Talkin’ ’bout my generation
Have the Baby Boomers really had such a sweet ride? Daniel Dunkley investigates following a week of angst prompted by a two-word comment.
Okay, Boomer. The dismissive meme went viral this month as millennials and younger people took out their frustrations on the generation that seems to have it all. Even Green MP Chloe Swarbrick got in on the act in Parliament, using the retort as a heckler interrupted her speech on climate change and the Zero Carbon Bill.
On social media at least, inter-generational warfare has begun. Baby Boomers (defined as people born between 1946 and 1964) have been blamed for ignoring the climate emergency, derailing the global economy, and squeezing tenants with increasingly high rent.
In response, Boomers often argue they work harder than millennials and deserve their economic prosperity. Some, like Australian demographer Bernard Salt, say young people should stop wasting their money at ‘‘hipster cafes’’. But did Boomers get an easier start in life than young people today?
They arrived into the world amid a massive postwar birth-rate increase. Unlike their parents, whose lives were ravaged by the horrors of World War II, Boomers enjoyed a relatively stable job market and political environment on leaving school. From 1946 until the mid-1970s, New Zealand experienced relatively full unemployment, according to Te Ara.
Dr Natalie Jackson, a demographics expert and former professor at the University of Waikato, said Boomers benefited from a post-war economic and political environment that allowed their parents to flourish. ‘‘When Boomers were born, over that 19-year period, it was one of full employment for their parents. That set them up very well.’’
It wasn’t until the late 1980s and early 1990s, when Boomers’ children first came into the job market, that unemployment began to rise materially. ‘‘Boomers lived in a world where there was protection, and jobs were kept in the country. But the current younger generation has had a very different environment. So it’s not the Boomers’ fault that happened, but the shift to globalisation,’’ Jackson said.
She said government policies designed to help families in the 1950s and 1960s, such as the universal family benefit, helped Boomers’ parents accumulate wealth, laying the foundation for their children.
‘‘The Universal Family Benefit was paid to families, and Boomers’ parents could capitalise, and cash that in to buy a section. With that, they had enough assets to borrow for a house. There was huge input into young families of the 50s and 60s by the government.’’
Boomers also had access to cheap tertiary education. While student numbers were significantly lower than they are today, students who reached the University Entrance standard were often eligible for bursaries. Tuition fees were not introduced until 1989, and student loans followed soon after in 1992.
While more people have access to a university education today, it comes at a price. According to the Student Loan Scheme’s 2018 report, the average outstanding student loan balance is more than $22,000. Students have borrowed $26.1 billion since 1992, and more than 100,000 are overdue on their repayments.
Today’s job market demands more tertiaryeducated workers, and New Zealand’s student debt pile is likely to increase. Students are concerned their generation will be burdened by debt forever.
Caitlin Barlow-Groome, acting president of the New Zealand Union of Students’ Associations, believes student loans have made it more difficult for young people considering university.
‘‘If you come out of university with a $30,000 loan and a BA or Bcom, you’re very unlikely to be able to pay that off any time soon,’’ Barlow-Groome said. ‘‘It’s especially hard for people who come from families where no one has ever studied. If you’re putting big loans on these guys, they have no one to fall back on. They’re constantly in debt.
‘‘There are two massive barriers to education. One is the cost, and the other is the cost of living while you study. You can get a loan for $220 a week, but where the universities are, it can be incredibly expensive.’’
Losing 10 per cent of your income in student loan repayments once you start working can be a significant hurdle and make it harder to qualify for things such as a first mortgage.
Housing is another major gripe for millennials (people born between 1981 and 1996) and Generation Z (those born after). Visit an open home, and for every young couple desperate for their first house, a Boomer is waiting to snap up another income stream.
Buying a first home is significantly more expensive for young people today. According to Shamubeel and Selena Eaqub’s book Generation Rent, the average New Zealand house price was between two to three times the average household income between 1957 and the late 1980s.
National house prices are now more than six times the average household income. Most Millennials will have to rely on Boomers – the bank of mum and dad – for help.
Many end up renting. According to the 2013 census, over half of New Zealanders aged 15 and
‘‘Boomers lived in a world where there was protection, and jobs were kept in the country. But the current younger generation has had a very different environment.’’ Dr Natalie Jackson
Demographics expert
over were renters. The number of rental households is growing at nearly twice the rate of owner-occupied dwellings, according to Statistics NZ.
Demand for rentals is growing, and landlords are hiking rates, according to Trade Me’s Rental Price Index. Much of the money is flowing to Boomers; 41.6 per cent of the nation’s landlords are aged between 41 and 60, while 29.8 per cent are over 60, according to the New Zealand Property Investors’ Federation.
Economist Shamubeel Eaqub said Boomers benefited from being the last generation to enjoy rising homeownership and financial security. ‘‘Home ownership rates in New Zealand rose until 1991 and have fallen since then. In 1991, Boomers were around 27 to in their 40s, and were the last generation to be part of that upward trend, to buy a home, and become financially secure.’’ Interest rates were significantly higher when Boomers bought their first homes in the 1960s, 1970s and 1980s. But Eaqub says high wage growth helped borrowers.
‘‘Boomers will tell you that when they bought, interest rates were high. That’s true, but inflation was high as well. While repayments were challenging at the beginning, incomes were rising with inflation. Their incomes grew really fast, but their debt didn’t.’’
Eaqub said it would now be difficult for young people to buy a house and pay off their mortgage before they retired.
‘‘If you’re a young couple without help, it might take you 20 years to save for a deposit,’’ he said. ‘‘You’re going to have to work for a very long time to pay that off, and many won’t have other savings. It’s not just Millennials and Generation X, but also late-stage Boomers.’’
Although today’s young people aren’t as assetrich as Boomers were, they have at least benefited from a broad improvement in New Zealand’s quality of life. Improved housing, healthcare, information-sharing, entertainment, technology, and transport have all made life more comfortable. Economist Tony Alexander said societal advances must also be taken into consideration.
‘‘It is hard to make a comparison, because if affordability of products is one’s measure of life ease, then that leaves no space for things like the absence of war and famine, a fair legal system, degrees of respect for individual rights, and recognition of the rights of others,’’ Alexander said. ‘‘Affordability of home ownership and consumer goods is only one aspect of human happiness.
‘‘Much as comparisons of affordability can make interesting headlines and reading, which will attract attention and perhaps emotive responses from different groups, they’re an incomplete measure of humanness.’’