Two major events in recent memory have contributed to the sense that the current generation of young people have had their life chances stolen from them.
The first is the credit crunch and associated financial crisis of 2008, the consequences of which, even now, have yet to be appreciated. When young couples have their application for an affordable mortgage rejected by their bank, the seeds of that decision all too often seem to trace back to the collapse of Lehman Brothers in the United States and the subsequent exposure of the appalling mismanagement of their own organisations by bankers across the world.
The second cause of grief for the living standards and aspirations of the current generation is, of course, the Covid pandemic. Social historians of the future will have their work cut out for them as they seek to reconcile the enthusiasm with which the public demanded the shut down of the economy and the previously unimaginable scale of state support to be paid out to employees for work not done, and the subsequent outrage at the fall in productivity and anaemic wage growth that followed, as if the two factors were entirely unconnected.
Whatever the causes of the current discontent, the despair of Generation Z at the throttling of their aspirations is a palpable political reality, and one with which current and future governments must deal. Young workers face the prospect of not being able to buy their own homes until well into their thirties, or even forties, unless they can rely upon generous handouts from wealthy parents, further institutionalising the disparity between this country’s haves and have-nots. With growth in rents set to outstrip wages for the next three years, the issue will only become more salient.
But the answers to this dilemma from those directly affected fall far short of economic reality. Of course higher wages for less work would suit many; when has such a prospect not been popular? But as the pandemic proved in painful detail, such solutions, while having a short-term attraction, can only store up massive – perhaps insurmountable – problems for the future.
Even the civil service, the backbone of the British establishment, is responding to the long-term economic impact of lockdown by demanding the same pay for 20 per cent fewer hours worked – an indication, were cynical ministers to exploit the claim, that the service is significantly over-staffed with far more employees than the workload might justify.
Unless some top secret economic theory has been unearthed that turns financial orthodoxy on its head and promises extra productivity in exchange for less work and higher, unaffordable wages, the only apparent solution to the current crisis facing people in their twenties seems to me to be for the economy to grow at a far faster rate than has occurred in the last decade, for consumer demand to mirror that growth and for lending institutions to begin to take risks on mortgages.
It might be remembered that the current expectation of home ownership after securing your first job was not a reality for many when the current generation of boomers and Generation X were children. The vast expansion of private home ownership and associated prosperity of the ’80s and ’90s did not come about because of workers’ rights, but because of free market economic policies that freed up the jobs and the financial markets.
If solutions to the current challenges exist, they do not exist in repeating the follies of the dim or recent past: 1970s corporatism and economic lockdowns served only to store up misery for the many. As former chancellor Denis Healey once said, when in a hole, stop digging. A generation reared on positive affirmation from their parents, who were authoritatively assured by them that everything they said, did or painted was marvellous, can no longer rely on other people – particularly the older generation – to solve their problems for them. There is no deus ex machina waiting to swoop to their rescue.
Today’s problems are not new; previous generations faced the same dilemmas, and they suffered a long, difficult road on the way to salvation. The chief difference is that too many of the current generation seem to believe they are so special that they can rely on the magnanimity of the state and their employers to come to the rescue.
Two major events in recent memory have contributed to the sense that the current generation of young people have had their life chances stolen from them.
The first is the credit crunch and associated financial crisis of 2008, the consequences of which, even now, have yet to be appreciated. When young couples have their application for an affordable mortgage rejected by their bank, the seeds of that decision all too often seem to trace back to the collapse of Lehman Brothers in the United States and the subsequent exposure of the appalling mismanagement of their own organisations by bankers across the world.
The second cause of grief for the living standards and aspirations of the current generation is, of course, the Covid pandemic. Social historians of the future will have their work cut out for them as they seek to reconcile the enthusiasm with which the public demanded the shut down of the economy and the previously unimaginable scale of state support to be paid out to employees for work not done, and the subsequent outrage at the fall in productivity and anaemic wage growth that followed, as if the two factors were entirely unconnected.
Whatever the causes of the current discontent, the despair of Generation Z at the throttling of their aspirations is a palpable political reality, and one with which current and future governments must deal. Young workers face the prospect of not being able to buy their own homes until well into their thirties, or even forties, unless they can rely upon generous handouts from wealthy parents, further institutionalising the disparity between this country’s haves and have-nots. With growth in rents set to outstrip wages for the next three years, the issue will only become more salient.
But the answers to this dilemma from those directly affected fall far short of economic reality. Of course higher wages for less work would suit many; when has such a prospect not been popular? But as the pandemic proved in painful detail, such solutions, while having a short-term attraction, can only store up massive – perhaps insurmountable – problems for the future.
Even the civil service, the backbone of the British establishment, is responding to the long-term economic impact of lockdown by demanding the same pay for 20 per cent fewer hours worked – an indication, were cynical ministers to exploit the claim, that the service is significantly over-staffed with far more employees than the workload might justify.
Unless some top secret economic theory has been unearthed that turns financial orthodoxy on its head and promises extra productivity in exchange for less work and higher, unaffordable wages, the only apparent solution to the current crisis facing people in their twenties seems to me to be for the economy to grow at a far faster rate than has occurred in the last decade, for consumer demand to mirror that growth and for lending institutions to begin to take risks on mortgages.
It might be remembered that the current expectation of home ownership after securing your first job was not a reality for many when the current generation of boomers and Generation X were children. The vast expansion of private home ownership and associated prosperity of the ’80s and ’90s did not come about because of workers’ rights, but because of free market economic policies that freed up the jobs and the financial markets.
If solutions to the current challenges exist, they do not exist in repeating the follies of the dim or recent past: 1970s corporatism and economic lockdowns served only to store up misery for the many. As former chancellor Denis Healey once said, when in a hole, stop digging. A generation reared on positive affirmation from their parents, who were authoritatively assured by them that everything they said, did or painted was marvellous, can no longer rely on other people – particularly the older generation – to solve their problems for them. There is no deus ex machina waiting to swoop to their rescue.
Today’s problems are not new; previous generations faced the same dilemmas, and they suffered a long, difficult road on the way to salvation. The chief difference is that too many of the current generation seem to believe they are so special that they can rely on the magnanimity of the state and their employers to come to the rescue.
A rude awakening awaits.
Source link
Related News
Zoopla says Scottish homes ‘sell twice as fast as London properties’
Zoopla – Mortgage Strategy
Zoopla – Mortgage Finance Gazette