Simon Arcus: Gen Y help?

The spectre of our ageing population has led some to suggest there´s inevitable intergenerational conflict ahead. Tension will grow between the demands of our `Gen Y´ (the `millenials´ aged 17 to 30 years old) and the `Baby Boomers´ (those born during the period immediately post-World War II). It´s being labelled by the Americans as the `geriatric gap´. As the population ages and health care and retirement costs rise rapidly in the USA, politics is becoming increasingly divided along generational lines.

In his article `We´re talking about my generation´ (16 September 2009), Andrew West suggested that a tranche of New Zealanders have presided over the `gradual, interminable decline in relative prosperity´ in the country. While it´s hard to meaningfully pin responsibility on one generation because of innumerable domestic and external factors, Andrew´s engaging theme touched on the perception one generation has shortchanged another. As the population ages, the interaction between Gen Y (and X) and the retiring Baby Boomers will be a major feature of our future socio-political landscape.

Generation Y gets a bad name. They´re often characterised as selfish, materialistic and spendthrift. But a recent Otago University study by Dr Lisa McNeil entitled `Y Worry? - Generation Y´s attitude towards money and debt´ suggests that while Gen Y attitudes differ from previous

generations, this reflects factors in their environment such as easy credit, material plenty and consumerism. McNeil´s findings suggest that we ought to understand Gen Y better before labelling them. Holding a `cynic´s mirror´ up to the Boomers, are they in any position to call Gen Y selfish?

Born after the depression and World War II, they never knew the deprivations of their parents and grandparents but benefited from the economic prosperity that followed. That included free healthcare and the likelihood of inheriting their parent´s primary asset - a mortgage free home.

The Boomers spent the 1960´s and much of the 70´s enjoying all the benefits of the welfare state including free tertiary education. Taking with one hand, they rejected their parents´ more conservative values with the other and asserted their right to self determination.

Jobs were plentiful. In the 1980´s they took the helm of the economy, crashing it seriously several times, particularly 1987 and the 2008 GFC. In the 1990´s they made the `tough´ decisions to extend the reforms of the 1980´s by introducing further user pays initiatives, welfare cuts, means testing and student loans. This was done while increasingly scaling back taxation on the better paid - and you can guess who was in that group by then.

To be fair, the Boomers took difficult decisions when New Zealand´s highly regulated economy was in serious trouble in the early 1980´s. People tend to forget that by 1984 Kiwis were living with perilous national credit and debt, state ordered wage freezes, regulation of mortgages and a top tax rate of 67c in the dollar.

But some questions linger about the reforms of the 1980´s. Why do countries like the Netherlands, Denmark and Sweden manage smaller economies in a way the public receive high quality social services without the need to resort to harsh free market measures? Did the first Labour government of 1984 too slavishly mirror reforms better adapted to larger, much more industrialised economies such as the USA and Britain? What sufficient thought was given to New Zealand´s size and unique differentiators?

The baby-boom generation began reaching retirement age last year and because they are living longer and are generally more healthy they are also more politically active and vocal.

The Boomers `free market´ideals - so powerful in the 1980´s - are truly tested when their health care and retirements benefits are threatened in old age.

To Gen Y the Boomers look like beneficiaries of much they will never receive themselves. Will attitudes toward the elderly change as their voting clout is balanced against their unsustainable demand on social services structures?

As the first of the Boomers reach retirement supported by Government superannuation they are becoming advocates for their continuing access to health care and retirement entitlements. The Boomers are also becoming known as the Selfish Generation in the USA.

In Anya Kamenetz´s book "Generation Debt" she reports that when Boomers were asked if they would sacrifice their own economic well-being to help their children, a majority said `no.´

The pressure on the economy will grow as Boomers retire in larger and larger numbers but continue using services that are increasingly difficult to fund through taxation. As they squeeze healthcare and other benefits to unsustainable, will there be a paradigm shift in the relationship between the Boomers and successor generations? How do we perceive `the elderly´ - who are now increasingly fit and active until late in life?

Generational conflict isn´t desirable for society, but if the the Boomers and Gens X and Y regard each other as selfish the stage is set for conflict. Gen Y may treat senior to the same `tough decisions´ they made in decades past. We will have to wait to see if the Boomers reap as they sowed.

ENDS

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