What an achievement!
On top of all its other failings the government has managed to break one of the longest running economic trends in the UK, that each new generation earns more than previous ones.
The Resolution Foundation has found that the credit crunch and the appalling productivity growth since then means Millennials are earning, at age 30, 8% less than Generation X. The consequences for their long term wealth, home ownership, pensions and pretty much everything else are huge.
This is quite an achievement, such trends are often pretty much cast in stone and difficult to change, but this government has managed it without even noticing. But the underlying reason is even more worrying than the headlines.
The reason is that the British economy is totally failing to create the high paying, highly skilled jobs that graduates need to make a good living. We are increasingly becoming more and more a low skill, low pay economy.
This is really worrying, it is nothing to do with too many graduates but the economy that years of austerity and incompetence has created. We see it in the jobs figures when companies even in the middle of a huge downturn, hang onto skilled staff because they are terrified they won’t be able to find such skills again when the economy recovers. We see it in the fact that firms try to expand by hiring more workers rather than investing in machinery, equipment and computers.
We see it in the failure to invest in infrastructure and the failure to attract foreign investment. We see it in the scandalous state of the apprenticeship schemes and the cries of almost every sector of the economy for skilled immigrants. Brexit has added another burden to all of the above.
These all add up and they mean the economy is less efficient, less attractive, lower skilled and poorer than its rivals.
As today’s 30 year olds are discovering, that all adds up to 8% less money than their older siblings and parents earned, when they should have been earning more not less.
Reversing this and other appalling difficult trends will be a huge job, well beyond a single parliament’s capability and quite possibly impossible.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media