Intergenerational Equity - Fairness and the Slump

The recession and weak recovery is bringing about important employment and income distribution effects among different generations in Britain. The externalities of a slump are never uniform and I hope that good examiners at AS and A2 level will always reward students who bring comments and arguments about equity / fairness into their evaluative discussions. Recently there has been increased media coverage of the inter-generational effects of the financial crisis and the recession.

In this clip on Sky News, Martin Weale (MPC member and my old tutor at Clare College Cambridge) discusses how younger people have been affected with Edmund Conway.

“When I look at how different age groups have done since the crisis, it seems to me that the burden has been disproportionately on young people. Even for people in their 20s who are in full-time work wages have been squeezed more than those of old workers. Consumption patterns between 2007 and 2010 also suggest that older people have been able to increase their spending whereas in younger cohorts there has been a squeeze in spending on goods and services”

And today in his Financial Times column, John Kay is on great form with a look at inter-generational fairness

“Intergenerational equity is an ugly phrase, but an important concept. And intergenerational equity is not only, or even mainly, about levels of government borrowing and debt. Most parents want to give their children opportunities to live a life better than their own. But when we act together, we aggressively pursue our own interests at the expense of our children and grandchildren: a bizarre paradox of perverse collective action.”

I urge everyone to read this - a beautifuly written and powerful piece