WEBVTT - The Millennial Generation Is Stagnant And Older People Are Part 0:00:07.280 --> 0:00:10.000 Hello, and welcome to another episode of All Lots. I'm 0:00:10.039 --> 0:00:13.840 Tracy Alloway, Executive editor of Bloomberg Markets, and I'm Joe 0:00:13.880 --> 0:00:18.360 wisn't Thal, Managing editor of Bloomberg Markets. So, Joe, we 0:00:18.480 --> 0:00:22.599 talk about millennials quite a bit, what they like, what 0:00:22.720 --> 0:00:26.319 impact they're having on the economy, and you actually have 0:00:26.680 --> 0:00:30.120 a pretty good definition of millennials from what I remember. 0:00:30.320 --> 0:00:33.040 Share it with us. That's right, I do, because there's 0:00:33.080 --> 0:00:35.600 always these debates that go on. They're like, oh, if 0:00:35.640 --> 0:00:38.519 you're born in one or nine, eight, whatever it is, 0:00:38.600 --> 0:00:40.800 and I always kind of find that to be a 0:00:40.800 --> 0:00:45.280 little um meaningless. The definition of millennial in my view 0:00:45.440 --> 0:00:49.600 is did you have Facebook when you were in college? Um? 0:00:49.640 --> 0:00:52.800 I didn't. But it feels to me that that's important, 0:00:52.800 --> 0:00:55.680 not just from a time perspective, but because that's really 0:00:55.720 --> 0:00:59.360 sort of defining different in how people live and how 0:00:59.360 --> 0:01:02.040 people inter act, and how people find partners and how 0:01:02.200 --> 0:01:05.880 people find friends, and that's such a crucial distinction, the 0:01:05.920 --> 0:01:09.280 sort of pre Facebook crowd and afterwards that I think 0:01:09.319 --> 0:01:12.560 it's the perfect definition. Okay, So I actually did have 0:01:12.640 --> 0:01:15.640 Facebook in college, more because we were one of the 0:01:15.680 --> 0:01:20.560 first colleges to get it than being particularly younger than you. 0:01:20.959 --> 0:01:24.319 But I guess that makes me a millennial in some senses, 0:01:24.760 --> 0:01:28.679 so you know, as a card carrying millennial. One of 0:01:28.680 --> 0:01:32.120 the things I followed very closely is the idea of 0:01:32.480 --> 0:01:38.240 intergenerational conflict, so the idea that young people are angry 0:01:38.280 --> 0:01:42.120 with old people over certain trends happening in the economy. 0:01:42.160 --> 0:01:45.080 And you've been following this closely as well. Yeah, it's 0:01:45.120 --> 0:01:48.760 a huge topic, and you really love this topic though 0:01:48.840 --> 0:01:53.840 you love anything relating to intergenerational warfare, or maybe warfare 0:01:53.920 --> 0:01:57.560 is too strong, but at least conflict. You get very 0:01:57.560 --> 0:02:01.120 excited about it. I do, so. I guess the thing 0:02:01.200 --> 0:02:04.320 that um got me most excited about it was when 0:02:04.360 --> 0:02:06.680 I first wrote about it. Gosh, I think it was 0:02:06.720 --> 0:02:09.200 back in two thousand nine. I actually did a post 0:02:09.280 --> 0:02:15.040 under the headline kill the Old, and it was kind of, well, 0:02:15.040 --> 0:02:17.079 it was kind of tongue in cheek, but it made 0:02:17.080 --> 0:02:19.600 a serious point, which was that in the aftermath of 0:02:19.600 --> 0:02:23.959 the financial crisis, the younger generation had really been given 0:02:24.120 --> 0:02:27.359 a raw deal by the older generations, so we were 0:02:27.480 --> 0:02:30.520 kind of paying for a lot of their excesses. We 0:02:30.639 --> 0:02:34.119 had the housing boom, which made getting a mortgage much 0:02:34.200 --> 0:02:37.799 tougher for younger people. We had pension schemes that were 0:02:37.840 --> 0:02:40.720 now underfunded, which young people have to pay for and 0:02:40.720 --> 0:02:43.520 they don't get to enjoy the benefits. I could go 0:02:43.600 --> 0:02:45.480 on and on and on, but instead of doing that, 0:02:45.600 --> 0:02:48.880 let's bring in our guest for today. She is Laura Gardner. 0:02:49.080 --> 0:02:53.720 She's a senior research and policy analyst over at the 0:02:53.760 --> 0:02:57.680 Resolution Foundation, which is a think tank that looks into 0:02:57.800 --> 0:03:02.680 a living standards, especially for poorer earners, and she actually 0:03:02.680 --> 0:03:05.480 wrote a really, really good report on this topic. It's 0:03:05.480 --> 0:03:10.760 called The Stagnation Generation The Case for Renewing the Intergenerational Contract. 0:03:11.040 --> 0:03:14.600 So it's slightly more sedate title than Kill the Old, 0:03:14.760 --> 0:03:24.800 but maybe there's some of that in there. Hiler, thanks 0:03:24.840 --> 0:03:29.440 for joining us. So maybe to begin, you could walk 0:03:29.520 --> 0:03:33.919 us through why you decided to focus on intergenerational conflict 0:03:34.000 --> 0:03:38.440 or tension specifically, because the think tank doesn't necessarily always 0:03:38.480 --> 0:03:42.000 look at this, right, you're looking usually at improving living 0:03:42.040 --> 0:03:45.760 standards for the lowest earners in the UK. That's absolutely right. 0:03:45.800 --> 0:03:48.880 And the reason why we've we've taken this new focus 0:03:48.960 --> 0:03:51.960 on inter generational issues is because in the COT is 0:03:52.000 --> 0:03:54.240 because in the course of a lot of our analysis 0:03:54.280 --> 0:03:58.360 of different living standards outcomes in the UK, these kind 0:03:58.360 --> 0:04:02.560 of intergenerational concerns really started coming through. So, for example, 0:04:02.640 --> 0:04:04.680 we spend an awful lot of time looking at what's 0:04:04.720 --> 0:04:07.560 going on in the labor market in the UK, as 0:04:07.680 --> 0:04:11.160 as that's such a big determinant of household living standards. 0:04:11.560 --> 0:04:14.160 And if you look at the pay squeeze, really long 0:04:14.200 --> 0:04:16.880 and deep pay squeeze we've had since two thousand and 0:04:16.960 --> 0:04:20.000 nine in the UK, you immediately find that young people, 0:04:20.080 --> 0:04:23.520 those in their twenties had a much deeper pay squeeze 0:04:23.880 --> 0:04:26.479 than than older workers, so they seem to bear the 0:04:26.520 --> 0:04:29.520 brunt of the paypals in the downturn. And then if 0:04:29.520 --> 0:04:32.160 you look, say at the housing market, and you look 0:04:32.200 --> 0:04:35.400 at how much people are spending on private rent and 0:04:35.560 --> 0:04:39.280 falling rates of homeownership, you see that very much hitting 0:04:39.320 --> 0:04:41.920 young people who are spending the highest proportions of their 0:04:41.920 --> 0:04:44.640 incomes on their housing costs. And then you'd say you 0:04:44.720 --> 0:04:48.400 might look at pensions in the workplace, and and and 0:04:48.520 --> 0:04:51.479 who's in receipt of or who's set to get what 0:04:51.520 --> 0:04:54.360 we call kind of define benefit or final salary pension 0:04:54.400 --> 0:04:55.960 schemes in the UK, which is when you kind of 0:04:56.000 --> 0:04:59.200 got a lifetime income promised. These these kind of really 0:04:59.240 --> 0:05:02.520 gold plated mentions really a thing in the past. I 0:05:02.520 --> 0:05:05.240 think only three of our fit See one hundreds, which 0:05:05.240 --> 0:05:08.560 is kind of our top one hundred companies still offer 0:05:08.600 --> 0:05:10.800 them to new members. So so those are kind of 0:05:10.800 --> 0:05:14.280 three examples of where you might look across across public policy, 0:05:14.360 --> 0:05:17.360 across labor market, across the housing market and see things 0:05:17.880 --> 0:05:20.960 looking to tip away from the young in favor of 0:05:20.960 --> 0:05:24.520 older generations. But those are very snapshot pictures. We're not 0:05:24.560 --> 0:05:28.200 comparing like with like. We're not comparing young people today 0:05:28.320 --> 0:05:30.919 with those with young people in the same age thirty 0:05:31.040 --> 0:05:33.720 years ago. So we wanted to get underneath these apparent 0:05:33.760 --> 0:05:37.800 concerns and do a really rigorous assessment of intergenerational furnace 0:05:37.920 --> 0:05:41.760 over the life cause, which led to this this Stagnation 0:05:41.800 --> 0:05:44.920 Generation Report and the long eighteen month project we are 0:05:44.960 --> 0:05:47.200 doing off the back of it. So what did you 0:05:47.279 --> 0:05:51.039 learn when you took this deeper look as opposed to 0:05:51.120 --> 0:05:55.120 just comparing young people today verse the older generation today? 0:05:55.440 --> 0:05:58.640 What did you learn are some key differences in how 0:05:58.680 --> 0:06:03.240 the economy was structure today versus when the order generation 0:06:03.520 --> 0:06:06.120 were themselves young. If we if we go back to 0:06:06.320 --> 0:06:08.680 the labor market for example, and what's what's going on 0:06:08.720 --> 0:06:13.040 with pay. So we normally expect, in the long march 0:06:13.080 --> 0:06:16.080 of history, each generation to earn more than the one 0:06:16.120 --> 0:06:20.320 before it, because usually earnings growth is faster than growth 0:06:20.320 --> 0:06:24.200 in prices is fast than inflation. You'd expect each generation 0:06:24.640 --> 0:06:26.960 in a growing economy to do better than the one before. 0:06:27.240 --> 0:06:30.600 And that's what happened from the from the silent generation 0:06:30.600 --> 0:06:34.880 to the Baby Beamers and the baby Beamers to Generation X. 0:06:34.960 --> 0:06:37.480 Each generation earns more than the last as a big 0:06:37.520 --> 0:06:40.720 step up. And we're a bit different to you, Joe, 0:06:40.760 --> 0:06:42.960 because we we we do decide to stick a year 0:06:43.040 --> 0:06:45.720 definition on the millennials. We look at the we look 0:06:45.760 --> 0:06:49.080 at those born between one and two thousand in the 0:06:49.160 --> 0:06:52.040 UK as a millennials, and I still I still don't 0:06:52.120 --> 0:06:56.800 qualify as a millennial. I think I think it fits 0:06:56.880 --> 0:07:01.320 quite well with the Facebook deaf and iss and you suggested, actually, 0:07:01.400 --> 0:07:04.400 when when I think about Facebook, hit hit universities in 0:07:04.400 --> 0:07:07.440 the UK slightly later, but I remember having it myself, 0:07:07.480 --> 0:07:10.760 so I think it's just about works. Um. So if 0:07:10.800 --> 0:07:12.560 you look at the millennials and you compare them to 0:07:12.720 --> 0:07:16.880 Generation X, that those born in the fifteen years before them. 0:07:16.920 --> 0:07:19.239 In their sort of their first ten years of their career, 0:07:19.360 --> 0:07:22.560 so far, they've failed to earn more than Generation X. 0:07:22.560 --> 0:07:25.840 They've actually earned a bit less. We estimate about eight 0:07:25.880 --> 0:07:29.080 thousand pounds less over the course of their twenties. So 0:07:29.480 --> 0:07:32.880 so on this like for like comparison, we do indeed 0:07:33.000 --> 0:07:35.960 have suggestions that the millennials could be the first generation 0:07:36.240 --> 0:07:40.280 to not significantly exceed their predecessors in terms of earnings. 0:07:40.760 --> 0:07:42.760 So that's one example, and then I just mentioned one 0:07:42.840 --> 0:07:46.120 more from the housing market, which is even starker. So 0:07:46.120 --> 0:07:49.680 we've looked at declining rates of home ownership across the generations, 0:07:50.160 --> 0:07:53.880 and the peak generation for homeownership in the UK was 0:07:54.240 --> 0:07:59.440 the Baby Beamers, those born between By the age of thirty, 0:07:59.640 --> 0:08:02.880 about two thirds of Baby Boomers own their own home. 0:08:03.640 --> 0:08:06.080 Now that fell a bit for generation next after them, 0:08:06.440 --> 0:08:08.720 but for the Millennials it's kind of fallen off a cliff. 0:08:08.760 --> 0:08:14.000 So by the age of thirty, only about thirty millennials 0:08:14.080 --> 0:08:15.840 own their own home in the UK. So we've had 0:08:15.840 --> 0:08:18.760 this massive decline in home ownership, which is on a 0:08:18.880 --> 0:08:21.760 like for like basis, means millennials are much more likely 0:08:22.120 --> 0:08:24.800 to be stuck in the private rented sector, unable to 0:08:24.800 --> 0:08:27.520 save up for those house deposits and paying far more 0:08:27.600 --> 0:08:29.680 in private rent as a result, which has shot up 0:08:29.720 --> 0:08:32.920 in recent years. So those are kind of two examples 0:08:32.960 --> 0:08:35.760 of of of where this kind of generational conflict really 0:08:35.800 --> 0:08:37.880 comes through when you go into the kind of deep 0:08:37.920 --> 0:08:40.800 dive into the data and look at stuff like for like. So, 0:08:40.840 --> 0:08:43.800 how much of those sorts of trends have to do 0:08:44.000 --> 0:08:47.320 with the financial crisis and to what degree do we 0:08:47.360 --> 0:08:50.839 expect that they might get better as we get further 0:08:50.920 --> 0:08:54.720 and further away from two thousand eight. The financial crisis 0:08:54.760 --> 0:08:57.120 is definitely a big factor in this, particularly on the 0:08:57.120 --> 0:08:59.640 pace side. The reason why millennials have had or a 0:08:59.679 --> 0:09:01.520 large part of the reason why millennials have had such 0:09:01.520 --> 0:09:03.880 a bad time in their twenties is because they had 0:09:03.920 --> 0:09:08.199 the unfortunate experience of graduating into an enormous pay squeeds 0:09:08.240 --> 0:09:11.600 into an enormous recession. But actually, we think there are 0:09:11.600 --> 0:09:14.560 signs that this isn't all about the financial crisis. So 0:09:14.640 --> 0:09:17.000 even if we look at those early millennials that were 0:09:17.120 --> 0:09:19.600 entering the labor market in the mid two thousand's, so 0:09:19.720 --> 0:09:22.880 before the crisis, when things are actually looking pretty good, 0:09:22.920 --> 0:09:25.520 they were still failing to make earnings gains on the 0:09:25.559 --> 0:09:29.840 sort of cohorts fifteen years before them. So some of 0:09:29.880 --> 0:09:33.480 this kind of stagnation picture it seems to predate the 0:09:33.480 --> 0:09:36.720 financial crisis, and so when we think about the future, 0:09:36.760 --> 0:09:38.840 obviously we'd expect a lot of the effects of the 0:09:38.840 --> 0:09:43.240 financial crisis to unwind incoming years, although the UK economy 0:09:43.720 --> 0:09:45.880 looks like it might be about to experience a new 0:09:45.920 --> 0:09:49.040 wave of uncertainty in relation to the decision to leave 0:09:49.040 --> 0:09:51.400 the EU, so some of those effects might be prolonged. 0:09:51.440 --> 0:09:56.480 But because some of the stagnation appears to have predated 0:09:56.480 --> 0:10:00.559 the crisis, we're concerned that without kind of detailed policy attention, 0:10:00.960 --> 0:10:03.679 this isn't just going to be an early career blip. 0:10:03.720 --> 0:10:06.199 It could be something that blights the millennials throughout their 0:10:06.240 --> 0:10:08.360 working lives. And that's one of the reasons for kind 0:10:08.400 --> 0:10:11.240 of our elevation of this issue and our big project 0:10:11.280 --> 0:10:14.000 on it. So let's get to the policy question. You 0:10:14.120 --> 0:10:18.960 mentioned that we the economy may need detailed policy attention 0:10:18.960 --> 0:10:23.520 on these issues. What policies were put in place or 0:10:23.559 --> 0:10:27.560 what decisions were made that, in your view, contributed to 0:10:27.679 --> 0:10:33.560 this um downturn in various financial and economic measures. There's 0:10:33.559 --> 0:10:36.080 definitely no one thing, and and it should be said 0:10:36.120 --> 0:10:40.640 that some of the challenges around intergenerational furnace aren't We 0:10:40.679 --> 0:10:43.320 don't necessarily point the finger at policy. We might point 0:10:43.320 --> 0:10:46.880 to a demographics. So a lot of the challenges in 0:10:47.400 --> 0:10:50.360 our welfare states, our economies are labor markets, comes from 0:10:50.360 --> 0:10:52.600 the fact that some birth cohorts are just much bigger 0:10:52.600 --> 0:10:54.480 than others. And the reason why the baby beamers are 0:10:54.480 --> 0:10:56.199 called the baby beam is this because there's a lot 0:10:56.240 --> 0:10:59.880 of them. There's this massive birth spike in the post 0:11:00.040 --> 0:11:02.600 war years um and and that drives a lot of 0:11:02.600 --> 0:11:05.480 the challenge. So it's very difficult for policy to deal 0:11:05.559 --> 0:11:09.000 with those uneven cohort sizes. So we do need to 0:11:09.040 --> 0:11:10.839 look at the role of demographics and how we can 0:11:10.880 --> 0:11:14.680 better kind of plan and plan for future welfare spending 0:11:14.720 --> 0:11:17.319 in light of that. But there are also other policy 0:11:17.400 --> 0:11:20.000 choices in the UK that have contributed to this picture. 0:11:20.080 --> 0:11:22.760 So in the labor market, we might point to our 0:11:23.840 --> 0:11:27.120 consistent failure in the UK, not just pointing the finger 0:11:27.160 --> 0:11:29.480 at one specific government this is a decades long thing, 0:11:29.559 --> 0:11:33.840 but our consistent failure to offer a solid, dependable career 0:11:33.920 --> 0:11:36.640 route for the fifty of young people who don't who 0:11:36.679 --> 0:11:39.560 decided not to go to university. I think I've heard 0:11:39.600 --> 0:11:43.120 similar messages from the u S as well. So skills 0:11:43.120 --> 0:11:47.520 for non graduates is a huge failing house building. For 0:11:47.600 --> 0:11:50.800 years and years and decades we've failed to build enough houses, 0:11:50.840 --> 0:11:53.479 and which is one of the reasons why the generational 0:11:53.480 --> 0:11:57.400 housing crisis I've described exists on pensions. Decisions made to 0:11:58.240 --> 0:12:02.600 UM insufficiently fund these final salary pension schemes in the 0:12:02.640 --> 0:12:05.479 nine eighties and nine nineties have led to huge deficits 0:12:05.520 --> 0:12:08.480 now which kind of current generations are working to pay off, 0:12:08.880 --> 0:12:12.040 and on the welfare state. In the austerity we've had 0:12:12.080 --> 0:12:14.800 in the UK in recent years, UM there's been a 0:12:14.920 --> 0:12:19.040 very clear decision to protect pension of benefits and bring 0:12:19.040 --> 0:12:21.280 in quite big cuts to working age benefits. So there's 0:12:21.320 --> 0:12:23.600 all sorts of areas where public policy does seem to 0:12:23.600 --> 0:12:28.400 have exacerbated rather than ameliorated, the hand dealt by demographics, 0:12:28.400 --> 0:12:31.920 if you like, Well, what's the appetite to introduce new 0:12:31.960 --> 0:12:35.200 policies that might tip the balance back in favor of 0:12:35.200 --> 0:12:39.200 a younger generation, and particularly given that baby boomers in 0:12:39.240 --> 0:12:43.480 particular still forms such a huge, huge part of the population, 0:12:43.559 --> 0:12:46.199 and it seems if we're talking about democracies and they 0:12:46.240 --> 0:12:50.640 have the upper hand in terms of introducing new rules 0:12:50.679 --> 0:12:53.880 and policies that could change things. Well, I mean, that's 0:12:53.880 --> 0:12:56.720 a that's a really important question to ask. And the 0:12:56.760 --> 0:12:59.600 thing that we often hear is, um, Okay, we get 0:12:59.600 --> 0:13:02.160 your star's your your charts are excellent. We understand the 0:13:02.160 --> 0:13:06.320 problem you're um, you're describing, but there's there's nothing we 0:13:06.320 --> 0:13:08.959 can do about it because of exactly the reasons you suggest. 0:13:08.960 --> 0:13:11.480 The baby boomers there's lots of them, and they're they're 0:13:11.679 --> 0:13:13.840 they're quite good at turning out to the polling stations 0:13:13.840 --> 0:13:16.679 when we have elections. So so it's kind of painted 0:13:16.679 --> 0:13:20.440 as a politically intractable issue and we don't think that's true. 0:13:20.440 --> 0:13:23.320 We don't um. You sort of use the word war 0:13:23.400 --> 0:13:25.720 at the beginning of this piece, and I actually we 0:13:25.880 --> 0:13:28.559 don't think that that's how different generations really see each 0:13:28.559 --> 0:13:31.400 other in society. We think if you look at transfers 0:13:31.440 --> 0:13:33.880 in the fact, within the family, you can see generations 0:13:34.520 --> 0:13:37.440 with huge willingness to help each other out. And even 0:13:37.480 --> 0:13:40.040 if you look at really tough questions like attitudes to 0:13:40.120 --> 0:13:43.800 house building in the UK, we're seeing attitudes shifting. So 0:13:43.880 --> 0:13:47.000 traditionally the baby boomers have been very anti building houses 0:13:47.040 --> 0:13:50.040 in their local area because it might affect the value 0:13:50.040 --> 0:13:53.080 of their own assets. But even in kind of four 0:13:53.400 --> 0:13:57.320 four year period between twenty and fourteen, their appetite for 0:13:57.360 --> 0:13:59.719 local house building doubled, so it went from about a 0:14:00.040 --> 0:14:01.800 utra of them saying they were up to it to 0:14:02.000 --> 0:14:04.640 over half and that's just over four years. So I 0:14:04.640 --> 0:14:07.840 think as this crisis becomes more and more stark, public 0:14:07.880 --> 0:14:11.480 attitudes are definitely shifting towards a renewed look at the 0:14:11.520 --> 0:14:14.840 social contract that that deals a better hand to all generations. 0:14:14.840 --> 0:14:17.280 In turn, so for the younger generation that means a 0:14:17.280 --> 0:14:19.200 better chance to get on the housing ladder and a 0:14:19.240 --> 0:14:22.640 better chance a secure career. But there's also things we 0:14:22.680 --> 0:14:24.880 need to do for the older generation, like fix our 0:14:25.160 --> 0:14:28.000 broken social care system. So we want to look kind 0:14:28.000 --> 0:14:31.480 of across generations in the round, and we can see 0:14:31.560 --> 0:14:35.360 evidence that there's attitudes in society shifting towards rectifying some 0:14:35.440 --> 0:14:37.040 of these balances. Because at the end of the day, 0:14:37.280 --> 0:14:40.560 no granny wants to watch their their grandchild struggle in 0:14:40.560 --> 0:14:42.600 the labor market, struggle to get on the housing ladder. 0:14:42.600 --> 0:14:45.480 And I think that that metaphor stretches across society as 0:14:45.480 --> 0:14:47.760 a whole. I want to talk a little bit further 0:14:47.840 --> 0:14:51.640 about the housing situation, because I mean, it's also the 0:14:51.680 --> 0:14:54.800 case in the US that homeownership braids are on the 0:14:54.840 --> 0:14:56.840 decline and there for a lot of young people and 0:14:56.920 --> 0:15:00.000 even young professionals, but you know, tugging here in New 0:15:00.040 --> 0:15:03.400 York City, the idea of home ownership just seems completely 0:15:03.600 --> 0:15:06.600 out of reach for people. It's also the case, and 0:15:06.760 --> 0:15:10.000 various economists have talked about it, that the unequal distribution 0:15:10.040 --> 0:15:13.680 of housing wealth is perhaps one of the biggest contributors 0:15:13.720 --> 0:15:17.400 to inequality overall, and that housing sort of tells the 0:15:17.600 --> 0:15:21.000 entire story. Um, how did this happen? Like when you 0:15:21.040 --> 0:15:24.720 sort of identify, like when homeownership was this thing that 0:15:24.840 --> 0:15:27.880 sort of everybody could access if they had a job, 0:15:27.960 --> 0:15:31.240 to this thing that really seemed out of reach for 0:15:31.320 --> 0:15:33.960 a lot of people. Was there turning point or was 0:15:34.000 --> 0:15:36.640 there just sort of this slow trend of higher and 0:15:36.720 --> 0:15:40.080 higher house prices squeezing more and more people out. It's 0:15:40.120 --> 0:15:42.200 definitely there were definitely some turning points, and I think 0:15:42.440 --> 0:15:44.760 it's certainly not the baby Beaver's fault. They just they 0:15:44.800 --> 0:15:48.480 just happened to come along at just the right time 0:15:48.600 --> 0:15:50.800 on this kind of housing journey. So how am ownership 0:15:50.840 --> 0:15:53.880 started taking off in the UK in the nineties sixties, 0:15:53.920 --> 0:15:59.040 accelerated in the seventies and eighties. Um, the ownership took off, 0:15:59.080 --> 0:16:02.040 but is didn't really take off, so the value of 0:16:02.040 --> 0:16:04.240 those assets that the baby bimssic at their hands on 0:16:04.680 --> 0:16:07.480 until the nineties and then particularly the early two thousands. 0:16:07.520 --> 0:16:11.080 So baby memors got into the housing market through the sixties, 0:16:11.120 --> 0:16:14.040 seventies and eighties, lots of them got themselves houses, and 0:16:14.080 --> 0:16:17.560 then a few decades later, the value of those assets 0:16:17.560 --> 0:16:20.880 absolutely shot through the roof, so suddenly they're a lot wealthier. 0:16:21.600 --> 0:16:24.320 And then, um, the reason why the value of those 0:16:24.320 --> 0:16:26.240 assets were shooting through the roof was because we weren't 0:16:26.240 --> 0:16:29.440 building enough home so the product was becoming more scarce. 0:16:29.800 --> 0:16:32.000 And then the kind of third phase in that journey 0:16:32.080 --> 0:16:35.040 was what happened around the financial crisis in this country, 0:16:35.920 --> 0:16:39.440 which is that we as reflecting on many of the 0:16:39.440 --> 0:16:42.520 causes of the financial crisis, we created much stricter criteria 0:16:42.600 --> 0:16:45.640 for mortgage lending, so the deposit requirements to get on 0:16:45.680 --> 0:16:48.520 the housing ladder became much much bigger, which meant they're 0:16:48.520 --> 0:16:50.720 not only our houses are lot more expensive, but that 0:16:50.920 --> 0:16:53.720 young people looking to buy a house needs to get 0:16:53.720 --> 0:16:57.560 a much bigger proportion of that cost together in order 0:16:57.600 --> 0:17:00.840 to be able to get a mortgage and and get 0:17:00.880 --> 0:17:03.920 into her home ownership themselves. So those kind of phases 0:17:03.920 --> 0:17:05.760 of development in the housing market in the UK have 0:17:05.840 --> 0:17:08.240 all been kind of timed just right for the baby 0:17:08.240 --> 0:17:11.359 Boomers and and really turned quite badly for the millennials. 0:17:11.840 --> 0:17:15.359 It sort of speaks to the luck involved in accumulating wealth. 0:17:15.480 --> 0:17:17.359 Right if you're around at the right place at the 0:17:17.440 --> 0:17:20.240 right time, you can find yourself with you know, a 0:17:20.280 --> 0:17:23.480 pretty normal blue collar job, but owning two properties that 0:17:23.520 --> 0:17:27.040 eventually shoot up in wealth, and then suddenly you've kind 0:17:27.040 --> 0:17:30.159 of got it made. But they don't seem to be 0:17:30.400 --> 0:17:36.879 obvious policy solutions to that sort of generational luck. There aren't, 0:17:36.880 --> 0:17:39.200 but there are there are. There are very clear policy 0:17:39.240 --> 0:17:42.120 decisions kind of underlying that luck. So I would say 0:17:42.119 --> 0:17:44.120 it's I would say the baby boomers were lucky and 0:17:44.160 --> 0:17:46.240 being part of a cohort that kind of experience all 0:17:46.320 --> 0:17:48.920 these things, But it wasn't an accident. There were policy 0:17:48.960 --> 0:17:51.840 decisions in this country to not continue the levels of 0:17:51.840 --> 0:17:54.280 house building we had in the nineteen fifties and sixties, 0:17:54.280 --> 0:17:57.679 for example, which which underpinned a lot of the subsequent 0:17:57.720 --> 0:18:02.720 trends I described. So, yes, it's it's messy. There's a 0:18:02.720 --> 0:18:06.760 lot of luck involved. The generations involved were not necessarily 0:18:06.800 --> 0:18:08.919 the masters of their own destiny and shouldn't be blamed 0:18:08.960 --> 0:18:11.480 for what's happened. But we should look very critically at 0:18:11.480 --> 0:18:14.000 the public policy choices that kind of led to these outcomes, 0:18:14.040 --> 0:18:17.040 because it wasn't just an accident um that there were 0:18:17.080 --> 0:18:18.879 some very clear decisions about what we do in the 0:18:18.920 --> 0:18:21.880 housing market, what are planning policy does, what what we 0:18:22.280 --> 0:18:24.440 how we controlled by the rents and things like that 0:18:24.440 --> 0:18:26.520 that have kind of led to the housing situation young 0:18:26.560 --> 0:18:31.960 people face today. So, Laura, you mentioned Brexit briefly, Let's 0:18:32.040 --> 0:18:34.919 talk about the voting outcome there, because that seemed a 0:18:34.960 --> 0:18:39.600 really clear example of a generational divide. Was that with 0:18:39.720 --> 0:18:43.639 younger people usually voting to stay in the European Union 0:18:43.800 --> 0:18:48.000 and older people voting to get out. Was that a 0:18:48.040 --> 0:18:52.760 reflection of the different economic experiences between the generations. I 0:18:52.800 --> 0:18:56.879 think it's a sort of understanding the reasons behind the 0:18:56.920 --> 0:18:59.800 Brexit voters, Like the million dollar question in the UK 0:19:00.000 --> 0:19:02.320 the moment. But you're right to highlight the very very 0:19:02.359 --> 0:19:05.360 clear differences by age, and I think actually the differences 0:19:05.359 --> 0:19:08.720 between different age groups are bigger than the differences between 0:19:09.160 --> 0:19:14.320 different geographies kind of different um political affiliations. It's it's 0:19:14.320 --> 0:19:16.600 one of the clearest device you can see when when 0:19:16.640 --> 0:19:20.359 analyzing the Brexit vote. UM. I think to some extent 0:19:20.560 --> 0:19:24.399 it reflects the fact that older generations are what we 0:19:24.520 --> 0:19:30.280 might say excluded and sorry insulated from the consequences of Brexit. 0:19:30.359 --> 0:19:32.320 So if they're out of the labor market, if they 0:19:32.359 --> 0:19:34.919 own their own homes already, then even if there is 0:19:34.960 --> 0:19:38.160 some economic term or to come, is kind of unlikely 0:19:38.240 --> 0:19:41.600 to affect them because they're they're not as actively engaged 0:19:41.640 --> 0:19:44.800 in the economy as younger people. But there's also a 0:19:44.880 --> 0:19:48.080 lot of non economic reasons, which which others have talked 0:19:48.080 --> 0:19:51.000 about much more eloquently than me, that have driven this. 0:19:51.680 --> 0:19:55.359 But our kind of position on this on the Brexit 0:19:55.480 --> 0:19:58.440 vote is that it's it's happened now and the UK 0:19:58.600 --> 0:20:02.080 is in the process of charting its course through leaving 0:20:02.080 --> 0:20:04.600 the EU, and we need to make the best job 0:20:04.640 --> 0:20:07.200 of that we can. But we also need to reflect 0:20:07.359 --> 0:20:11.680 on the concerns of those who might feel that their 0:20:11.800 --> 0:20:15.879 voices haven't been heard, largely the younger generations, and and 0:20:15.920 --> 0:20:19.119 look at what we can do to to reunite the country, 0:20:19.160 --> 0:20:21.160 if you like, reunite our divided nation. And I think 0:20:21.359 --> 0:20:25.240 addressing some of the intergenerational challenges I've highlighted is a 0:20:25.280 --> 0:20:27.520 crucial challenge for the new government and the new Prime 0:20:27.520 --> 0:20:30.720 Minister if she wants to heal some of the divides 0:20:30.720 --> 0:20:33.000 that the whole process of going through the referendum has 0:20:33.040 --> 0:20:35.600 opened up. And it was really really welcome in our 0:20:35.600 --> 0:20:39.800 new prime minister to reason Maze first couple of speeches 0:20:39.840 --> 0:20:43.160 as Prime Minister, or just before she she she won 0:20:43.760 --> 0:20:48.000 the contest, she she highlighted the intergenerational challenges I've been 0:20:48.000 --> 0:20:51.200 talking about more than once. So there's I think I've 0:20:51.240 --> 0:20:54.160 talked about, you know, maybe attitude softening and maybe they're 0:20:54.160 --> 0:20:56.919 being the possibility for policy change in this area, and 0:20:56.960 --> 0:20:58.760 the fact that the new government has put the issue 0:20:58.800 --> 0:21:01.520 front and center is a signal that we think that 0:21:01.720 --> 0:21:05.240 the time for addressing these intergenerational challenges in the UK 0:21:05.400 --> 0:21:08.439 has come. So the Brexit vote creates a challenge but 0:21:08.480 --> 0:21:10.480 also an opportunity to think about how we can bring 0:21:10.480 --> 0:21:13.680 the generations back together. Yeah, it does seem as though 0:21:13.680 --> 0:21:16.880 there's been a little bit of a shift on all 0:21:16.960 --> 0:21:21.880 sides of many um many spots on the political spectrum, 0:21:21.960 --> 0:21:26.119 just sort of questioning the sort of particular strand of 0:21:26.520 --> 0:21:30.280 sort of free market financial capitalism that we've seen in 0:21:30.400 --> 0:21:34.960 recent years. Obviously everyone has different critiques, but it feels um, 0:21:35.040 --> 0:21:38.800 you know, listening to Theresa May, that people are questioning 0:21:38.840 --> 0:21:41.720 some of the orthodoxies for the last several years. That's 0:21:41.720 --> 0:21:45.240 absolutely right, I think. I think having um at the 0:21:45.280 --> 0:21:48.359 point in which we're going through such a huge political 0:21:48.440 --> 0:21:51.679 change as leaving the EU, is it's absolutely right to 0:21:51.680 --> 0:21:55.359 to think critically about the model we have, the economic model, 0:21:55.359 --> 0:21:58.320 of the political model, and and and who that might 0:21:58.359 --> 0:22:00.320 be working for and who it might not be. So 0:22:00.760 --> 0:22:03.080 so a lot of that comes through the generational debate. 0:22:03.119 --> 0:22:06.399 But we've also heard Thereason May talk a lot in 0:22:06.480 --> 0:22:09.800