1. Finding Out About the Young Generation’s Opinion on Long-Life Societies — Three Vain Attempts
A first, common-sense approach to finding out about the attitude of Western Europe‘s younger generation towards ageing and the long-life society is to have a look at NEON1. This monthly magazine is printed in an edition of roughly 300,000 copies and is mostly read by young adults between 20 and 30 of both sexes in Germany, Austria and Switzerland. NEON has a reputation for keeping track of the thinking and the attitudes of the younger generation. Rather astonishingly, there is hardly any coverage of ageing and the long-life issue in recent NEON editions. This fact is astonishing indeed because it will be precisely the generation between 20 and 30 who will experience the peak of the recent development towards ageing societies in all Western countries.
A second, more analytical approach to finding out about the younger generation’s attitude towards ageing and long-life societies is to have a look at the most recent edition of the Shell Youth Study2. The latest study has interviewed teenagers and adolescents aged between 12 and 25 about their attitude towards being old. Only 21% of those interviewed expressed a rather negative attitude towards being old (‘being done with life’). Another 48% reported that being old rather means to be able to enjoy life. 31% even expressed the view that being old means to be ready for new challenges. The picture that young people have nowadays of being old is an astonishingly positive one. Almost 80% of those interviewed in the Shell study tend to see its advantageous aspects. However, the young people who have been interviewed in this study have projected their views on the current older generation. Unfortunately, they were not asked how they see themselves in society once they are old. This would have been an extraordinarily interesting question as it is precisely today‘s younger generation who will experience the phenomena of demographic change, ageing societies and long life to the fullest extent in the course of the coming decades.
A third, yet subjective approach to finding out about the younger generation’s attitude is the tt303 annual poll. tt30, the young think tank of the Club of Rome is composed of 30 young professionals around the age of 30. Its members work in the business community, in research positions and in the public sector in countries all over the world. Once a year the group meets for it’s annual conference and conducts a poll in order to find out which are the most pressing, emerging and relevant issues to deal with over the next months. Though the method of the group’s poll is very simplistic the outcome is sometimes rather insightful. at tt30‘s 2005 annual meeting the issue of ageing and long-life societies came up — and scored 20th out of 21 issues ranked in order of their perceived relevance in the poll.
To conclude from these three insights, it is certainly true that old age and long-life societies have a rather positive connotation for the young generation. On the other hand, these issues are apparently largely irrelevant to this age group. So we are facing a paradox: While it is the younger generation that will experience the effects of ageing and demographic change to the fullest extent in their own life cycle the same young generation takes hardly any interest in this issue. How can this contradictory perception be explained?
2. How to Explain the Younger Generation‘s Scant Interest in the Long-Life Phenomenon
2.1 Long-Term Financial Flows
One possible explanation can be found if we take a look at some typical long-term financial flows during an average person‘s working life. For reasons of simplicity I propose to divide this traditional schematic work cycle into three stages:
1. The ‘rush hour of life’. This is typically the period between a person‘s twenties and mid thirties. During this time the young generation has to finish their professional education (nowadays typically at university level), find a first job, invest much working time in their career, get settled down, get engaged, get married, set up a family, educate children and possibly buy a property.
2. The ‘rush hour of life’ is typically followed by a mid-life phase where most of the goals from the previous stage have been achieved while the working life career is still advancing.
3. Finally, the mid life phase is followed by a phase of seniority which is typically characterised by a reduction of long-term financial obligations: Children are grown up and mortgages are paid.
Since the beginning of the 20th century, a state-controlled risk insurance system (composed of health insurance, unemployment insurance, old age insurance and others) has covered individual risks throughout all three phases of the work cycle in most Western European countries.
However, it is precisely this traditional work cycle scheme that has recently been undergoing drastic changes, especially in the ‘rush hour’ phase. In a non-traditional work cycle the first long-term financial flow is now often the re-financing of tuition and university fees that have accumulated during the bachelor and master studies. Several European countries that used to have fully state-financed university systems have recently introduced tuition fees, e.g. Germany with fees ranging from EUR250 to EUR1,000 per semester. Tuition fees in countries where students have to substantially contribute to the financing of their studies, e.g. the UK, tend to rise continuously.
Apart from the traditional long term capital flows for raising children (average cost per child in Germany: EUR 426 per month) and buying property (average mortgage in Spain: EUR789 per month) there is another additional financial burden for the ‘rush hour’ generation: The traditional state-financed risk insurance system is becoming less effective. The probability of having individual risks (such as illness, old age or unemployment) fully covered by the traditional Western European welfare state is diminishing. The compulsory contribution to the old age insurance in Germany has increased from 15% of gross salary in 1969 to 19.9% of gross salary in 2007. This rise is obviously due to the demographic shift and, though forced by legislation, it is an act of solidarity by the younger generation towards the older. Pension payments, however, are forecasted to decline from 67% to little more than 50% of last salary over the next few decades.
As a consequence, from a young generation‘s perspective, the traditional Welfare State tends to become a risk in itself for long-term financial planning as there is often no way to avoid high contributions to state-controlled risk insurance systems.
From a young generation‘s view, contributions to state-controlled insurance systems are often to be regarded as an investment à fonds perdu. To compensate for the loss of security caused by the declining overall performance of the classical welfare state, the ‘rush hour’generation is often obliged to insure individual risks in capital-based fund models, which, of course increases their individual financial burden.
Gordon Henrik Wollgam: tt30 The Club of Rome’s Youth Organization, Zurich, email@example.com
2 Since 1953 the Shell company has been conducting a comprehensive youth study in Germany. Teenagers and adolescents are extensively interviewed about their values and attidudes towards the future. Results are regularly published as books or in summaries in the web site (www.shell.com/home/content/de-de/society_environment/jugendstudie/2006/dir_jugendstudie.html). This study is only conducted in Germany.
3 For further information see www.clubofrome.org/tt30 .
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