A new report by the Institute of Fiscal Studies, showing that the generation born in the 1960s and 1970s is less well-off than their parents’ generation, is generating a lot of news coverage this morning.
Among other things, the study concludes that:
- the 1960’s and 1970s generation experienced a much slower growth in income between their 30s and 50s;
- They are less likely to own a home;
- they are much more likely to suffer income inequality
But, surely, we all know this. We know that the vast majority of the benefits of economic growth in the last thirty years has gone to rentiers, not wage-earners. We know that we of the 1960s and 1970s generation are unlikely to be able to afford to buy the house we grew up in. As a child of the 1960s – the Robins era – I had a free higher education at one of the most famous universities on the planet; my parents were not expected to support my journey into indebtedness. My father, a skilled craftsman earning a decent wage, was able to buy a suburban semi on his income alone in his twenties; and his generation expected things to get better.
The real message – for those who have only just noticed – is that we, the generation that came to adulthood under Thatcher, are materially poorer than our parents. We are now beginning to contemplate a retirement that inches further and further away, with the expectation that we will face far greater difficulty than our parents did. The NHS has been abolished in all but name and we are facing greater and greater uncertainty.
And we are faced with a politics that doesn’t want to talk about these issues, except insofar as politicians are willing to blame the real angst that people feel on benefit scroungers and immigrants, and who use the language of sanction and racism to conceal their own lack of ideas. The facts are rather simpler: we grew up during an unprecedentedly benign era – the age of Keynes and Beveridge, when a large enabling state sought to ensure that society worked better by promoting economic security and progress. As the memories of the pre-war era of mass unemployment and Fascism faded, and the wealthy looked to break the bonds that held back their accumulating, we abandoned that consensus in favour of a more strenuous ideology of individual striving, of competition, of inequality as spur to economic activity rather than as affront to human dignity.
And at last, it’s hit the headlines (although the cynical might say that you had to be a journalist or politician to have had the obtuseness needed to miss it). This is the legacy of Thatcherism pure and simple; the legacy of New Labour too, although at least Labour now has a leadership willing to change the language of the market.
The genius of the economics of the market is to give the impression of wealth while shifting it from the majority to the minority. Perhaps there is just a glimmer of hope that this report – and the publicity it receives – will help to jog the political class out of its complacency.