We often hear that there is a large and unfair gap between the life-chances of the baby boomers – those persons now in their mid-50s to early 60s – and their children, the echo-baby boomers now in their 20s.
In reality, class inequality within generations is far greater than differences between generations. There are extremes of rich and poor and a shrinking middle-class within all age groups.
For young people today, good jobs are hard to find, student debt is soaring, and the cost of breaking into the housing market has never been higher. The economic recovery from the Great Recession of 2008 has left far too many young adults sitting on the sidelines.
The employment rate of persons age 20-24 in 2011 (that is, the percentage of the age group with a job, any job) was 68.5 per cent, down significantly from 71.7 per cent four years ago. The unemployment rate for this age group averaged 10.9 per cent in 2011.
For teens, the employment rate has fallen dramatically, from 51.1 per cent to 42.9 per cent, and the unemployment rate in 2011 averaged 19.5 per cent.
And young people today are earning remarkably little more in real (inflation-adjusted) terms than their parents were when they were the same age. Over the entire thirty year period between 1981 and 2011, the average real hourly wage of men aged 25 to 34 rose by just 1 per cent, and that of women in the same age group rose by just 14 per cent.
But, have baby-boomers really enjoyed a cozy ride through life? The truly lucky were their parents, who worked in the post-Second World War “Golden Age” of low unemployment, rapidly rising real wages, rising house prices, and expanding public and private pension plans.
The postwar boom was petering out by the late 1970s and early 1980s, just as many baby boomers were entering the job market. The 1980s and 1990s were marked by two severe recessions, and by an increase in jobs which often did not provide steady wages or a decent pension.
The unemployment rate for the baby boomers, then mainly in their early thirties (age 30-34), was more than 10 per cent from 1983 to 1985, and over 8 per cent for the boomers in their late thirties during the recession years of 1992 to 1994.
Many baby boomers never managed to find the secure and well-paid jobs characteristic of the 1960s and 1970s that lay the basis for a decent retirement. A recent study by former Statscan assistant chief statistician Michael Wolfson found that one-in-four middle-income baby boomers face at least a 25 per cent fall in their standard of living in retirement. (He looked at persons born between 1945 and 1970, and earning between $35,000 and $80,000 per year.).
The proportion of all persons age 65 to 70 who are still working bottomed out at 11 per cent in 2000 and is now 24 per cent, and about one half of persons aged 60 to 65 are still working today.
To a significant degree, the baby boomers and their children are competing for jobs in a slack economy. But it is wrong to characterize this as a struggle between a “winning” and a “losing” generation.
In reality, the boomers and their children function as families who share in the good and the bad times.
The latest Census figures show that more than one in four (25.2 per cent) of young people age 25 to 29 are still living at home, up dramatically from just 11.3 per cent in 1981. And many baby boomers who can afford to do so are helping their children to avoid or minimize student debt.
We should focus more on issues like rising inequality, high unemployment and reduced income security which impact all Canadians, rather than think that one generation is winning at the expense of another.
Andrew Jackson is the Senior Policy Advisor at the Broadbent Institute. This article originally appeared on the Globe & Mail's Economy Lab.