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Will Increased Income and Wealth Disparity Lead to Generational Class War?
Dave Pollard, How to Save the World
…A recent survey in the UK shows that, between 1995 and 2005, the average net wealth of 18-to-24 year-olds remained at zero, that of 25-to-34 year-olds fell from $3000 to $995, and that of 55-to-64 year-olds tripled from $50,000 to $150,000, although their total debts actually rose during that period.
In the US, reports USA Today, all of the increased wealth since 1989 has accrued to those 55 years of age or older. Like in the UK, the big losers have been those who are now 35 to 50. This generation doesn’t look poor — they have as much stuff or more than previous generations at the same age, but their debts are astronomical. They are horrifically vulnerable to an interest rate spike (even a small one like the one that has, along with the US housing crash, created the current credit crisis). The disparity is expected to increase, and accelerate.
At a recent financial executives conference in Toronto, Peter Bernstein, one of the world’s most distinguished economists told the (mostly older) crowd that income and wealth disparity posed the largest single threat to economic security and political stability in affluent nations. The people I spoke to afterwards said they didn’t believe him. I wonder why.
(17 October 2007)
Links and more at original. -BA
Why is Vancouver eating its young? Nothing cool about that
David Beers, Globe & Mail
When Vancouver advertises itself, the faces on the condominium billboards are young and smiling, poised to Live! Work! Play! And yet, is there any other Canadian city more ruthless toward its young adult citizens?
Talk to Vancouverites in their 30s or younger, and you learn why, despite a booming economy, a lot of them doubt they’ll spend their futures here. Which can’t be good for the city’s own future.
Young people, of course, tend to rent while taking a city’s measure and working toward owning a home. In Vancouver, the rental vacancy rate is under 1 per cent. Landlords, therefore, can be very picky, and so a caste system has developed among prospective tenants. To be young is to occupy a bottom rung. To be young, male and not in graduate school, the very bottom.
Almost all the new rental housing coming on line is investor-owned condos, and so those rents are in sync with the city’s famously skyrocketing house values. The result, according to a report in the newspaper Georgia Straight, is a crisis placing hundreds of young Vancouverites at risk of swelling the homeless ranks.
Nowadays in Vancouver, if, like me, you are middle-aged and own your digs, it can seem cruel to invite younger adults over for dinner, a taunt to those whose incomes are relentlessly outstripped by real-estate inflation. Even worse, you begin to sense that you and your guests are on opposite sides of a political divide. You are, after all, a member of the generation that is asking the young to endure and solve global warming, but what have you done for them lately, besides pouring fine wines in a heritage home of the sort they can never aspire to have?
Much as the real-estate windfall graced middle-aged Vancouverites like myself, rising resource commodities prices have helped B.C.’s Liberal government run surpluses in the billions of dollars for several years now. But, for the young, the same government has more than doubled university tuition fees since 2001. And it’s given its MLAs a fat raise while refusing to up the minimum wage to $10 from $8. To add insult, the Liberals let employers pay a “training wage” of just $6 an hour to workers starting out, most of whom, of course, are young.
Spiralling housing and education costs. Low entry wages, weak public transit, kids living on the street and greenhouse emissions spewing away. If these seem vexing “issues” to older people, the young tend to bundle them as “boomer legacies,” burdens unfairly shifted onto them, says opinion researcher Angus McAllister. Politicians ignore at their own peril this way that youth filter politics, he suggests.
David Beers is founding editor of The Tyee
(22 October 2007)
Related in the Globe & Mail: The young, roofless urbanite.
The heat or eat dilemma
Deborah A. Frank and Joseph P. Kennedy II, Boston Globe
THE ALL-TOO-THIN baby on the pediatric exam table does not know that oil prices recently topped $80 a barrel. With almost no fat on his malnourished body, he is unable to tolerate for even a brief period being undressed by his doctor.
His mother wonders how she will keep the house warm, food cooked, and lights on through the coming winter for the boy and his sister, while making sure that they have enough to eat. She is not alone in her anxiety. The price of heating oil is projected to exceed $3 per gallon this winter, and electricity and natural gas costs remain high. Last week, heating oil prices in Massachusetts reached their highest levels ever at $2.72 per gallon, according to the Massachusetts Department of Energy Resources. Between March and May, 1.2 million households had their electricity shut off due to last winter’s overdue energy bills.
A new report by the Children’s Sentinel Nutrition Assessment Program demonstrates that this “heat or eat dilemma” was depressingly familiar to America’s poor and near-poor families and their doctors.
Federal research shows that while both rich and poor families increase their expenditures on home fuel during the winter, poor families offset this cost through decreasing food purchases, with an average 10 percent decrease in caloric intake. Parents know that children can freeze to death more quickly than they starve to death, and so most decrease food purchases first to pay for heat.
(21 October 2007)
Living paycheck to paycheck gets harder
Anne D’Innocenzio, Associated Press
The calculus of living paycheck to paycheck in America is getting harder. What used to last four days might last half that long now. Pay the gas bill, but skip breakfast. Eat less for lunch so the kids can have a healthy dinner.
Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It’s starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc., 7-Eleven Inc. and Family Dollar Stores Inc.
Food pantries, which distribute foodstuffs to the needy, are reporting severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking their help.
While economists debate whether the country is headed for a recession, some say the financial stress is already the worst since the last downturn at the start of this decade.
(19 October 2007)
Contributor John writes:
I was just perusing EB’s postings dated 10/18 under Oil Prices. I read the Christian Science Monitor excerpt Pocketbook pinch ahead – if oil prices stay high. The CSM article projects that continuing oil price increases could have an impact on consumers.
The article above is more emphatic – it is not a question of if , the effects of energy prices on people is a here-and-now reality.
Also of note, the article points out that rising food and energy prices are the main factors why people are finding it hard to make ends meet. Food and energy as I’m sure you are aware, are not calculated into the CPI or core rate statistics – the government’s gauge on inflation. The AP article unfortunately doesn’t make clear this incongruity.
