‘Younger people are entitled and lazy; they do not want to put in the graft that got their parents’ generation to where they are today.’ This accusation is one most younger people have read in newspaper columns and heard at dinner tables for years.
The flippancy of the charge is hardly worth engaging, but there is a kernel of truth to it – younger generations do have a different attitude to work than their parents or grandparents. Rather than shirk work from home, it is clear that there has been a shift in priorities between generations. As we emerge into a new post-pandemic economy, the key to a thriving business environment is for employers to understand what people want from work and engage with these priorities in good faith.
Unlike previous generations who prioritise job security and climbing the corporate ladder, the main factor distinguishing younger generations from Gen X and Baby Boomers is a stronger emphasis on finding a healthy work-life balance. Indeed, PwC research into millennial attitudes at work found that 95% of respondents said work-life balance is important to them.
Finding ways of adapting to this is in employers’ interests, as happier workers tend to be more productive. Moving away from flexible working would fritter away the significant upsides for young workers. At a time when salaries are low in real terms, many appreciate the reduced costs of working from home for some of the week. One of the few positive after-effects of the pandemic has been the survival of the hybrid-working model. Workplaces are rightly trying to find the optimal balance between office- and home-working.
But there are also more profound impacts on our lives and economy. As younger people age, many feel a need to rebalance their working lives if they are to consider starting a family. With rising childcare costs and fewer families able to afford for one parent to stay at home, working conditions need to become more accommodating. Flexible working significantly takes the pressure off young families, as each parent can balance their time at home to minimise how often they need to seek alternative childcare arrangements.
The caveat is that these changing attitudes to work-life balance do not remove the fact that cash is king. Deloitte’s Global Millennial Survey has consistently shown that low pay is the greatest source of millennial dissatisfaction. Both in 2019 and 2020, nearly half of respondents cited dissatisfaction with pay as the main reason why they would consider leaving their job within the next two years. In the UK, it is unsurprising that this frustration is felt acutely; real wages have not seen sustained growth for over 15 years. The Resolution Foundation calculated that if wages had continued to grow as they had before the financial crash of 2008, the average worker would make £11,000 more per year than they do now, taking rising prices into account.
Tackling the low-wage, low-growth spiral will require a greater focus on increasing productivity, which grew at 2.2% a year in the three decades leading up to the 2008 global financial crisis and at under 0.5% a year since. The first part of this puzzle is to upskill our workforce and young people. A glut of low-quality qualifications and university courses has seen a generation saddled with debt, but with many not receiving the skills they paid for. The introduction of T-levels, practical qualifications which train students for highly paid technical jobs in fields such as science and engineering, has been a step in addressing this problem. We need to go further to instil workplace training into company culture, like how the German system of lifelong training became a standard practice.
If we are to see real wage growth, the Government must also take steps to reform the planning system, which is easier and quicker to do than skills reform. A boom in building new homes, lab space and renewable infrastructure would naturally create a host of new practical, high-paid jobs.
Finally, Conservatives should reembrace their instincts to incentivise work. Income taxes in the UK have risen sharply, with the average graduate now paying a marginal rate of 51% between the age of 33 and 47. As the fiscal headroom becomes available, the Government should prioritise cutting income taxes first, avoiding instead the temptation of cutting asset taxes to appeal to older voters.
Taken together, it is clear that there is a balance to be struck. Policymakers should not be afraid of embracing some of the work-life balance solutions that have sprung forward in recent years, and it would be a mistake to attempt to ideologically push businesses into reverting to old practices. However, incentivising work and cultivating growth should remain core Conservative principles. In the remaining 18 months of Conservative Government, we must make work pay.
James Cowling is the Founder and Managing Director of Next Gen Tories.
This article was published in the latest edition of Centre Write. Views expressed in this article are those of the author, and not necessarily those of Bright Blue.
Read more from our August 2023 Centre Write magazine, ‘Back to business?’ here.
