“Even youths grow tired and weary, and young men stumble and fall; but those who hope in the Lord will renew their strength. They will soar on wings like eagles; they will run and not grow weary, they will walk and not be faint.”
Eagle-eyed readers of the last May edition of The Sunday Times may have spotted a small article at the foot of its front page, ‘Doubts over new A-level grading’. It draws attention to the likelihood that the teacher assessment process will favour ‘conformists’ and penalise ‘mavericks’ in this essential pre-requisite for university entrance.
It’s just one aspect in which Generation Z, comprising those born between 1995 and 2015, are losing out as a result of the virus emergency. The media has been full of others: the continuing secondary school exclusions, growing evidence of mental health issues, the inability to form relationships, the prospects for future employment.
But it doesn’t end there. Unless radical steps are taken to seize the dividend offered by the economic impact of technology, there’ll be massive public sector debts to service and repay throughout their working lives.
So in this commentary we consider the irony that those least affected by the biological impact of Covid-19 are those likely to be the most impacted in terms of their future prospects.
One of the most useful statistical websites on Covid-19 is Worldometers.info, which reports that under 65s are 17 times less likely to die from the virus than those aged 65 or more; and that, of the younger people that do die, 89% had one or more underlying medical conditions. Meanwhile, we understand that only 1% of the UK’s 40,000 deaths comprise those under 45 years old.
As we commented on 2 March, Covid-19 is an old person’s disease. Whilst it can be spread by anyone of any age, in nearly all cases it leaves young people untouched by death or serious illness.
But young people are being seriously damaged in other ways. Firstly, in the massive disruption to their education, particularly for those in the critical few years leading up to university entrance.
The Sunday Times article draws particular attention to the impact on ‘non-conformists’, who are the most likely to be entrepreneurs in business, creative stars in drama and the arts, or original thinkers changing the direction of society in the future. Whereas ‘conformists’ can find the stress of exams too much, non-conformists often come up with unexpectedly good results. Under standardised teacher assessment, they are more likely to lose places on degree courses at university.
Much attention has already been given to the disproportional impact of lost education on the most disadvantaged, and when combined with the teacher assessment challenge, this could have a big impact on future social mobility.
That’s why it’s so important to focus on financial education during the lockdown (see our 14 April commentary). In particular, 16 and 17 year-olds need to use this time to find their Child Trust Funds and increase their financial awareness. The Share Foundation is starting to make some good progress in its programme for CTF recovery, and would welcome any assistance with help for its UK wide programme.
I was also pleased to see last week that the London Stock Exchanges has launched its new financial education pages: their website is visited by c. 130 million people each year, and they could make a significant contribution.
Job prospects for the young have already been seriously dented by the European Union’s blunt abolition of retirement age, and huge numbers of vacancies have been lost as a result of the virus emergency, Whereas older people have experience and connections to help them find new opportunities, Generation Z new adults usually rely on jobs in hospitality and retail - all of which are most challenged at present.
So, we need a huge programme of Government infrastructure spending to be focused on areas which will quickly open up opportunities for young people. A radical programme of alternative energy production – solar, tidal and wind - could be geared towards young people in every region.
Finally, there’s public sector debt. In conventional terms, this would land squarely on the shoulders of those in employment for the next few decades – the young. But this time it doesn’t have to, if Andrew Bailey and Rishi Sunak take the huge economic dividend offered by technology.
It was clear, well before the 2008 financial crash, that a new phenomenon was keeping inflation suppressed when it should have been stoking up in the then booming economy. In the past, it’s been argued that monetary policy is the key arbiter of inflation, but the supply/demand balance has clearly had a much greater impact going back over the past twenty years.
I believe that this can be traced directly to the technological transformation which we are going through, which is having an economic impact as large as the Industrial Revolution. It introduces huge scalability in supply, including massive production energy released from regions of the developing world, and at the same time demonetising demand through providing digital alternatives and delivery. Meanwhile it strips out costs such as transport and premises.
That’s why I believe the pronged suppression of inflation provides a substantial technology dividend which can be taken in the form of cancellation of Central Bank held Government debt: also known as ‘helicopter money’. This could extricate us much faster from the economic impact of the virus emergency, to the particular advantage of Generation Z.
Gavin Oldham OBE