Young people’s economic disadvantage is unlucky – not unjust

It’s unfortunate that demographic shifts mean that young Australians will have to support a large number of older Australians. But it is not an injustice. Shutterstock

Australia’s wealth is increasing but young Australians are not reaping the benefits. Older Australians are becoming richer while those in younger generations are going backward in real terms.

According to a 2014 report by the Grattan Institute, households of those aged 65 to 74 are A$200,000 wealthier than households of that age were eight years ago. Those aged 25-34 are less-well-off than people of that age eight years ago.

The downward trend in the wealth of generations is repeated in many other countries, according to a recent Guardian report:

It is likely to be the first time in industrialised history, save for periods of war or natural disaster, that the incomes of young adults have fallen so far when compared with the rest of society.

This is not the way things are supposed to go. We expect each generation to be better off than their elders and we assume this will automatically happen if our economy grows. The failure of these expectations puts in doubt the long-term future of the Australian economy. It also raises a moral question: is our society being unjust to younger generations?

Some philosophers are more demanding than others about what intergenerational justice requires. But most agree on a bottom line: a society ought to provide younger generations with well-functioning social services and institutions along with sufficient resources for a good life. It should not treat some generations more favourably than others without good reason.

Satisfying these basic requirements of intergenerational justice does not require that generations be equally well-off. It does not require a society to ensure that younger people are able to buy homes or provide a private education for their children. It is not unjust if some goods that older generations enjoyed are out of their reach.

It is not the fault of older generations that they enjoyed a debt-free education, stable employment and lower house prices.

But younger generations will not live good lives if their jobs and living conditions are insecure, and if they cannot provide a good education for their children. If young and future Australians have to give up the dream of home ownership, then tenancy must be more secure. If they cannot afford to send their children to private schools, then state schools must be better funded.

If future jobs are going to be insecure then perhaps governments should consider providing everyone with a guaranteed minimum income.

Basic requirements of justice do not mean that generations should have equal capacity for gaining wealth, but younger generations do have reason to complain of injustice if their government favours those members of older generations who are already wealthy.

Some policies of Australian governments arguably have this effect. Tax breaks for those able to contribute large sums to their superannuation fund and for those who are wealthy enough to invest in property are examples.

However, it is not unfair that the Australian government pays more to the elderly for pensions and health care than it pays for services to younger generations. Older people have needs that a society must meet and each generation has a responsibility to support its elders.

It is unfortunate for young Australians that an ageing population will give them so many elderly to support. But it is not an injustice. It is not the fault of baby boomers that they are so numerous. They cannot be blamed for living longer and wanting good medical services.

But the burden on young people is unjust when healthy and wealthy members of older generations fail to shoulder more of the costs, especially if this results in a lack of adequate resources and social services for younger generations.

One of the themes of Australia’s intergenerational reports, especially under Liberal governments, is that governments should not incur a debt that younger generations will have to pay. A national debt is not always an injustice to younger generations. Going into debt to defend the country, protect the environment and build infrastructure can be justified if they ensure the well-being of all generations.

But a government acts unjustly if it protects the wealth of older generations by transferring a disproportionate share of the costs of its policies onto younger generations.

One of the most serious injustices committed by the old against the young is to leave them with the problem of dealing with climate change. The consequences could undermine the ability of the young and future generations to live good lives.

According to basic standards of intergenerational justice, Australian governments are being unfair to younger generations. The reason they can get away with injustice is that younger generations have less political influence than in previous generations. At the 2013 federal election almost half the people registered to vote were over 50. Children and future Australians have no say at all.

A better deal for younger and future generations depends on the willingness of older Australians to respond to the demands of justice.