Two recent articles have sparked discussion:
The first one is about whether you should spend 8 million on school district housing, or should you spend money on the overall development of your child? Another, is to complain to accompany the child to do the homework, almost to their own old life.
These discussions, though controversial, are all the same: I will do everything I can to give my child the best education he can, to give him a chance to find a good job and earn a good salary so that he can lead a better life in the future.
But a McKinsey study, titled "POORER THAN THEIR PARENTS?", is expected to disappoint the parents. FLAT OR FALLING INCOMES IN ADVANCED ECONOMIES "(< poorer than their parents? Income in advanced economies stagnates or falls >).
In short, McKinsey`s study of the world`s 25 advanced economies shows that the income of the younger generation, the real market income (wage plus property income), is generally lower than that of their parents, meaning that children are poorer than their parents. Even more troubling, the data show that young people are poorer than their parents at every stage of their lives.
The Guardian has a similar report. Data show that 30 years ago, young people`s income would be significantly higher than the national average income, but now the situation is different, in many countries, young people`s income has declined significantly, some of which are already below the national average income of 20%. Italy, for example, is Europe`s worst, with wages for young people holding back badly.
Even more startling, pensioners earn much more than millennials (note: people born between 1980 and mid-1990). Different studies have shown that this trend will continue to worsen if no action is taken.
While the survey does not cover China, it is clear that many of my middle-class friends share this concern. By virtue of their ability to buy a house and buy a car in a first-tier city such as Beijing and Shenzhen, they become rich by starting a business and earn many times more than their parents, but they also believe that their children have received a better education even though they have received a better education. They also have a more international perspective, but in real market income, they do not think children can significantly exceed themselves.
Retired seniors earn more than young people
According to the McKinsey report, 65% of households in a sample of 25 economies (about 540 million- five hundred and seventy nine million nine hundred and ninety nine thousand nine hundred and ninety nine people) experienced a stagnation or decline in real market income (realmarket incomes, including wage and capital income, in a sample of 25 economies in 2014. The left side of the diagram below. Of course, countries through transfer payments and tax policies and other measures, to a certain extent alleviated the decline in the trend, there are still nearly 1/4 households of disposable income (disposable incomes) period stagnation or decline, as shown in the right part of the chart. The figure was only 2% between 1993 and 2005.
As a result, we can draw the conclusion that between 2005 and 2014, the real market income of those who took part in the work was significantly lower than that of those who worked between 1993 and 2005. In other words, the post-80s, post-90s, their income compared to their parents sharply reduced.
Britain`s prime minister, Theresa May, said in a public address that the biggest contradiction in Britain now is not the growing income gap between the highest-income and the lowest-income, but the income gap between the rich middle-aged and the poor. The bigger it gets, the bigger it gets.
According to calculations by the Guardian, with full optimism, it is assumed that young people of the post-80s generation will not earn much in the first few years, but will probably earn about £ eight hundred and ninety thousand in their lifetime after a substantial increase in wages in the later years. This is only 7% more than their parents. You know, the parents of the post-80s make 30% more than their grandparents.
Of course, under less optimistic circumstances, the post-80s can only earn about £ eight hundred and twenty thousand in their lifetime, which is lower than their parents. Therefore, it is likely that the post-80s will become the first generation worse than the previous generation of people.
Therefore, it is no longer a matter of course for the next generation to live better than the previous generation. Here are some of the figures listed in the Guardian:
In France, pensioners have more disposable income than those under the age of 50;
In Italy, the average income of people under 35 years of age is lower than that of under 80 years of age, with a per capita income of pensioners;
In the United States, the average income of people under 30 years of age is lower than that of 65-70-year-olds.
In seven major economies, including North America and Europe, young couples and families have grown much less than the average social income growth rate over the past 30 years, which means young people have held back on average income.
This should be the period since industrial revolution, with the exception of years such as war ages and natural disaster, when the incomes of young people declined the most compared with their predecessors.
The fading American Dream
< New York Times > in an article entitled "Only Half of Americans Exceed Parents`Wealth," only half of Americans have more wealth than their parents, with the exception of discussing that young Americans earn less than pensioners. It also explores in greater depth the more serious consequences of this phenomenon: the solidification of the American class.
Young people who used to have nothing, rely on their hands to spell a future "American Dream" has faded. Young people born at the bottom of society are becoming more and more difficult to move up and into the highest levels of society, and young people born at the top of society are less likely to fall to the lowest class of society.
Figures show that about 40% of people born in the wealthiest class can stay at the top of the pyramid as adults, while only 8% fall to the bottom of society. By contrast, only 4% of people at the lowest level of society can climb to the top of the pyramid through their own struggle, while 40% of the bottom people live in the bottom of society all their lives.
What will happen if young people get poorer?
You can refer to the experience of Japan and Hong Kong.
In Japan, the chronic economic crisis has made it generally difficult for young people to find good jobs and most young people have low incomes, which has also affected their spending, including the motivation to start a family. And the solidification of the class, also let these young people lose the motivation to strive for upward.
So, in Japan, you can see a lot of seniors with good pensions and young people who are struggling and financially lacking sense of security. Such a society is obviously unhealthy.
In Hong Kong, high housing prices make it hard for young people to afford their own homes. Not only did it become a luxury to move out of their parents` home as adults, but even after marriage, young couples had to live in their parents` homes.
What makes young people poorer?
Some people have summed up the following points, which are the direct reasons why young people are getting poorer and poorer today, including increasing consumer demand, rising social unemployment, globalization, foreign populations, and rising housing prices, and so on. These problems have led to declining real incomes for young people in the world`s rich world this year, some well below their parents` levels.
It is clear that the gap between rich and poor in different countries and races has been listed as an important issue affecting human development today, but the gap between generations, parents and children has not been paid much attention to. This trend has increased unabated over the past 30 years. It can be said that the decline in young people`s incomes today in developed countries will also occur in developing countries tomorrow.
So what is the real cause of this trend? I summed up three points from different reports. Of course, with the more extensive attention and study of this problem, we can certainly find more profound reasons.
[经] financial crisis
Whether it was the U. S. subprime crisis in 2007 or the European debt crisis in 2010, the blow was deadly for the two largest economies in the United States and Europe. Then the long recovery has greatly reduced the rate of wage growth, and for young people entering the workplace after the financial crisis, the starting point is much lower than their predecessors.
In addition, you can also look at the growth rate of GDP in the major countries of the world. GDP is an indicator of economic growth, and GDP growth in many countries around the world is slowing down, even backwards, which also means that jobs are becoming more and more difficult to find. The more difficult it is to raise wages.
If the global economy cannot return to the high-growth period of more than a decade or two decades ago, it will be difficult for young people to make the most of it.
Wage income does not catch up with property income
This point, look at everybody`s wage table and house price comparison, very clear.
Suppose both young people started working in Beijing in 2007, just 10 years this year in 2017. In ten years, one bought a house, one did not buy a house, so it is conceivable that the person who bought a house should be worth far more than the one who did not buy a house in a large probability. So for future young people, the difference may be that one parent bought a house, and one parent didn`t buy a house.
In places such as the United States and Europe, home prices are not as big as those in China, but they can also reflect something. By the time they were 30, about 50 percent of those born in the 1950s and 1960s could afford to buy and pay for their homes, according to data. Home prices have been rising over the years, but wages are certainly not going to outpace them, so for post-80s young people, their real income is less, but they need to pay more.
The increasing burden of old-age care
It is an inevitable fact that developed countries are generally aging. At the same time, the number of young people is actually falling, on the other hand, the population of many countries is falling. This means that the state has to pay more taxes on young people to raise the elderly. That is, fewer and poorer young people, more and more support for the elderly, more and more rich.
In addition, for young people, their future pension problem, also worthy of attention and thinking. Data show that nearly 1/4 of young people may not have access to a state pension when they retire; about half of the young people who are expected to receive a state pension will not receive a private pension. In other words, most young adults today have to face a lack of or little pension when they retire a few years later. That means that their quality of life will continue to decline, and they may be poorer.
Another question is, do you think that after you retire, you will still be able to maintain your present standard of living or will it be a big drop in your life?
The findings of these studies suggest that, most likely, young people in the future can live better than their predecessors by inheriting their inheritance.
So you bought it not just for the next generation to go to a good school, to have a good job, to earn a good salary, but more importantly to make sure that they don`t get any worse.
