In 2011, the Labour leader Ed Miliband drew headlines when he warned that his generation was in danger of failing to fulfil the “British promise” that each new generation should be able to enjoy a better quality of life than the previous one had. This comment seemed to tap into a widespread sense of anxiety about today’s young people having things weighted against them, whether that’s because they will have to deal with the after-effects of the worst financial crisis in decades, or because of long-term problems such as Britain’s ageing population and our sclerotic housing market. It is no wonder that some have labelled Generation Y the “jilted generation” because of the poor hand the older generation has dealt them.
How accurate is this impression of a generation which seems destined to be poorer than their parents? To investigate, IF asked a group of 50 of Britain’s leading thinkers in economics what they think the prospects are for Generation Y compared to their parents’ generation. Specifically, they were asked to give their views in response to the following questions:
- Do you think people who are currently in their 20s are likely on average to be financially worse-off than their parents over the course of their lives?
- According to the International Monetary Fund, Britain is currently the 6th largest economy in the world (using nominal GDP) out of 182 countries. What position would you guess Britain will be in by 2040?
- What do you think the average annual rate of GDP growth will be for the UK between now and 2040 (in real terms)?
The striking range of responses that these questions managed to stimulate – including the fact that two-thirds of the economists agreed that today’s 20-somethings are likely to be poorer than their parents – argues strongly that we need to take urgent actions if we don’t want Ed Miliband’s warning to come true.