How the Great Generational Wealth Transfer Will Shape Our Political Future
Political parties as varied as the French National Rally and the American Democrats took comfort in their defeat by the fact that, even if they may have been defeated electorally, they at least won a majority of votes among young people.
Defeated parties love this kind of thing because it allows them to imagine that happier days are upon us and that victory can be achieved without having to do anything as dirty as bringing voters from the other lot to support you. It’s much nicer to imagine that you’ll win because your opponents are dead than to admit that they have a point.
Triumphant games love it too, as it’s also more comforting to see your opponents beaten as young and stupid rather than having to wonder if they might have a point as well. The problem is that even though age is, for now, a good predictor of a person’s vote, the generational divide in most democracies is an illusion. Look closely and these “new divides” are much like the old ones – in which asset ownership and wealth are still central to explaining voting behavior.
The latest study to highlight this truth, by Jane Green of Nuffield College, Oxford, and Roosmarijn de Geus of the University of Readingin many ways, simply deepens our understanding of what happened in the 2019 UK general election. not only the votes of middle-class workers with secure jobs and stable incomes, but also the support of people in working-class jobs who enjoyed the same.
In many ways, this is completely unsurprising. When James Kanagasooriam, the Conservative pollster, coined the term “red wall”, he did so precisely because these were seats with large numbers of voters who in other parts of the country were already reliably conservative. The Conservative Party’s electoral success was not in attracting a new type of voter, but in ending its long-term underperformance among the same type of voter elsewhere.
But Green-de Geus’ study is useful because it strengthens our understanding of existing divides in the UK while shedding light on future ones. As they explain, the overlooked divide in British politics (and indeed in the rich world) is not between generations, but within them. Among young people, they describe this divide as “will haves” and “won’t haves”. On the one hand, there are the “will haves”: the people who will inherit the property and wealth of their parents and grandparents. On the other hand, there are those who will not have any, who have no family money in their future. The first group are largely, but not exclusively, graduates. The latter are largely, but not exclusively, no. To make matters worse, the decline of high-paying, unqualified professions will only continue, so the ‘have-nots’ will have fewer opportunities to earn their own wealth.
This divide is not just theoretical for future politics: it has important implications for the present. Having access to the family balance sheet – and thus being able to remortgage to release a deposit, or take on tuition debt on a much lower and longer repayment schedule – makes a significant difference to your career and your life right now.
For parties like Labour, whose current electoral coalition ranges from precarious and heavily taxed graduates to precariats, the political threats posed as the ‘haves’ become ‘haves’ are obvious. The currently reliable seats in England’s major cities could quickly become Conservative seats as half of their electoral base becomes more affluent. More importantly, at the present time, young ‘have-nots’ will benefit from the belief among young ‘have-nots’ that their electoral interests are broadly aligned. If the ‘haves’, who vote in greater numbers than the ‘have-nots’, decide that their interest in fact lies in voting for lower inheritance taxes and higher contribution-based pensions, then the difficult future that the “have not” will face. only gets worse.
Equally, however, this demographic shift could disadvantage the right. How you vote depends as much what you perceive as your true class. Will a graduate with considerable wealth be as likely to vote Conservative as his parents were if his friends and neighbors are still trapped in the private rental sector, either because his parents had less wealth at the start, or because he had swallowed up more by social charges?
Just as all but the most privileged young voters cannot say with certainty that they will end up as one of the “haves” rather than the “have-nots”, no political party can be sure that the large transfer of wealth from one generation to the next will not upset their own political calculations.