Young, gifted but slack

Intergenerational wealth inequality has increased – but how?

The Resolution Foundation’s analysis of the Office of National Statistics’ Wealth and Assets Survey tells a story of wealth accumulating slower for youngsters and piling up for those over 60. It confirms the complaints of millennials that they are being short-changed by society and by their parents.

So what?

What happens when , after many generations succeeding their parents in terms of financial fulfillment, a generation lags? What if this younger generation is born onto a burning planet diseased by pandemics and lacking any coherent sense of purpose, rejects its lot and seeks to reverse matters?

Meaningful protest from people under 20

What can they do?

Let’s face it, millennials are not showing much aptitude for grasping the levers of power. We are not seeing the under forties, let alone the under thirties challenging for power in politics, finance or in religion. They are only influencing to each other, their social media profiles hardly touch older generations. They pose no threat to the current order.

Why are young people so powerless?

Prince Charles may not succeed to the throne till he is in his eighties. We are used to having prime ministers and leaders of opposition in their fifties and sixties. Our CEOs get there as the culmination of their careers. The House of Lords is a retirement club , our bishops and other heads of religion are expected to be over 50.

There is no mechanism for opportunities for the under 50s to arise. We think Liz Truss young, but she is 46 years old, she will be 47 later this month

  • Alexander the Great conquered countries at 18.
  • Augustus Caesar (Octavian) became a Roman Senator at 20.
  • Joan of Arc turned a war around at 17.

It is hard for us to comprehend a society that might allow Greta Thunberg not just speaking on a platform, but owning the platform as a leader of a movement.

And yet Thunberg was 19 in January.

Why are Wealth and power consigned to later age?

I have observed society’s disapproval of young people getting rich and/or powerful quick.

Look at the way musicians such as Kanye West and George the Poet are treated  when aspiring to political office. There is neither opportunity or mechanism for aspiring youngsters to gain admission to our political process. Though they may possess wealth, artists from Kendrick Lamar to Noel Gallagher are tokenised by politicians rather than included in the political process.

Our brightest kids have to go through school, college and then take professional qualifications before they are taken seriously. Parliament is not representing or represented by people under 30. Nadia Whittome MP, who was 23 when first elected is known as “the baby of the house”. I can’t think of many other minorities who would have to put up with such a diminishing epithet.

The fact is that we do not think people “come of age” until they are in their forties and we are letting young talent , energy and vision lie slack. Meanwhile power and wealth stack up at the back end of careers – where it serves no social purpose.

Releasing talent, recycling wealth and restoring young people to positions of power they held in previous centuries is part of building this country back better.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Young, gifted but slack

  1. Stuart Trow says:

    I couldn’t agree more Henry. These economic pressures on the young though have been apparent for many decades, but were thrown into sharp relief by the 2008 financial crisis.

    Globalisation lifted billions out of absolute poverty, mainly in China. However, while a suddenly globalised labour market was transformative for workers’ earnings in Asia, it significantly deflated wages for the young and unskilled in the West. There’s only been one year since the late 1980s where wages at the 25% quartile have exceeded RPI in the UK.

    Even higher earning Western workers suddenly lost pricing power. This was great for suppressing inflation, and facilitated a multi-decade cycle of falling interest rates in an attempt to stimulate investment.

    However, when banks lend money one of two things usually happens. Either it creates a new asset, such as a factory, which creates employment and higher wages and leads to economic growth. Or it simply pushes up the prices of existing assets, such as real estate or the stock market via share buybacks etc.

    We had way too much of the latter and precious little of the former.

    So the young and poor have been struggling for a long time. What changed in 2008 was that it became a lot more difficult for those on the lower rungs of the income ladder to get the credit (mortgages) to build wealth in the way the Boomer generation did. And the harder central banks tried to compensate for this deflation with lower interest rates, the greater the intergenerational inequality became.

    The other change since the financial crisis is that global trade has been falling as a share of world GDP, due to sanctions, tariffs, trade wars and all other manner of populism. Whatever the politics, the economic consequence has been that globalisation has been exerting less downward pressure on inflation and prices have accelerated. For sure wars and pandemics haven’t helped, but supply chains were always going to have to shorten as trade slowed, baking in more cost (and larger, costly inventories).

    And every time we have a financial crisis, a recession, inflation or deflation, it is always the youngest and poorest that are hit hardest, further reducing their ability to build wealth by accumulating assets.

    And to make matters worse, as you allude, inflation and recession have been close to catastrophic for climate change engagement. So promoting the interests of our talented young and giving them a proper stake in society doesn’t just make economic sense, it is possibly existential for all of us.

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