Friday, June 24, 2016

The UK is out of the EU and it is the oldies to blame - maybe it is a tad more complex than that

You might have read something about the UK having a referendum and voting to leave the EU.

I am sure that studying this subject will keep hundreds, maybe thousands, of PhD students busy for years to come. 

The headline observation that has dominated much of the 'day after' media has been about the divide in the vote between the young and the old. 

There has been a stream of screams of annoyance at how the old are a selfish bunch who had no consideration for their children and grandchildren. All they were thinking about was themselves. 

I am not going to get into debating this contention but I think it might be worth considering this fact.

The first chart shows a rough cut of the voting by age. No doubt much more accurate data will soon be available. However, it is pretty clear that the 18-24 age group voted overwhelmingly to remain in the EU. Like people voting to exit there were be a host of different reasons. The most quoted one in the media is to do with freedom of movement and wanting to feel 'European'.

The second chart shows the distribution of wealth in the UK. It doesn't take an Einstein to see that the youngest age group has virtually no wealth and lots of debt. Most of the wealth is held by the 65+.

So consider this fact. Who has lost the most today? At the time of writing this all the world's stock markets are way down. The value of Sterling is way down. The people taking the financial hit are those with wealth - those are the people that voted to leave.

Also consider that one of the Remain supporters (the UK Government) forecasted that property prices in the UK will fall by 15%. Who owns the property - the 65+.

Do you see a pattern emerging here? The people who will wake up tomorrow with a tangible dent in their wealth are the ones that voted for exit - even though they had been warned of the consequences.

As far as the 'young' are concerned they might be in a better financial position being able to afford a house. 

So before we run away with the idea that the old had no financial stake in the decision we should remember who is sitting on a hole in their pensions following the leave vote. 

Another much quote statistic is that it was 'unversity graduates' that voted to remain. This is a secondary effect of the split by age. Only about 5-7% of the 65-75 age group attended university. The figure is now around 48%.  So the age and education issue are interlinked. Dick Stroud

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