Who Will Foot Economic Costs of Coronavirus Pandemic?


源 稿 窗
字号 +
字号 -
Many of Europe's young have rallied to the call to practice social distancing and observe lockdowns, determined to do their bit to protect the "baby boomer" elderly and those more vulnerable to the coronavirus.

But there is also growing worry and anger among the young, who fear their careers will be derailed and economic prospects wrecked as the result of the pandemic, say public policy experts.

The result could be a stoking of generational conflict, which could have major political ramifications, experts say.

Some of the young have bristled at lockdowns, and as the restrictions were imposed around the world, rebellious youngsters disobeyed the rules on social distancing.

That earned the ire of scientists and public health officials, who condemned "lockdown parties" and "end of world" drinking sessions as socially irresponsible.

Some of the young attending "corona speakeasies" described aggressively the pandemic as an opportunity for "boomer removal."

According to British academics Alan Collins and Adam Cox, coronavirus rebellions were fueled not only by youthful spirits but also "by long, simmering resentment among the young of perceived widespread boomer entitlements, such as easier access to property ownership, secure pensions and affluent retirement."

With the continent heading into its worst economic downturn since the 1930s, the economic and job prospects are dimming for millennials and Generation Z in Europe. They are likely to "face lifelong penalties," as they experience increasing difficulties finding and keeping jobs, according to Nick Hillman, director of the Higher Education Policy Institute, a nonpartisan research group in Britain.

That will only aggravate millennial frustration, say public policy experts, as well as millennials themselves, which could reshape European politics.

"My friends and I feel exasperated about the continued crises hitting our generation - the 2008 financial crisis, the Hunger-Game like chase for jobs, houses, security and resources. The looming fear of climate change catastrophe, and the severe economic and social impact that will come if nothing substantially changes," said Joanna George, a millennial commentator.

Writing in The Times newspaper, she added, "The economic and social consequences of the coronavirus are becoming increasingly clear for everyone, but particularly for millennials and Generation Z who will live for decades with this new economic burden weighing heavily on their already economically precarious shoulders."

The young were struck hard by the 2008 financial crash. Workers in their 20s and 30s in Britain suffered the worst depletion of wages of any employed age group. With house-price inflation, they were locked out of the property market, stumbling as they tried to get a foot on the homeowning ladder. The economic impact of the coronavirus is likely to be worse and longer lasting.

Last week, Chancellor of the Exchequer Rishi Sunak warned at video press conference, "This is going to be hard. Our economy is going to take a significant hit."

Budget forecasters predict Britain's economy could shrink by 13% this year due to the government's coronavirus shutdown, its deepest recession in three centuries. Public borrowing is set to surge to a post-World War II high.

Across the continent, the prospects for a quick post-coronavirus economic recovery appear slim. Europe is likely to experience a severer recession than the rest of the world, European Central Bank Vice President Luis de Guindos told Spain's La Vanguardia newspaper.

Even before the coronavirus struck, youth unemployment in the euro zone was high. For the past decade or so, it has been stuck stubbornly at 19% to 25%. In Spain, Greece and Italy, it has been even higher, at around 40%.

Even youngsters who are officially employed have found themselves careening from one short-term, dead-end job to another or working part-time with just enough hours not to be counted as jobless. Those in their 20s and 30s were already worse off than their parents were at their age before the pandemic.

The continent's endemic unemployment has been credited by many political scientists as a significant factor in the rise of both right-wing and left-wing populism, which in some European countries has upended the political establishment.

For youngsters who remain employed or have found jobs, much of the burden will fall on them to repay the debts racked up by governments to manage the health emergency and the immediate economic impact of the pandemic.

Already, there is debate about how the burden can be reduced on the young and placed more on the shoulders of older generations who have benefited from house-price inflation and whose state pensions in most European countries were shielded after the 2008 crash and increased in line with inflation.

In Britain, the Social Market Foundation, a London-based public policy research group, has asked that the huge economic cost of the emergency measures "be shared fairly between old and young in the years ahead."

In a briefing paper published last week, the foundation said, "Any future austerity program must not favor pension spending over working-age welfare, as happened after the financial crisis" in 2008. On taxes, it urged for higher taxes on wealth and land.

"The economic impact of lockdown policies is falling most heavily on working-age Britons, many of whom face redundancy followed by years of higher taxes, reduced services and slow economic growth," said Scott Corfe, the foundation's research director. "Quite rightly, society is making sacrifices to protect its elderly right now. There is a clear case for intergenerational reciprocation when it comes to meeting the fiscal costs of the crisis in the years ahead."