After the boomers, meet the children dubbed 'baby losers'
Across Spain, France and Italy, young middle-class professionals with good degrees and diplomas are facing a lifetime on low salaries with unrewarding jobs, forever poorer than their parents. Investigation by Graham Keeley in Barcelona, Jason Burke in Paris and Tom Kington in Rome
Graham Keeley
Article history
The Observer, Sunday May 11 2008 Article history
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 (£870) 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 a month at an Italian space firm and another get €800 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 a month. '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 travelling. 'With petrol and tolls, even a trip to my parents in southern Italy now costs €100.'
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. But, though she is exhausted, this is hardly much relief. Her salary of €1,600 will drop to €1,000 a month.
On Friday night, Lorenzo, 35, was on a train heading to work a nightshift for a major American sales website's Berlin branch. He trained as a historian and a photographer. 'The pay is just about OK - €2,700 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 realise 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, labour 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 assure them a relatively high quality of life who are now realising that the world has changed. The disappointment is a shock with big political, social, cultural, 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,' said Arias. For Nathalie, the weekend in her parents' seaside home will leave 'a bitter taste in my mouth'.
Freelance architect Emilio Tinoco Vertiz, 32, earns just €1,000 a month. 'Who needs architects when no one wants to build houses?' he said. In Spain people such as Emilio 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.'
In 1973, only 6 per cent of recent university leavers in France were unemployed; now the rate is 25 to 30 per cent; 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 per cent higher than those for workers of 30; the gap now is 40 per cent.
'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,' said Chauvel. '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 twenties 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 growth outstripped the rest of the European Union, 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 2008, Spanish unemployment hit 9.6 per cent, 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 2008 growth estimate to 2.3 per cent from 3.1 per cent. Josep Comajuncosa, a macro-economics 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 such as 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 programme, including a massive social housing plan that could help many to finally buy property. Such policies are likely to become common.
In Germany, according to a report published by consultancy McKinsey, those earning between 70 and 150 per cent of the average income - the standard definition of the middle class - will make up less than half the population by 2020, against 54 per cent today.
Only eight years ago, 62 per cent 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' 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 trade union activism and a wave of industrial action aimed at securing higher wages and enhanced 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, labour 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 mobilisation of teachers and pupils against plans to slash staffing levels. 'It is completely unprecedented,' said author and journalist Ariane Chemin.
'There is a potentially explosive combination of political disillusion with a fascination for politics. Young people are both deeply cynical and deeply politicised. They are at the school gates calling teachers who work "scabs". We haven't seen anything like it for years.'
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 were '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 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 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 marginalised communities such as the poor French suburbs,' said Professor 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.'
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.'
