Europe's Widening Generational Wealth Chasm: Young Earners Face Stark Disadvantage

Student protests, initially sparked in France in September, have now resonated across more than 11 European nations. This wave of unrest is fueled by growing discontent over escalating rents, soaring fuel prices, and reductions in public services. A significant sentiment among young protesters is the diminishing expectation of surpassing their parents' financial standing, a concern substantiated by recent household wealth data revealing a profound intergenerational disparity.

According to the European Central Bank’s (ECB’s) 2023 Household Finance and Consumption Survey, households led by individuals under 35 in the eurozone and two additional European countries possess a median net wealth of approximately 25,000 euros ($27,870). In stark contrast, households headed by individuals aged 55 to 64 command a median net wealth of around 208,000 euros ($231,882), more than eight times the amount held by younger generations.

This visual explainer by Al Jazeera delves into the wealth distribution across various age groups in 22 European countries, examining the significant increase in the cost of living since the year 2000.

Where is the Wealth Gap Widest?

The Household Finance and Consumption Survey, a collaborative effort by the ECB and national central banks since 2010, monitors household wealth and debt within the eurozone, the Czech Republic, and Hungary. Net wealth, encompassing assets like property, vehicles, savings, and valuables, minus liabilities, is the key metric used.

Across the 22 surveyed countries, individuals under 35 collectively hold a mere 2.8 percent of all household wealth. Conversely, those aged 55 to 64 possess the largest share, accounting for 24 percent.

Finland exhibits the most pronounced disparity, with individuals under 35 holding only 0.8 percent of household wealth, the lowest proportion recorded. In contrast, those over 55 hold over 71 percent. Other countries with notably small wealth shares for the under-35 demographic include Ireland (1.4 percent), Austria (1.6 percent), Greece (1.8 percent), and Germany (2 percent).

Evelyn Astor of the European Social Observatory commented to Al Jazeera’s Counting the Cost programme, stating, “What we’ve seen is actually a very strong increase in housing prices both in terms of the rental market as well as the ownership market. All of this is also reinforcing a sense of inequality because ultimately ordinary families are struggling to pay their rents or be able to purchase their homes whereas wealthy people with capital are able to make rather significant investments in the European housing market.”

Rising housing costs are a significant factor preventing many young individuals from achieving the homeownership or financial stability their predecessors could. Wealth distribution appears more equitable in Central and Eastern European nations. For instance, in Lithuania, the under-35 demographic holds 13.2 percent of household wealth, compared to 15.9 percent for the 55- to 64-year-old group. Similar trends are observed in Croatia (12.3 percent), Slovakia (10.1 percent), and Estonia (9.8 percent). Malta stands out as an exception outside these regions, with the under-35s holding 11.1 percent.

How Much More Expensive Is Life Than in 2000?

The prices of essential goods and services, including food, energy, transportation, and household expenses, have surged by 67.2 percent across the eurozone, Hungary, and the Czech Republic since 2000. Hungary has experienced the most dramatic price increases among the countries analyzed, with costs more than tripling, according to Eurostat, the European Union’s statistics agency. Eurostat's harmonised index of consumer prices serves as the official EU measure for the cost of everyday goods and services.

Eastern European countries have witnessed the most substantial price hikes, particularly since the commencement of Russia's full-scale invasion of Ukraine in 2022. This surge is largely attributed to their significant reliance on Russian energy supplies. Prior to 2022, annual inflation averaged around 2 percent, but it escalated to 9.2 percent in the EU that year, primarily driven by energy costs. While inflation has since moderated, the price increases stemming from the COVID-19 pandemic and the war in Ukraine remain largely unreversed.