around 50 per cent among individuals in families with children and grown by just a third (33 per cent) among working-age adults without children.”

IFS director Paul Johnston hails the treatment of UK pensioners over the past three decades and more as “a triumph of social policy”. Back in the Sixties and Seventies, pensioners were seven or eight times more likely to live in poverty than other groups in the population. Now, says Johnston, “while pensioner poverty has certainly not been abolished, pensioners are now less likely to be poor than people of working age”.

And, among the new working poor, the group that has replaced pensioners as the hardest hit are those in their 20s struggling to find first jobs and establish careers. As internships and zero-hours contracts proliferate and the university milk round of old is a dim and distant memory, more young people not only struggle to get a permanent job, they also struggle to get one to match their qualifications or with any guarantee of income progression.

The old assumption that each generation can expect to be better off than the one that preceded is in danger of unravelling. As Paul Johnston points out, “people in their 20s now have significantly lower incomes than those in their 20s at the turn of the century”.

Another new piece of analysis published this week by IFS shows the extent to which, in this recession, sustained restraint on real wages across much of UK business has replaced a big squeeze on job numbers, as the main way companies are responding to flagging demand. By April 2011, three years into this recession, average real hourly wages were still 4 per cent below where they were at the start of the slump in April 2008. A the same point in the early 1980s recession, hourly wages were already 5 per cent higher. And in the early 1990s recession, they were 10 per cent higher.

Current labour market numbers may give politicians of all stripes more encouragement than at the same stage in previous recessions, even if the improvements include more people of pensionable age choosing to work on and still too many young people struggling to find that elusive first job.

But the flip side of the story, which ought to cause these same politicians acute concern, is falling incomes, especially among the working young of these islands and what that must inevitably mean for aggregate demand in the economy as a whole.

Who would want to stop the Neil Youngs of post-war popular music from rocking till they drop? Who would deny their thousands of loyal fans the opportunity or the wherewithal to hear them in action one more time? But the triumph of social policy that has enabled that now pension-age generation of baby boomers to continue to have their fun is coming at a heavy price. A price already being paid or about to be paid by succeeding generations that include some of their own children and grandchildren.

Some of us baby boomers have been banging on about this issue of inter-generational equity for quite some time. This week the Bishop of London, the Rt Reverend Richard Chartres, dubbed us the “fortunate generation”, one that had enjoyed dramatic improvements in living standards and ought to be thinking about whether it is now absorbing more than its fair share of taxpayers’ money.

Poor old Chartres, he’s 65 by the way, took a right bashing from papers such as the Daily Mail for being beastly to the elderly. In it Stephen Glover told the bishop he was “plain wrong”. Pensioners have worked and saved and built up what little they have. The ultimate test of any society’s humanity, Glover opined, is the way it treats its elderly.

Well this oldie thinks society has risen to that challenge over the past three decades, as the IFS has demonstrated. Surely the bigger test of our humanity now is what future we are leaving to our young.