It has been far more difficult for my generation to get on the property ladder, we have no hope of having a pension like those of the baby boomers, writes Daniel McConnell
The centre must hold.
A phrase which has been in vogue since now finance minister Paschal Donohoe paraphrased the Yeats poem ‘The Second Coming’ during his budget speech last year.
His was a response to the rise of populism, left wing and right wing, not just in Ireland but across the world in the wake of the financial crash. Donohoe has been on a sort of one-man mission to defend the centre from these noisy fringe voices who certainly made an impact on world affairs, from water charges here in Ireland, to Brexit in the UK.
He has railed against the shameless populism of the Paul Murphys, the Sinn Féins, and the UKIPs of the world who, if given the chance, would see a position where mere anarchy is loosed upon the world, as Yeats put it.
However, the question I ask is, just how can the centre hold when those in charge have allowed it crumble?
The three main reasons to play by the rules — job security, pension provision and the ability to buy a home — have been removed from the youngest generation of people now in the workforce.
To shed some light on my argument, let me explain.
My late dad, John McConnell, would have been 72 this year; so would my late mum Ann. Both died young, long before their time.
They would have, had they lived, been enjoying retirement in the knowledge their after-work life was more than adequately catered for.
Both were born in Dublin in the shadow of the Second World War in 1945, and therefore were so-called baby boomers. Those between 1945 and 1964, boomers are defined as
the lucky generation that has had previously unrivalled opportunity and wealth.
However, in my view, they were also part of the generation which has since connived to hoard and gorge that wealth, at the expense of their children. Unlike the generation that went before them, and the generation that has come after them, the boomers were the generation that has benefited most from the two greatest forms of personal wealth — property and pensions.
My parents’ generation, taken as a whole, has gathered unparalleled wealth and power, all at the cost of their children. I am not saying everyone of that vintage is loaded, but as an age cohort, that is where the money is.
As a result, I and my generation are paying higher taxes, working longer hours for less reward, will have far less job security, will have to make do with much poorer pensions — all to pay for their good time.
It is undeniable that the baby boomers have had the most extraordinary luck to have been born when they were. Now, having had the most extraordinary deal in terms of society, they have selfishly dumped their party bill on the shoulders of their kids.
My dad was a civil servant for most of his career. My mum stayed at home and reared six of us until her death at the age of 46 in 1991.
Both university-educated, they grew up as part of the luckiest generation in Ireland.
We grew up in middle-class Stillorgan, Dublin, as a single-income family.
We weren’t rich, but neither were we poor. However, specifically, how is my generation worse off than my parents’?
It has been far more difficult for my generation to get on the property ladder, we have no hope of having a pension anything like those of the baby boomers and fewer and fewer of us have anything like the promise of a job for life.
And, when my parents bought our house, my Dad’s one salary was enough to pay the mortgage and raise us. Today, to have a hope of buying a house, two salaries combined are required. Is that progress?
Becoming an adult and starting a family is now slower and more difficult than it was for our parents.
Where they tended to settle down, marry and have kids in their 20s, we are doing so in our 30s. Is this by choice or driven by necessity?
Squeezed out of the property market during the Celtic Tiger boom, many
of my generation were forced to live at home longer, remaining dependent on their parents for much longer, ultimately stymieing their own development and potential contribution to society as a result.
Indeed, the crash in house prices didn’t make it any easier for our generation to buy our first house, because the banks tightened all lines of credit. The boomers — the generation with the most cash — became the generation with the lowest amount of savings.
One of the main reasons our banks failed in 2008 is because they had a lower level of capital than they would have retained in the past. Instead they gorged on cheap credit raised on the international markets. We all know the fallout from that folly.
Now into another bubble, the next generation is set to be locked out of the market, especially in Dublin.
However, whereas my dad and his peers tended to enter into a job and stay with one company or government department for their career, those in their late 20s and early 30s today have no such comfort.
Zero-hour contracts, the need to be more flexible, the need to work longer hours for less reward is our reality.
The crisis in pensions means that those who retire in the next quarter of a century will receive much less per year than their parents who have retired on the old traditional guaranteed final salary pension.
The move en masse away from the defined benefit pension — where people retired with a massive tax-free, lump sum worth up to 1.5 times your annual salary plus an annual pension worth between a half or 60% of your final salary — to the lower defined contribution pensions has been a travesty.
Done because so many defined benefit schemes were massively in debt because they were gorged upon by the boomers, my generation now faces poverty in old age despite having good jobs.
Such a failure to look after the rights of those coming after them has meant a drift towards disenchantment with the centre, as Donohoe calls it.
In his first major speech as Finance Minister in June, he said: “2016 will probably be remembered as the year in which populism found its people — and the people found it. A research paper from the Harvard School of Government estimates populist parties
captured about one in every eight seats in recent European elections with its share of the vote rising from 5% in the 1960s to over 13% now.”
“It is arguable that the rise of UKIP, for example, did not see that party win power, but did see that party win the argument. This argument is even starker given its recent failure to win a single seat in the British parliament,” he said.
A victory won without a single seat in the House of Commons. For the centre to hold, it needs to be protected.
The rewards for those playing by the rules have to be salvaged again. We need to launch a new social contract which will see a real future for those who want this country to succeed.
If we don’t then the rise of populism will only continue. The centre must be protected if it is to hold.
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