Those poor children of the fathers, the Two thousand years as the post-war period – The Republic

The last decade has upset the economic order: the children are poorer than their parents, and perhaps destined to remain so. It has never happened since the war until the passage of the Millennium. Italy stands out among all the advanced countries, such as the one in which this generational turnover is more disruptive.

The general impoverishment and the reversal of expectations are the phenomena documented in the last McKinsey Report. The title is “Poorer than Their parents? A new perspective on income inequality” (Poorer parents? A new perspective on inequality of incomes). The phenomenon is massive and almost without exception in the developed world. It helps to explain – in the same McKinsey Report – social hardship that feeds populism of all colors, from Brexit to Donald Trump. To effect the impoverishment and the generational shock, an increasing proportion of citizens no longer believe in the market economy benefits of globalization and free trade.

The study by McKinsey took the exam 25 the richest economies in the world. Everything’s in there the plus Japan West. In this area, the disaster takes place in the decade between 2005 and 2014′s in the great crisis of 2008, but in fact the trend had begun before. Between 65% and 70% of the population is found at the end of the decade with stops incomes or even in decline compared to the starting point. The problem afflicts between 540 and 580 million people, a huge audience. It had never happened anything like this in the 60 years previous, ie since the Second World War. Between 1993 and 2005, for example, only a tiny fraction of the population (2%) had suffered a decline in living conditions. Now the depletion is an issue that concerns the majority. Italy is distinguished by the negative record. It is by far the most affected country: 97% of Italian families at the end of this decade is firm to the point of departure or is left with a diminished income. In second place comes the United States where stagnation or recession hit 81%. Followed by England and France. It is definitely better Sweden, where only a minority of 20% suffer from this syndrome. What makes the difference in the end is government intervention. The Scandinavian model still has something to teach us. In Italy, looking at the results of this survey, there is no trace of social policies that reduce inequalities or compensate the family income crisis.

The other end of the McKinsey report aimed at young people: the first generation , for a long time, which is worse than the parents. “Young workers and those less educated – reads the report – are hit the hardest. They risk their lives to end up poorer than their fathers and their mothers.” This generation is aware, the survey confirms this: has introjected the upheaval expectations.

The study does not just draw a bleak picture, adds the crucial distinctions to figure out how to get out. The case of Sweden is held up as a positive exception for the economic policies of governments and interventions in the labor market that have successfully combated the general trend. “The state in Sweden has moved to keep jobs, and so for the majority of the population at the end of the decade disposable incomes had grown to almost everyone.” Even the iperliberista America, however, has done something to counter market trends. Reducing the tax burden on families and increasing welfare subsidies, the US has acted to offset the depletion with some success. In Italy, once incorporated the effects of tax policy and welfare, the end result is even worse: it goes from 97% to 100%, then the totality of families are worse off in terms of disposable income.

If left to itself, the economy will not cure the depletion even if it should start to grow: “even if we were to regain the high growth of the past, from 30% to 40% of the population does not enjoy increased income” . And if it were to continue the weak growth of the last decade, from 70% to 80% of households in developed countries will continue to have stopped or decreased income.

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McKinsey report

McKinsey

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