The cards dealt to the baby boomers and younger generations

Could Generation Y “end Britain’s love affair with car ownership”?  I just read in Marketing that TNS predict they might.  In part this is for positive reasons like the increase of car sharing, new digital models for motor rentals and increased environmental awareness.  It is also about a lack of money within this hard pressed generation.  They have lower incomes, greater unemployment and less access to benefits.  The cost of motoring, on the other hand, continues to climb.

I’m reminded of the Generation Poker Game that I created for an agency roadshow given by Nick Hewat who is now the commercial director of The Guardian.  Nick described the cards that Generation Y had been dealt and compared them to the cards their Baby Boomer generation parents held.  The script ran as follows…

“The first winning card the Baby Boomers were ever dealt was Social Mobility.  They benefited from the creation of more middle class jobs.  The growth in corporations and financial services required more middle managers.  You didn’t need a degree to get on then, as only 4% went to University when they left school. This is up to 40% now, so it is much harder to stand out with a degree.  Theirs was the age of social mobility.

Their second winning card was career structure.  They went from the structured world of their grammar schools to the structure of a job for life.  This provided security and a defined career path.  They could see their future so they started on it: the got married and had kids before they were 30.

Their third card was the attainability of housing.  At the point that they were starting a family, the gap between the richest people and the average wage was at its smallest in the last 100 years. Such a small gap meant the rich weren’t pushing house prices out of reach so they got on the property ladder early, in the 80’s.

The fourth card is a big fat ace.  The explosion in house prices.  This is arguably the biggest driver behind the fact that the Boomers have over 80% of the nation’s wealth, more than any other country in Europe. Their first house, on average, cost 26k.

Their 5th card is a source of anguish for them.  Younger people finding it hard.  With greater disposable income, they can afford more than younger people can, so they’re buying second homes and all the things that fill it, as the younger generations can’t currently compete with them in the housing market.

Altogether, those cards make a Royal Flush and as you’ll probably know, that’s the top hand in Poker.  Generations X and Y can only really hope to keep up, so let’s look at the game they are playing.

It starts well.  It’s an even better card than social mobility and is called Opportunity Hoarding.  The middle class Boomers ensured their kids had all the opportunities.  They sent their children to private schools or they moved into the catchment areas of good schools.  It got them into university and it got them good jobs. In Britain, the influence of parental income on their children’s earnings is amongst the strongest in the West.

But Opportunity Hoarding also created massive expectations – these new generations were brought up to think they’d do better than the Boomers, but really that’s like hoping to do better than a Royal Flush.

So, their first bad card was… the declining number of middle class jobs in Britain.  This was already happening before the financial crisis because of computerisation and globalisation – but the crash has accelerated it.  The proportion of graduates in lower skilled jobs is up from 27% in 2001 to 36% now.  Each graduate position is chased by 43 applicants, and the proportion of graduates who are unemployed has doubled, to 20%.

Next bad card – The hourglass economy.  When those jobs disappeared, they started disappearing from the middle.  This created the shape of an hourglass.  The missing jobs used to be the rungs of the old career ladder so it is now harder for people to rise from the bottom to the top.  It makes it hard for younger people to see their career progression. It creates teams in which the team leader is less able to delegate because those under them are too junior so neither they nor the team leader progress.  They’ve lost their number 2’s who would have filled that void.

Their 4th card isn’t great either.  The gap between the rich and the average wage has widened.  In fact, the top 1% of earners take home 18% of all income in Britain.  It was only 12% 15 years ago.  It has now become the biggest income gap in the country since the end of the 1st World War. The wealthy are still spending so luxury brands and upmarket shops are booming, whilst everyday items like petrol and food are increasing in price – hence the move to cheaper supermarkets by people in the squeezed middle.

And now for their final card.  It’s a good one, an ace. This card is The Bank of Mum and Dad.  It has become increasingly important as people now have less access to credit.  Parents are becoming ‘hotel parents’ as over a quarter of under thirty year old adults live at home. Over a quarter of parents say they expected to carry on financially supporting their offspring for the rest of their lives.

So Generation Y have a couple of aces in their hand.  That makes a pair in Poker and that can win money sometimes, but not against the Baby Boomers Royal Flush. They would be forgiven for feeling unlucky in the circumstances”.

Since I created this poker game there have been hundreds of articles in the press with research findings about a hard pressed younger generation.  The stats they describe would be so easy to fit into the ‘card game’ framework of this presentation.  This is because the presentation was written after hours of desk research, looking at the stories in the news about the groups who were struggling and those who were thriving despite the recession.  It seems we weren’t all in it together, Mr Osborne.  The presentation built the case that ad agencies need to rethink the idea that all advertising should be targeted at those aged 25-44.  They aren’t the ones holding all the cards anymore.

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