FILE PHOTO: People are seen in the Level39 FinTech hub based in the One Canada Square tower of the Canary Wharf district of London, Britain, August 5, 2016. REUTERS/Jemima Kelly/File Photo
It is highly unlikely that young Britons will enjoy the relative wealth of their parents. Jemima Kelly/Reuters

UK millennials face a poorer future than their parents

In the late 18th century, French philosopher Jean-Jacques Rousseau wrote about the existence of a "social contract" between citizens and the government.

A similarly unwritten set of rules exists between generations: children promise they’ll take care of their parents, because they expect to be treated the same in the future.

A new report by the Intergenerational Commission, a group of experts organised by the Resolution Foundation think tank, shows that this second contract has broken down in the UK.

For the first time in decades, young people don't expect to be richer than their parents. The analysis is spot on, and would apply to plenty of other European countries. Yet many of the proposed remedies, including a £10,000 (Dh49,697) “citizens' inheritance” for cash-strapped young adults, fall short – and could prove counterproductive.

The most striking difference setting apart British millennials from earlier cohorts is pay growth. While in the past, each generation had higher real earnings than their predecessors, people born in the 1980s haven’t enjoyed similar. They’re grappling, too, with problems that their parents never had to face, from expensive housing to uncertain pensions.

These problems are even worse in places in Europe that can’t match Britain’s healthy labour market. During the financial crisis, youth unemployment in the UK rose by less than in previous recessions. Jobs have recovered strongly since. Millennials in other countries, from Greece and Italy to France and Spain, haven’t been that lucky. According to a recent study by the International Monetary Fund, one in four youths in Southern Europe is at risk of poverty.


Read more:

UK wages rise faster but property to remain out of reach for young

UK’s May decries gender pay gap as ‘burning injustice’


Unfortunately, the suggested remedies for the UK from the Intergenerational Commission are disappointing. Take, for example, that idea of giving all 25-year-olds £10,000. This subsidy could be spent only on a limited range of items, including paying back student debt, investing in training or buying a house.

For a start, such lump-sum payments would go to all younger people, regardless of income and wealth. That would be a poor use of state money, which is better targeted on the disadvantaged. Second, these subsidies typically end up increasing the price of the items they can be spent on. Universities would no doubt bump up fees for graduate courses, knowing there’s an extra £10,000 to squeeze from students.

It’s unclear too whether all the report’s objectives make sense. Nudging young people toward saving for pensions, for example by exempting employee contributions from National Insurance, is a good idea. However, the usefulness of contributing toward housing deposits is less obvious, given the daunting cost of British homes. Politicians should work instead on increasing housing supply, something the report recommends, too.

Finally, one wonders whether the report’s recommendations are ambitious enough. Asking older people to pay £2.3 billion more a year for the National Health Service by raising retiree National Insurance payments is one way to tip the scales. But the distributional implications across generations would be small.

More radical ideas exist, for example setting all tax rates depending on the age of workers, as recommended by Matthew Weinzierl, an economist at Harvard Business School. In countries with strong state pensions, governments could cut excessive benefits when they are much higher than workers’ contributions.

Ultimately, though, the state can only do so much in re-settling the intergenerational contract. Much faster economic growth than we’ve had over the past decade, accompanied by an acceleration of wages, is essential to today's young workers. To the extent that the government can help, policies need to be laser-targeted and radical.

The Intergenerational Commission could have done better on both counts.


Dubai works towards better air quality by 2021

Dubai is on a mission to record good air quality for 90 per cent of the year – up from 86 per cent annually today – by 2021.

The municipality plans to have seven mobile air-monitoring stations by 2020 to capture more accurate data in hourly and daily trends of pollution.

These will be on the Palm Jumeirah, Al Qusais, Muhaisnah, Rashidiyah, Al Wasl, Al Quoz and Dubai Investment Park.

“It will allow real-time responding for emergency cases,” said Khaldoon Al Daraji, first environment safety officer at the municipality.

“We’re in a good position except for the cases that are out of our hands, such as sandstorms.

“Sandstorms are our main concern because the UAE is just a receiver.

“The hotspots are Iran, Saudi Arabia and southern Iraq, but we’re working hard with the region to reduce the cycle of sandstorm generation.”

Mr Al Daraji said monitoring as it stood covered 47 per cent of Dubai.

There are 12 fixed stations in the emirate, but Dubai also receives information from monitors belonging to other entities.

“There are 25 stations in total,” Mr Al Daraji said.

“We added new technology and equipment used for the first time for the detection of heavy metals.

“A hundred parameters can be detected but we want to expand it to make sure that the data captured can allow a baseline study in some areas to ensure they are well positioned.”


Developer: SCE Studio Cambridge
Publisher: Sony Computer Entertainment
Console: PlayStation, PlayStation 4 and 5
Rating: 3.5/5

Sly Cooper and the Thievius Raccoonus

Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
Rating: 5/5


Developer: 11 Bit Studios
Publisher: Odd Meter
Console: PlayStation 5, PC and Xbox series X/S
Rating: 4/5


West Ham United 2 (Antonio 73', Ogbonna 90+5')

Tottenham Hotspur 3 (Son 36', Moura 42', Kane 49')

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