Generation Inequality

Inequality is experiencing something of a renaissance. After the end of the Cold War, the lesson learned by the Democrats under Clinton and then the Labour Party under Blair was that harping on about inequality was a sure-fire way to alienate voters. So for more than a decade we had, in this country, a supposedly centre-left government that was, in the words of one of its chief spokesmen, “intensely relaxed about people getting filthy rich.”[1]

Then came the financial crisis and it suddenly became fashionable to ‘bash the bankers’ and their huge unjustifiable bonuses. Meanwhile, an increasing number of academics across a variety of disciplines – from the social epidermiologist (someone who studies the social causes of health problems) Richard Wilkinson to the Nobel Prize-winning economist Joseph Stiglitz – have promulgated the view that too much inequality harms not just the poor; it harms all of us.

But for many, this still seems somewhat counter-intuitive. We may be shocked by the headlines generated by Oxfam’s recent research report on global wealth inequality – ‘the 85 richest people in the world have as much wealth as the 3.5 billion poorest’ – but what’s it got to do with you and me?

London inequality

The majority of people reading this blog probably don’t know anyone either in the top 85 or the bottom 3.5 billion. Most of us experience inequality in a pretty impersonal way. We pass it in the street, but rarely stop to say hello or buy a Big Issue. So the “I’m all right Jack” mentality persists.[2]

But today in Britain this is changing. Increasingly, for my generation, inequality is not just something we see on TV or read about in the newspaper; it’s a felt reality. It’s no longer just corroding society at large, it’s beginning to tear apart our social circles.

A lot is made in the press about the plight of people in their 20s today. We’ve been labelled ‘generation rent’, because with the housing market the way it currently is, few of us can realistically aspire to own our own home anytime soon. Sometimes we’re even described as a ‘lost generation’ because unemployment is so high amongst us.

At times, however, these headlines obscure how divergent our experiences are.

I went for dinner recently with a group of old friends. All of us in our mid-20s; all university graduates. One topic of conversation dominated: the two people who hadn’t made it to our little reunion. They hadn’t come for two quite different reasons.

Paul is unemployed and has been pretty much continuously since he graduated in 2010. He had sent a text earlier in the day making his excuses because he couldn’t afford to come to London (he can’t live here because he can’t afford to rent) and go out for dinner.

Greg, on the other hand, is a trainee at a major City law firm. He is regularly in the office past 10pm on a weeknight and rarely gets a weekend entirely to himself. He sent his apologies shortly after 9pm, saying he was still hours away from leaving work.

Both Paul and Greg are in a sense poor (one of money and one of time). Neither of them seem like they have in any meaningful sense “won”.

Once upon a time a university degree was a more or less guaranteed ticket into a well-paid, high-skilled job. By surrounding yourself socially with other graduates you could pretty much guarantee you’d know plenty of Gregs, but no Pauls.

What’s striking though is how common it has become for members of my generation to know people in both Greg’s and Paul’s position. Today, across Britain, friendship groups are being undermined and social ties eroded by the twin evils of unemployment and over-employment.

The statistics speak for themselves. According to the ONS, long-term youth unemployment hit a 20-year high of 282,000 in September 2013. Add in the short-term unemployed (approximately 700,000), and in total more than one in five 16-24 year olds is jobless.

Of course, graduates generally fare better than non-graduates in the job market, but recent graduates (those who have graduated in the last 5 years) too have struggled since 2008. Almost one in ten is currently unemployed, up from one in twenty six years ago.

The over-employment story tends to receive less attention. It seeps into our consciousness from time to time as a result of stories like the tragic death of Merrill Lynch intern Moritz Erhardt last August. But for the most part our fixation with a narrow monetary definition of wealth[3] means that we struggle to see young graduates working for global banks, magic circle law firms or one of the ‘big four’ professional services giants as anything other than triumphant winners in the free-market capitalist race to the top.

It’s also hard to find reliable data on the hours worked by recent graduates in these kind of jobs. Five minutes on the website Inside Buzz, which publishes anonymous reviews by current employees working for hundreds of the biggest UK companies across a variety of sectors, is enough to get a sense of the overall picture though. Click on any major financial or professional services company and you will find dozens of reviews by entry level employees saying they feel fortunate to only work 60 hours a week when so many of their contemporaries in other departments or at other firms, regularly work more like 100 hours a week (presumably those actually working 100-hour weeks don’t have time to fill in online surveys about the number of hours they work).

The point is this: if you add together recent graduates who are unemployed (9%) and recent graduates working in sectors where they are likely to be over-employed (21% in banking and finance alone), you get a sense of the scale of the social challenge we face. Approximately one in three people in their early-mid 20s is being alienated from their friends due to their employment situation.[4] And that makes all of us poorer (in the Ruskinian sense).

[1] Peter Mandelson first used this phrase in 1998 in a speech to a group of Silicon Valley executives.

[2] “I’m All Right Jack” was a 1959 film starring Peter Sellers and Richard Attenborough that satirised the petty, self-interested behaviour of both workers and bosses that was widely perceived to be characteristic of many industrial disputes at the time.

[3] I believe we’d all be a lot happier if we adopted something closer to the Victorian art critic and social thinker John Ruskin’s definition of wealth: ‘There is no wealth but life. Life, including all its powers of love, of joy, and of admiration. That country is the richest which nourishes the greatest number of noble and happy human beings; that man is richest who, having perfected the functions of his own life to the utmost, has also the widest helpful influence, both personal, and by means of his possessions, over the lives of others.’

[4] If you aggregate unemployment and over-employment, this is roughly true for non-graduates too, the only difference being that the percentages for unemployment and over-employment are reversed.

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