A recent study of Resolution Foundation has found that, throughout their 20s, men are currently earning an average of £12,500 less than the generation before them. The rivalry between generation X and Y and the baby boomers has been going on for a while now and has culminated in many an argument on Question Time. So with the matured claiming the young to be “special snowflakes” and the opposite saying they’re out of touch, does this disdain have roots, and is the pay gap having a devastating effect on our relationships?
Whilst wages have gone steadily down, the cost of living has hit an all-time high, with London being at the summit. In fact by 2020 it is estimated that those renting a 2 bed in the capital will need to spend 52 percent of their earnings just on rent. A whopping 22 percent over the threshold that the Department of Housing suggest will start reducing your ability to put food on the table.
Getting into the housing market won’t even help the younger generation, as Hamptons International Estate Agents estimate it would take a single first time buyer 45 years just to save up for a deposit, punishing a prospective home-owner for their lack lustre dating skills. This number, whilst it might shock, isn’t all that surprising, considering a house which in 70’s London would have cost £65,232 in today’s money would now be asking for £473,073.
It’s not unexpected then that morale in young people is relatively low, when Yorkshire Building Society found 3 out of 4 adults identified with the statement “owning a home is essential to feeling I have succeeded in life”. A testimonial which has contributed to the rising number of 30 to 39 year olds packing up their bags and leaving the capital for greener and cheaper pastures.
The pay gap isn’t just having an effect on our professional wellbeing though, as the lack of disposable income for those born between 1981 and 2000, is actually for the first-time reducing birth rates. With young couples unable to afford an upgrade to another bedroom or another mouth to feed, this affects all the living generations, as with no chubby cheeks to squeeze, where’s all that Grandma baby boomer energy going to go?
It’s not all doom and gloom however, with this generation being as creatively inclined as they are, they’re coming up with new ways to live in the capital. Co-living spaces in which large groups of people share communal living areas are popping up all over the city, turning warehouses and empty industrial spaces into homes. The canals have also never been as busy, with those wanting their own space, preferring to pay the small amount of mooring rent that is required for them to be self-sufficient.
Whilst the government have implemented a few helpful schemes, to help those who want a more traditional adulthood, the gap has still barely been bridged. At Goodman Masson, we are trying to rectify this with our mortgage fund and new parent loan, being just a few of the benefits we provide our workers.