As the FT notes today, in another excellent article by John Burns-Murdoch:
In the UK [the number of] ... young people who are increasingly disengaged from not only the economy but the rest of society has doubled in just over a decade from 4.5 to 9 per cent of the population aged 20-24.
Rates have also climbed several percentage points over recent years in the US, Canada and Germany, virtually doubling in the latter two cases. In almost all cases these are record highs stretching back over several decades.
The data looks like this:
The real question to ask is, why wouldn't this happen? Many young people know:
- Their chance of living independently is low and declining.
- Housing affordability for those without parental support is declining.
- Even with increasing minimum wages, the chance of making ends meet in an economy that extracts 50% or more of wages through rents is low.
- Hard work is no longer a way to escape any of these traps, nor are qualifications.
- Children are unaffordable.
- The planet is being destroyed around them, and with it, their future.
So, why wouldn't they despair?
Unless and until we stop extracting much of the wages of young people (and others) through rents —whether actual rents, excessive interest charges, or prices inflated by monopoly power bizarrely backed by state regulation in too many cases — none of this is going to change.
The alienation of young people can be blamed on Covid, phones and much else. But those are exacerbations. The real cause is much more systemic. The real issue is rent exploitation in all its forms. It is neoliberalism that is destroying the lives of young people. And that is why it has to go.
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Housing affordability.
I live in a light suburban/rural environment (lucky me). Within walking distance there are two substantive developments. One is being touted as “luxury” dwellings. Dunno what the other is – probably the same. & yet there is a severe shortage of affordable housing in the Brussels – Leuven conurbation (& it needs to be seen as such). Plenty of BTL commentators on this blog suggest that the situatiuon is the same in the UK. The point: systemic problem and a total failure of governments (= markets always right) to do something/anything that goes beyond tokenism. (Oh & around here public transport – with one exception – is shit and largely a function of how crowded or uncrowded the roads are).
I was reading a long piece in Kyla’s newsletter (https://kyla.substack.com/p/30-days-9-cities-1-question-where), where she distinguishes between Wealth and Prosperity. She argues Wealth is mostly invisible; it does nothing to improve people’s lives. Then I thought of a bizarre analogy, comparing Wealth to Putin, and looking at Westminster and New York. Reeves and Starmer have adopted the Belarus approach, acting as a puppet government for Wealth. New York has adopted the Ukraine approach, with Mamdami offering a realistic path to improving people’s lives. Sadly, we know that Wealth will fight back with every weapon at its disposal to stop Prosperity from happening – a financial Ukraine. Will New York fight back like Ukraine, or will it revert to a puppet Government?
In the decades after the second World War, a single wage earner in a family could afford to buy a house, car, and go on holiday.
Energy was affordable. Rail fares were affordable. Rivers were not polluted with sewage.
Relative rates of poverty were lower.
Fig 5. https://www.resolutionfoundation.org/publications/improving-our-understanding-of-uk-poverty-will-require-better-data/
We now have better technology and economies of scale, yet we are worse off because prices did not go down, but profits for the few went up.
Are you familiar with Dr Tim Morgan’s “Surplus Energy Economics”?
https://surplusenergyeconomics.wordpress.com/professional-area/
The prosperity seen in the post-war era was essentially due to fossil fuel abundance, with the highest rates of extraction observed in the 1950s, which is the time period most US boomers see as the “good times” to which they would like to return.
Although plenty of oil is still available it costs more energy to extract it now because all the major reserves have been drained, and it is this energy cost that is causing a decrease in prosperity over time.
Renewables cannot match the early ECoE/ERoEI figures for fossil fuels so we cannot expect them to restore prosperity to the post-war levels. The only answer to that problem is wealth redistribution to ensure everybody has enough and nobody is able to hoard to the extent we see today.
Coincidentally, the oil sector has made ever-increasing profits over the last 50 years, amounting to some $3-billion per DAY.
https://www.theguardian.com/environment/2022/jul/21/revealed-oil-sectors-staggering-profits-last-50-years
It is estimated that the annual cost to eradicate poverty is around $60-billion, or around 20 days of oil company profits.
I have no doubt that oil extraction costs more today than 50 years ago, but I bet it is a small percentage of operating costs.
I also bet that renewables could be more extensive today, but that eats into oil company profits.
Maybe for the middle classes, but I grew up in a rented flat and we certainly couldn’t afford a car and annual holidays. The difference was the amount of social housing available and rent controls. Social housing is almost non existent now and the rent for a room in a shared house, which is how I lived in my 20s now starts at £550/month. I had a great time living in shared houses for cheap rents, but costs are now astronomical even for a room with shared facilities.
We went to stay with relatives when we were kids – and loved it.
I feel strongly that your analysis is correct. Despite the existential threats in the world when I was in my 20s, work paid and most could rent or buy a house, so we did, and I’m sure material things padded our sense of normality. De-industrialisation left many communities in a bad way, but it wasn’t universal and many young people moved. Now the lack of opportunity and hope is much wider, life chances depend much more on family wealth.
I believe this applies widely, especially to those born in the 80s who have no access to assets or parental wealth. It feels like living a dream of hope, only to see that reality is a nightmare of trying to survive.
I asked some young (very intelligent) people if they were fed up of political parties driven by neoliberalism (perhaps I phrased it wrongly) and all I got was blank faces. Perhaps it needs to be explained more clearly or, better, given a different name?
Yes
Of course
Language used always has to fit the context
Agree with the sentiment but do young people know it is Neo-liberalism they are fed up with?
That’s the problem.
We live in an age of choice – including whom we choose to blame. I mean, they’re even having a go at their parents over this. Did their parents have any real choice? I didn’t – at the ballot box or elsewhere and I rumbled Blair not because of Iraq but when he presided over the end of final salary pensions in the public sector, moves to privatise the post office and the tube in London even back then. I’ve heard young people blame Europe, immigration, the Germans, teachers etc., but I’ve never heard the term ‘Neo-liberalism’ used ever.
Good question. To think about – and I will
PSR makes a great point, and it’s probably not only young people who may not be aware of neoliberalism being their main problem in life.
I’d also like to add though, in the political science field politics in general probably lies on an XY axis (political compass), with one of the axis representing economics and the other representing social views – I.e., on the economic axis, you would have extremes of ‘left’ and ‘right’ views, with the same thing for the social axis with extremes of social liberalism and social conservatism.
I think this theory needs to be more widely adopted, instead of ‘left vs right’, as clearly politics is not that simple and is allowing the populists and establishment win. For example, you can be socially conservative but economically left wing – currently no main party has these values though (old Labour before Blair’s was this I believe). Likewise, you can be socially liberal but economically right wing (I.e., neoliberalism) which is currently all the centre parties. I would put the GP for example in the very liberal and economically left quadrant and reform in the very conservative and very economically right quadrant.
I would hypothesise that this is why a lot of the public are politically homeless, and have been since neoliberalism became the standard, even with the Green’s welcomed economic views. In a true democracy, should we not have all options available?
I thbink the left / right axis in economics and oolitucs is wrong, and I have never liked it, not least because whilst I have never had a moments dount about my left and right in this one field I reverse the two. The right are always dragging along behind to my left, in my mind. I have never understood why. And such simplicity simply does not explain the nuance you refer to.
And so, you are also right re political homlessness.
Students in Year12 (16 yr old) were making that complaint on Thursday. I explained to them how, and why. It then occurred to me that their mindset is entirely conditioned by, and enveloped in, neoliberal consumption society. For example, most have no concept of any mobile other than the latest iPhone, very little idea of food except chain food like McDonalds, don’t travel outside their houses much etc. Their education has been narrow, uncritical and prescriptive. Their other source of info is social media of tge TikTok variety. They struggle with critical concepts, logical arguments etc. Fortunately Farage hitting the minimum student wage has stuffed his appeal! Dangerous times, maybe, but most are quite liberal and aware of racism, misogyny, and surprisingly, social class advantages of the rich.
How do we overcome that?
Agree with the sentiment but do young people know it is Neo-liberalism they are fed up with?
– From my experience not really or to be more exact they place the blame at the mechanisms through which neo-liberalism operated through but not the ideology itself. Part of that is because many people I speak to don’t really know what neo-liberalism is.
They blame their parents and to an extent the baby boomer generation for voting Thatcher in and I think many know, even if they can’t articulate why, that’s where it really started. I do feel it is misplaced to an extent because the media was pushing the neo-liberal agenda and most voters wouldn’t be engaged enough to understand the long term effects, only that things got better for them so why not more of the same?
“Never attribute to malice that which is adequately explained by ignorance.”
So, what do we call it / how do we describe it?
To add to your point about qualifications no longer delivering, there’s also the requirement for young people outwith the devolved nations to bury themselves in debt to get them in the first place.
Agreed
It’s disgraceful, isn’t it, to lumber people with debt at such a young age when they’re starting out as independent adults. It must be really demoralising.
I read, recently, about young doctors who have £1,000s of debt after training in England who come to work in Scotland only to find that their Scottish trained colleagues have nothing like the debts they have because there’s no tuition fees here.
A state should invest in its young; it’s a no brainer. Education shouldn’t just be for the wealthy.
I’ll add a few from the perspective of my friends and I who are millennials and younger. Many of us are not just in the UK so this isn’t only a UK/US issue from my personal experience.
– Being expected to work longer than the generation currently retired while knowing all the help and support being given to them now will not be there if we retire. Many of us don’t think we will live long enough to retire or have the funds to.
– Having every big company talking about AI while dismissing concerns it’ll replace jobs.
– Employers making ridiculous demands and propagating abuse like unpaid internships, wanting senior level experience for entry level jobs, wanting to pay senior positions well below their value.
– Seeing companies (or rather rich people) do atrocious things, break the law and generally **** up in a way that if any of us normal average wage or below workers did we would be fired, sued or arrested and locked up. Same applies to politicians, remember how the home secretaries lost hundreds of migrant children and the courts found their behaviour illegal? No punishment.
– We can’t move to better locations because we don’t have enough money to actually move and we don’t end up better off due to that 50% of wage extraction.
– “You will own nothing and be happy” as a narrative is being pushed into every part of our life now. You can’t own things anymore without obscene upfront costs we can’t handle. Even cars are basically rented now and come with subscriptions.
It’s very obvious to many of the young that our society doesn’t care about us so why should we care about society? Another thing I’m also seeing is many of my peers are holding extreme view points now. I don’t mean only the Reform anti-immigration narrative, I mean going fully communist or “eating the rich”, some are becoming misogynistic or misandrist or becoming more resentful of 2SLGBTQI+. Much of which can be laid at the feet of social media (and america) which is being pushed upon the young in their formative years in a way many people over 40 haven’t experienced.
So much to agree with based on my own conversations.
And I should add, my father always found it baffling that I had to work so hard comapred to people of his (managerial) generation.
I think these are all good points. I wanted to also mention that the rent-seeking you mention is also the primary reason for phone and social media addiction.
Big tech companies employ the best psychologists and UI designers in the world, to ensure that young people spend as much of their waking life hooked onto their sites and apps as possible.
This “attention economy”, as Tristan Harris calls it, gains revenue by selling young eyeballs to advertisers, and is another extractive form of rent seeking.
Everyone talks about addictive algorithms, but governments are doing nothing to ban the dopamine highjacking approach from tech companies, and instead seeking to blame individuals for their own screen use. Yet another way neoliberalism is letting young people down and damaging their future opportunities.
Many thanks, Richard
As you’ve pointed out, Youth pain becomes real when basic capabilities and basic economic structures no longer reinforce each other. In my job in hundreds of typical homes i still see the consequences in energy-poor homes, practical-skills-poor, insecure families, and a generation whose expectations have been shaped more by advertising than by genuine preparation for life.
Where I think our arguments meet is here:
Commercially-created credit has escaped its original economic purpose (sorry this a bit long):
It has swollen into a speculative cloud — a vast inflation of “private” credit now dangerously-different forms that fuels asset inflation while doing too little for government or “green and public good.” When that credit money was smaller and more connected to real production, things worked better. Today, without some form of ring-fencing or directional design, the system simply keeps inflating house prices and private debt loads.
This is why I keep returning to what I call the One-Third Principle:
At least one-third of newly created credit should be directed (ring-fenced) toward green, productive, socially-useful investment.
Not through higher taxes, and not only by influencing educationally and experientially (excessive waste by gimmicky innovations, lets take more time on quality, locally. Engineers can be at fault here too) commercial-system, but also by shaping where new money flows.
Sir Jon Cunliffe’s 2021 speech — opening pages especially — shows very-clearly that the Bank of England already recognises the deep interweaving of public money with commercial bank money. The missing step, in my view, is using that insight to channel a guaranteed fraction of all new credit creation into national-retrofit, thermal-storage, from that to start with a small slice to local schools, literacy, proper books, and practical education -cloth-bound books can start at 8y-o.
In practice, the easiest starting point is a special-purpose Eco-Fit finance slice:
interest-only, capped-rate money ending after 20-yr
issued through commercial banks
tied to home insulation, solar-thermal, ground heat storage, and envelope upgrades
with a small, automatic local dividend to schools and community learning
ring-fenced so it cannot be swallowed by speculation.
Once-established, the same principle could gradually be extended to house-price-uplift credit flows and other sources of new money — giving local-authorities a stable climate-and-community fund while lightly rebalancing the wider system.
For the young: more day-release, apprenticeships, gardening, street work, old-age support, and practical skills. That alone would do more for resilience than another decade of passive classroom time. TBC..?
And how would you do that?