Europe's New Young Generation of Losers

It's election time in France, and the promises are flowing fast. If you believe the candidates, young voters are in line for a fat slice of state largesse, no matter who wins the vote. On offer from Nicolas Sarkozy, the right's presidential candidate: interest-free loans for young entrepreneurs and a €300-a-month allowance for training. Not to be outbid, his rival, meanwhile, the Socialists' Ségolène Royal, has pledged more housing, €10,000 loans and guaranteed jobs or training after six months of unemployment. As Royal told a party rally last week: "As a mother, I want for all children born and raised in France what I wanted for my own children."

They now seem unlikely to get it. Young adults in France, like their contemporaries across Europe, face a slew of problems never experienced by their middle-aged leaders. Consider: a 30-year-old Frenchman earned 15 percent less than a 50-year-old in 1975; now he earns 40 percent less. Over the same period, the number of graduates unemployed two years after college has risen from 6 percent to 25 percent, even if they typically have better degrees. Thirty-year-olds in 2001 were saving 9 percent of their incomes, down from 18 percent just six years before. Young people who snag stable jobs, gain access to credit and buy homes later in life are particularly angry that the older generations continue to rack up public debts for which they will get the bill. And they are very skeptical of the pledges of boomer-generation politicians. "If all this were financially possible, it would have been done long ago," says Clément Pitton, the 23-year-old leader of Impulsion Concorde, which recently circulated a petition declaring "We will not pay your debt."

Pitton's sentiments are increasingly shared by the children of Europe's baby boomers, a generation sometimes called the baby losers. Not only will they be forced to pick up the tab for a welfare system that offers far more to the elderly than to the young, but they will be forced to do so with less: Europe's economy remains skewed in favor of the old and its politicians have been shy about pushing painful reforms that might correct the balance. No wonder one recent poll in France showed that only 5 percent believed young people had a better chance of succeeding than their parents. Europe, it seems, is increasingly split—not along class or racial lines, but between its young and its old.

As the rift grows so does awareness. Just browse the media or visit the bookstores. In France, the shelves groan with works bemoaning the "Génération Précaire"—the Precarious Generation. Two boomer authors warned in a book released this December, "Our Children Will Hate Us." In Britain, think tanks turn out reports on "Maggie's Children"—the unfortunates born in the affluent Thatcher years—or the IPOD Generation: the newcomers to the job market who find themselves "Insecure, Pressured, Overtaxed and Debt-Ridden."

Small wonder Europe's young are losing faith in their leaders. In a recent report for the Policy Exchange think tank, David Willetts, the Conservative Party's education spokesman, concluded, "A young person could be forgiven for thinking [there's] a conspiracy by the middle-aged against the young." There may not be any concerted plot, but it's clear who's to blame for today's sorry situation: the boomers. The sunlit decades of postwar prosperity saw the creation of generous welfare states across Europe. Dynamic economies assured the boomers secure employment (Germans still like to speak of "job owners") and hefty pensions on retirement. But this good fortune came at a price. The same labor rules that protect the jobs of the middle-aged shut out the young. And dwindling birthrates mean there will soon be fewer workers to support the retirees.

So will the boomers renounce—or at least share—their benefits? Unlikely, says leading French sociologist Louis Chauvel. "The baby boomers didn't [intend] to do this to young people, but I don't see a willingness to get them out of the situation either." Such intransigence looks even more unfair given the disparities in wealth and lifestyle. The boomers are living it up; many have used their generous pensions to opt out of the labor market altogether. Only 30 percent of Belgians older than 55 still work, for example. A report by the London-based think tank Reform put the issue plainly. "People over 50 are developing the lifestyles of teenagers."

As they slack off, their children's woes are multiplying. Germans now talk of "Generation Intern" as well-educated graduates increasingly accept unpaid jobs in the quest for elusive permanent posts. Such challenges breed despair. Ask Daniel Knapp. Born in Germany, he speaks four languages fluently and holds a master's degree from the London School of Economics. But he's spent the last six months chasing jobs in London, Berlin and Brussels —unsuccessfully. "I feel as if I'm simply draining my family's resources. It seems my degrees only qualify me for further education but not really a job."

Some countries have so far avoided the malaise. In Ireland, the birthrate peaked late and the strong economy still provides jobs for all. In fact, "this is the first generation to have grown up in Ireland with no question that they would be able to find a job in the country," says Tony Fahey of the Economic and Social Research Institute in Dublin. Ditto for Spain, where everyone is enjoying the new prosperity and a welfare system vastly expanded since the end of the Franco regime. "[The young here] don't live worse than their parents; in fact they live much better," says Federico Steinberg, an economist at the Autonomous University of Madrid.

But even the happy Irish and Spanish share a housing problem. Across the continent, spiraling property prices and poor job prospects are conspiring to keep youngsters living at home. According to the Italian Institute of Social Medicine, 45 percent of the country's 30- to 34-year-olds still sleep in their old beds and enjoy Mama's home cooking. In France, the proportion of 24-year-olds now living with their parents has almost doubled since 1975, to 65 percent. Even in the U.K., with its enviable record of job creation, the average age of the first-time home buyer has climbed from 26 in 1976 to 34 today. Property prices are now eight times higher than the median earnings of the ordinary twentysomething.

This great homecoming—by what the press in Britain has dubbed the "Boomerang Generation"—points to one more troubling shift. Lacking well-paid jobs, the young have been thrown back on the generosity of their parents. That's fine for the middle class, but much worse for the poor. "Progress was once produced by the state; now it comes from family solidarity," says 28-year-old Aurore Wanlin of London's Centre for European Reform. But don't look to the politicians for action. Sure, pension reform is close to the top of most national agendas. Last week the Italian Prime Minister Romano Prodi declared, "Italy should feel a moral duty to ... prevent an entire generation from facing life without certainties."

But money for the young will have to come from somewhere, and tinkering with boomers' privileges presents a tricky political challenge. After all, their numbers are increasing and so is their clout. They're overrepresented in government: the average age of the British M.P. is now over 50, up two years since Labour came to power in 1997, and in 2002, only 15 percent of the members in France's lower house of Parliament was under 45. Boomers are also better organized. And, says John Curtice of the University of Strathclyde in Scotland, "Older people are a popular cause and are generally regarded as a deserving group."

Ironically, Europe's young don't seem to favor cutting their parents' benefits; they want the same treatment. Last year French youths mobbed the streets to protest a new bill that aimed to create more employment but offered less security; the proposal was defeated. Says Wanlin: "Their aspiration is to get the same protection for themselves." If the economics don't work out, that's a problem for the politicians—not the young. Indeed, even some boomers recognize the flaws in the status quo. "The worst thing," says French author and former political advisor Bernard Spitz, "would be if we lived contentedly with our debts and our early retirements, telling ourselves the young will pay, just like we told ourselves 'Germany will pay' after the Treaty of Versailles." As Europe has learned before, a bad peace only leads to more war—even between generations.

With Jacopo Barigazzi in Milan and Kenzie Burchell in London