I’m an economist – the numbers that show we’ve got boomers all wrong

A new analysis by economist Hamish McRae challenges long-held assumptions about the economic fortunes of baby boomers, suggesting that their success was not solely due to timing but also to structural changes and policy decisions that shaped their careers. Born between 1946 and 1964, boomers are often criticized by younger generations for having enjoyed advantages such as free higher education, stable employment, and relatively low living costs. However, McRae argues that this view overlooks the turbulent decades that followed their youth, including high unemployment, rising inflation, and declining job security. McRae's perspective is supported by data showing that early boomers, those born in the late 1940s, had a significantly different experience compared to later boomers. For example, a trainee journalist in 1966 earned £800 annually, which equates to approximately £13,360 in today’s currency. This figure, according to the Bank of England’s inflation calculator, reflects the modest starting salaries for university graduates during the early years of the boomers' professional lives. At the time, universities were free, and students received financial support through grants, making higher education accessible to a small percentage of school leavers. Housing was also affordable, with the average price for a three-bedroom flat in London in 1966 being around £4,760, or roughly £75,800 in current value. Despite these initial benefits, the economic landscape shifted dramatically in the following decades. Unemployment rates began to rise sharply in the 1970s, peaking at 5.6 percent in 1978 before climbing even further in the 1980s, reaching over 12 percent. Industrial unrest became common, driven by soaring inflation, which hit a peak of 24.2 percent in 1975. The Bank of England responded by raising interest rates to as high as 17 percent in 1979, maintaining levels above 8 percent until 1992. These economic conditions created significant instability for many boomers, especially those working in manufacturing or coal mining. For those who managed to secure university degrees, the early years offered promising opportunities. However, the subsequent decades brought considerable hardship. Apprentices in 1966 earned as little as £4 to £6 weekly, translating to £3,500 to £5,200 annually in today’s money. Average weekly earnings were only £20, equivalent to £17,370 today. Although wages eventually increased, job security declined sharply, particularly in sectors affected by deindustrialization and global economic shifts. The period from the 1970s through the 1980s marked a turning point for many boomers. While some found stability in service industries, others faced prolonged periods of uncertainty. The early 1980s recession proved particularly damaging, with unemployment reaching 11.9 percent in 1984. These developments underscored the complex and uneven nature of the boomers’ economic journey, challenging simplistic narratives about their prosperity. As the debate continues, the focus remains on how historical context and policy decisions influenced the experiences of each generation. The discussion highlights the importance of considering both opportunity and adversity when evaluating generational differences in economic outcomes.