Intergenerational politics

There have been a number of articles recently about the increasing wealth disparity that exists between the baby boomer generation and subsequent generations. These take several forms:

• The ABC had an article about the rapid accumulation of wealth in older Australians versus declining wealth in younger generations. LINK
• This (slightly hyperbolic) ABC article was written about a Grattan report - LINK
• Another article defended the record of baby boomers. LINK
• Yet another article recounted a very personal debate about the vices of the baby boomers. LINK

I think that we need to step back from this. The risk in these kinds of articles is that we establish an intergenerational schism. People get defensive, or aggressive.


So, prior to any analysis I think I should observe that:

• Cultural differences between baby boomers and subsequent generations are very minor (much less than between the boomers and earlier generations). At the individual level, we are no different and would have likely made the same choices (in aggregate) had we been in the same situation. (ie. while I think there is plenty to criticise in what the boomers have done, I think my generation will fare no better)
• In any population or demographic analysis such as this, we are always talking about a distribution. There are many poor baby boomers, and many rich Millennials.
• It is utterly useless to attribute blame anyway

Data

From what I have seen, the Grattan report seems pretty good. It is not inflammatory (unlike some of the others), and is based on data. The most compelling data are shown in this figure:

Data showing welfare receipt in Australia by age. Source: Grattan

My view is that these data are unequivocal. There is a net transfer of wealth from young and relatively poorer Australians to older richer Australians. The critical thing to notice is the large increase in the right-most bar in the 65+ bracket. Also, the right-most two bars of the 25-34 bracket. 

From reading comments on a couple of online sites, there appears to be a lot of misunderstanding what this report is saying and what it means.

This report is not comparing baby boomers in their 30s against today's 30 year-olds.

Instead, it is looking at demographic changes that have occurred in Australia in the last 8 years. What they have found is that, in those 8 years, older Australians have got substantially richer, while younger Australians have become poorer [1]. Let's keep things simple: people who were in the 25 - 35 age group 8 years ago are now in the 35 - 45 age group. I don't think we can attribute these changes in wealth to big differences between these age groups. In other words, I don't think there are large differences between today's 30 year olds and today's 40 year olds in terms of frugality, sense-of-entitlement, work-ethic, etc. I don't think such differences can account for these systemic shifts. 

These are statistics that have been calculated across the entire population. They are not about individuals. This report highlights systemic problems that urgently need to be addressed. You do not want to be living in a country with a poor and disenfranchised youth -- see Libya, Egypt, Iran for what happens. 

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[1] In other words, comments like "Well, I was poor when I was young too" do not apply, as what we are looking at here are rapid changes in the relative levels of wealth between different age groups.

ebike

I often read articles about the bright future of electric cars. Here are a few.

The economics of electric vehicles

Part of the reason for moving to electric vehicles is the increasing difficulty of sustaining our oil consumption [1].The problem is that to replace the existing vehicle fleet with new electric vehicles will, I think, be prohibitively expensive. Consider that in Australia a petrol car can be bought for less than $1000, whereas the cheapest electric vehicle is more like $45000.

Because of this, I think that in general electric cars will be for rich people only, even in developed countries, and that middle-income and lower people will not own a car at all.

The electric-vehicle you will use will probably be an ebike. Consider this table:

	ebike	electric car
initial cost	$500 - $4000	$40000 - $100000
insurance	$0	$600
registration	$0	$700
range	50 km	160 km
carrying capacity	1 - 3 people	4 - 5 people
energy to recharge	0.3 - 0.5 kWh	10 - 20 kWh
battery replacement cost	$500 - $800	$15000
top speed	30 km/h	150 km/h

Clearly, cars and bikes are very different vehicles and there are many things cars can do that bikes can't. This is irrelevant, though, if the cost of the car is out of reach of many people -- as it is. I bet that this won't change either.

Using an ebike

My family's ebike was build from an old mountain bike, and a retrofit kit that I bought from gloworm bicycles [2]. I installed it myself, though mechanically challenged people could get it installed at a bicycle shop, or buy a complete ebike off-the-shelf. This kit was $1500 -- there are much cheaper kits available (starting form about $400) but we wanted a quality kit that would last.

There are a few scenarios when we use the ebike:

• we're ill, and not up to riding our other pushbikes
• we're going a long way or up a big hill, and taking the kids or other cargo (say, 30 kg) in the bike trailer 
• we're coming home last at night, and know we won't feel like cycling
• just feeling lazy that day

If we didn't have the ebike, these are all scenarios where we would drive instead of cycle, so having the ebike has meant that we drive a lot less.

Performance

The performance of the ebike is amazing. Much better than I thought. It has a 200 W motor, which doubles the power of a reasonably fit cyclist. A couple of things I have done with the ebike that I would never have imagined:

• took the two kids, lots of food/water, bike locks, trailer, etc up a steep 400m climb to go bushwalking (overtaking lycra-clad road-bikers on the way)
• accelerated myself up to about 30 km/h without pedaling at all
• Visited the hardware store and bought up, used the trailer to get it home

The power and range of this unit has exceeded my expectations. It has a nominal range of about 50 km, though after three years' heavy use its range is about 1/2 that -- and less if I'm using the motor heavily (ie. the above examples).

Conclusion

If you would like to cycle, but think you lack the fitness, or if you already cycle, but would like to decrease your dependence on your car, an ebike could be a good option.

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[1] The capital expenditure of oil majors is soaring, while their production is flat or decreasing
[2] I have no affiliation of any kind with glo-worm bikes -- I'm just a happy customer