Thu, May 15, 2008 page9

• Europe's generation less

  The baby boomers have given way to the 'baby losers' in Spain, France and Italy as a new generation accustoms itself to being poorer than its parents

  • By Graham Keeley, Jason Burke and Tom Kington / THE OBSERVER
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  The kids learning to swim at the pool near Via Casilina, in a working class suburb of Rome, could not ask for better qualified instructors. One is a literature graduate with a masters in communications from Brussels, while another, Antonio di Martino, is an aerospace engineer.

  Di Martino, 30, still has to finish his degree, but with a one-year-old baby and another child on the way, and afternoons and evenings working at the pool to bring in 1,100 euros (US$1,695) a month, something had to give.

  “Some of the pressure to graduate also slipped away when I saw one friend get his degree and then only earn 500 euros a month at an Italian space firm and another get 800 euros a month at the European Space Agency,” said Di Martino, bouncing his son on his knee as his partner, Mattia, rushes out the door to her teaching job, which pays 1,200 euros a month.

  

  ILLUSTRATION: MOUNTAIN PEOPLE

  “My parents bought me my flat, making me one of the lucky ones since prices are crazy and I would never get a mortgage,” he said. “I spent two years of savings on doing up the bathroom and now I worry about my son. One problem, one unforeseen expense and things get serious.”

  He said price checking in supermarkets was the norm — “something my mother never did.” And the family thinks hard before traveling.

  “With petrol and tolls, even a trip to my parents in southern Italy now costs 100 euros,” he said.

  Di Martino is part of a new phenomenon sweeping Europe. As he spoke, Africa Garcia Arias, 32, was nearing the end of a 45-hour week in a busy Madrid hospital. Six months pregnant, Arias will scale back her working week in the coming month. Although she is exhausted, this is hardly much relief. Her salary of 1,600 euros will drop to 1,000 euros a month.

  Last Friday night, Lorenzo, 35, was on a train heading to work a night shift at the Berlin branch of a major US sales Web site. He trained as a historian and a photographer.

  “The pay is just about OK — 2,700 euros a month for a 40-hour week — but it is hardly the job I dreamed of doing,” he said.

  And in Paris, Nathalie, 24, was sitting in a friend’s tiny rented flat in the rundown 20th arrondissement, the poorest district of the city, having finished another month of unpaid “work experience” for a major publishing company. Tomorrow she will be at the second home of her parents in Brittany to sit in the sun in the garden, read and swim.

  “I look at how they live, and how they lived when they were my age or a few years older, and I realize that I will never have any of that,” she said. “I am not sure whether to be angry, sad or simply resigned.”

  With inflation soaring, property prices sky high, wages relatively static, labor markets gridlocked and sluggish or slowing economies, Nathalie, Lorenzo, Arias and Di Martino are among tens of millions of Europeans raised to expect that their degrees and diplomas will ensure a relatively high quality of life, but who are now realizing that the world has changed. The disappointment is a shock with big political, social, cultural and even demographic consequences.

  “I am angry. I know a lot of people who are in the same situation and our qualifications are not being rewarded,” Arias said.

  For Nathalie, the weekend in her parents’ seaside home will leave “a bitter taste in my mouth.”

  In Spain they are known from their pay as the mileuristas (thousand euro-ers). In France they are the “babylosers” — a term coined by sociologist Louis Chauvel to contrast them with “babyboomers.” According to Chauvel, 41, a sociologist at the National Foundation for Political Science, for the first time in recent history a generation of French citizens aged between 20 and 40 can expect a lower standard of living than the one before.

  “Mileuristas or babylosers: it’s the same story,” he said. “They have an average of three years’ more education than their parents, a worse job and a lower standard of living.”

  Chauvel quotes hosts of statistics. In 1973, only 6 percent of recent university leavers in France were unemployed; now the rate is 25 percent to 30 percent. Salaries have stagnated for 20 years while property prices have doubled or trebled, though the overall proportion of French people living in poverty has not changed. Whereas in the 1960s the poor were mainly the old, now they are the young: In 1970, salaries for 50-year-olds were only 15 percent higher than those for workers of 30; the gap now is 40 percent.

  “Some talk of a war between the generations, but that’s a little simplistic. It is more that the system means that the haves are keeping what they have and no one is helping the have-nots,” Chauvel said. “The big determinant in France now of success is not your educational level but the wealth of your parents, if they can support you during your 20s as you fight your way into a closed employment market.”

  French economists speak of “insiders and outsiders.” The insiders are those who already have a job and are well-defended by the battery of French laws protecting the workforce and the unions. The outsiders are those without work, which naturally include newcomers on the job market. Chauvel says the problem is particularly bad in Latin countries where parents are expected to support their children much longer.

  In Spain, even during the boom years when Spanish growth outstripped the rest of the EU, the mileuristas found themselves unable to afford their own homes. But now with the Spanish economy crashing, prospects are grim.

  In the first three months of this year, Spanish unemployment hit 9.6 percent, the highest for three years and second only to Slovakia in the 27-nation EU.

  Once one of Europe’s success stories, Spain’s Socialist government has been forced to cut its growth estimate for the year to 2.3 percent from 3.1 percent. Josep Comajuncosa, a macroeconomics specialist at the Esade business school in Barcelona, said the downturn may help the mileuristas buy homes, but it will not solve their basic problem.

  “What is needed is a model of growth based on greater productivity and new industries primarily service-based like IT, financial services and new technology which can raise salaries,” he said.

  In an effort to save Spain from the worst effects of the downturn, the government has announced an ambitious public works program, including a massive social housing plan that could help many to finally buy property. Such policies are likely to become increasingly common.

  In Germany, according to a report published by consultancy McKinsey, those earning between 70 percent and 150 percent of the average income — the standard definition of the middle class — will make up less than half the population by 2020, against 54 percent today.

  Only eight years ago, 62 percent of Germans were in the middle-class bracket, according to a second study. Key markers of middle class status — such as overseas holidays — are disappearing or becoming blurred.

  “I haven’t been away for two years,” said Aurel Thurn, 38, who works for an art gallery in Berlin and has top-level qualifications, 10 years of experience and speaks four languages fluently. “I have enough money for my rent, my telephone and food. But that’s it.”

  Many feel that Germany’s middle class has not benefited from the nation’s recent economic recovery. The result has been political pressure, with mounting trade union activism and a wave of industrial action aimed at securing higher wages and enhanced social security benefits as well as lower taxes for average earners and higher taxes on the rich. Germany’s political parties have reacted by boosting public spending and are considering wide tax cuts.

  “There is a political swing towards what were once considered the ideas of the political left such as minimum wages, benefits and so on,” said Holgar Schaefer, a labor economist at the Cologne Institute of Economics. “It is a tendency that is only likely to become more obvious in coming years.”

  The same thing is happening elsewhere. In France, there has been a mass mobilization of teachers and pupils against plans to slash staffing levels.

  “It is completely unprecedented,” author and journalist Ariane Chemin said.

  “There is a potentially explosive combination of political disillusion with a fascination for politics. Young people are both deeply cynical and deeply politicized. They are at the school gates calling teachers who work ‘scabs.’ We haven’t seen anything like it for years,” he said.

  But it may be that instead of the demise of the European class, we are merely witnessing its evolution.

  Daniel Gros, of the Centre for European Policy Studies in Brussels, said the middle classes across Europe are “splintering.”

  “The homogeneous middle class that you once had based on industry and a protected government sector is disappearing,” he said.

  The political and social consequences are already visible. The success of French President Nicolas Sarkozy is one, according to Gros.

  “The old massive blocs of Gaullist right and Socialist left based on clear understandings of what it is to be working class and socialist have broken down,” he said. “Sarkozy’s appeal cut across those classic divisions.”

  Analysts also point out that the “hardship” of the middle classes is very relative — according to the European Commission, there are an estimated 16 million people in the EU at risk of poverty.

  “The decline in standards of living for young middle-class people is pretty moderate when compared with the very dramatic situation of their counterparts in totally marginalized communities such as the poor French suburbs,” said Ian Begg of the London School of Economics.

  “And it is an extremely varied picture. New service sector jobs can be low grade and badly paid — such as night shifts for an IT company — or very lucrative. Collectively, Europe is richer than it has ever been. Average income has been going up pretty well without a blip since 1945 and, whatever the disparities, some of that has filtered down to pretty much everybody,” he said.

  Begg pointed out that with economic and social changes a certain amount of “blurring” was inevitable

  “There is a trend towards a certain classlessness and some win and some lose. Jobs that were previously passports to stable middle-class incomes and wealth no longer are. And those who lose out most tend to shout loudest,” he said.
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