Britain’s youth is one of the most pessimistic regarding their future prospects amongst advanced economies. The Intergenerational Commission report found that only 22 per cent of adults aged 16+ felt that today’s youth will have a better life than their parents, or the same.
Although intergenerational inequality had been building in the UK before the financial crash, the economic crisis exasperated the wealth gap between older and younger people, bringing the debate to the forefront. Pertinently, the 2017 General Election was the first nationwide vote where the issue was debated.
The report suggests that pessimism is highest in the UK compared to other advanced economies because of the economic success previous generations have experienced.
‘The UK stands out as one of a small number of countries in which large generational income gains for today’s older generations when they were younger have been replaced by a lack of progress for today’s younger generation’.
Throughout the second half of the twentieth century, each successive generation had significantly higher incomes than their predecessors at the same age. Generation X and millennials have not experienced this.
In comparison, the USA and Germany are far more optimistic than the UK, with 39 per cent of all adults aged 16+ in the USA and 32 per cent in Germany, believing that today’s youth will be better off than them. This is because in the USA and Germany expectations of generation-on-generation increases in wealth are far smaller; as a result of such ‘increases being minimal or non-existent for a long time’, there is evidence that this economic weakness ‘pre-dated the financial crisis’.
The report states that although the effects of the financial crisis cannot be overstated, with real earning wage decreases for all working age cohorts in the UK and Greece severely hit by the financial crisis — between 2006 and 2014 — there is nevertheless evidence that the economic weaknesses influencing younger generations’ lack of prosperity, pre-dated the financial crisis. This suggests that there is an institutional problem within the economy.
It is for this reason that all politicians can be blamed for the situation younger generations find themselves in.
In the UK, the post-war baby boom and increases in life expectancy have acted together to bring about a large ageing population. The problems that this brings, are both inevitable and easy to see, and yet there was no comprehensive plan. Instead, successive governments have patched over cracks in the health and social care system with temporary fixes, aware of the subtle yet protective bond that exists between the electorate and the NHS. Nigel Lawson, ex-Chancellor, said that the NHS is the ‘closest thing England has to a national religion’.
However, the clock is now beginning to catch up and the plasters are peeling off. The Health and Social Care system currently resembles a balloon that is nearing the point of explosion. For successive governments their hope has been that it wont go pop on their watch.
It is rational to argue that greater focus should be applied to the greatest proportion of people; as the report states, ‘the ratio of workers to non-workers is now rising’.
However, that does not mean the economic plight of the younger generations can be ignored. This neglect by politicians is cynically down to differing sizes in the electorate. The report explains the age turnout gap has been exasperated by ‘the smaller size of the millennial generation, combined with the ‘youth turnout gap’. Although, the 2017 election had a higher youth turnout, the gap between 65+ voting and 18-24 voting is still substantial enough to result in governments being determined to prioritise the grey vote.
The EU referendum delivered a reset to the British political system, as parties ignored their base votes. After the 2017 election, politicians are beginning to realise the political landscape must transform in order to match the changing electorate, with cooperation happening across party lines. As the political system has an opportunity for restructuring so does the economy. The economic problems that blight the optimism of Britain’s youth need conciliatory and rational thinking; something which the current febrile political atmosphere doesn’t allow. Constitutionally, MPs sit to represent their electorate. This raises the complex question of whether it is better for politicians to seek politically unpopular fixes to such structural problems, or implement short-term fixes that will please voters today but lose them tomorrow when the plasters inevitably peel off.
The intergenerational commission also details key areas where solutions must be found.
Firstly, in its failing to address the pre-crisis lack of job mobility, the UK has allowed the financial crisis to only exasperate the lack of job-to-job moves, ‘acting as a continued drag on pay growth for younger workers in the UK’.
The UK’s rate of job mobility has not recovered as well as other countries, including America, since the financial crisis. There is ‘clear evidence of pre-crisis structural declines in mobility’. This is important because it is a key mechanism by which workers secure ‘big pay rises, particularly when young’.
Another problem the report outlines is that in the UK, and other northern European countries, there is evidence of a ‘structural rise in part-time work particularly among young men’. One theory behind this rise is that more men are choosing to work part-time; perhaps because of a changing role within families. However, the report rejects this, at least in the UK, explaining that the increases are ‘involuntary and associated with low pay’.
It can be argued that what is happening is the beginning of a structural change in the economy, heavily affecting younger people. There are significant increases in the sector of the gig economy, for example. However, as the Government seeks to regulate this emerging sector and its inherent insecurity becomes clearer, the future lies in technology and innovation.
The report finds that ‘educational gains, measured in the terms of the percentage increase in the proportion of each cohort with a tertiary-level qualification, have slowed in almost all advanced economies’. When you compare this to the 1960s and 1970s one may gasp with shock, seeing that in the ’60s and ’70s the level of tertiary qualifications was higher in the UK than anywhere else.
As we leave the EU, because of its multiple regulations and alleged cumbersome bureaucracy, Britain has a chance to lead in the technological revolution. What is needed for this to be achieved is a greater focus on vocational skills and T-levels.
Away from the negativity, there are significant reasons for younger generations in the UK to be more optimistic. For example, youth unemployment has returned to similar levels experienced in the early 2000s; whereas, in Greece it is at 40.8 per cent. Although an international labour supply is helping to stifle wage growth, something felt by all working people, there is cause for joy that the UK has a youth unemployment rate lower than the EU average.
Finally, housing is a reflection of the expectations that are fuelling youth pessimism. The report enunciates that:
‘generational falls in home ownership rates have been larger in the UK than in other countries where housing was citied as a top concern’.
In British culture, owning a house is far more important; compared to Germany, where more people rent homes. It would be naive to suggest that a cultural change is likely, where people turn towards the German method. However, the shortage of affordable homes may force people into this situation, evident from the latest record low in UK home ownership figures at 63.4 per cent — not that distant from the 51.7 per cent rate in Germany.
Nevertheless, the UK’s youth should not be downbeat. Throughout the report, the authors compared millennials and Generation X to baby boomers. In this spirit, huge pride can be felt towards the increase in equal rights for the LGBT+ Community, the rise in women’s equality and advances in the representation of minority groups.
The pessimism of the UK’s youth is reflective of the majority of the electorate. There is a shared sentiment of neglect and a fearful lack of hope. It is this emotional abjectivity that has fuelled the revolt against the ruling establishment by the working classes and young people, both in the EU referendum and in last June’s general election. Currently, each group runs parallel to the other, sharing similar emotions. And yet, politicians are unsuccessful in merging the two tracks. Corbyn and Momentum hold the majority of the young, and the Conservatives are slowly becoming more appealing to the working classes — something that’s likely to rise with a successful Brexit. The party that can merge these two tracks will secure an insurmountable base. If neither do, the inevitable destination is an explosion of the political system, fuelled by a desultory attitude towards restructuring the economy.