McKinsey’s perspective on the economy: poorer than parents

Almost every industrialised economies are witnessing their descending peak and apparently the peoples are living worse now than a decade ago. This data, registered in the latest report by McKinsey Poorer than parents? A new perspective on income inequality, is not encouraging and denounces a labour market condition that leaves anything but optimistic and that is at its worst in Italy, among the whole number of countries analysed.

The McKinsey study analysed the 25 richest economies in the world. The problem was found in the decade between 2005 and 2014, in the midst of the financial crisis that exploded in 2008. Now, a percentage between 65% and 70% of the population has a stagnated or lower income than the starting point. This is an unprecedented fact in the past sixty years, approximately since the end of the Second World War onwards.

Italy is distinguished for the negative record and it is definitely the most hit country: 97% of Italian families, at the end of this decade, is stuck at the starting point or has a diminished income. The United States comes second, because stagnation or dwindling salaries hit 81% of the population. England and France follow. Sweden is definitely better placed, as only 20% of the population suffers from this condition.

Another important result from the McKinsey report is about youth: they are the first generation in long time who lives a life being much poorer than their parents.

What to do, then? Despite of the situation, this generation seems to be well aware of the difficulties and is coping with them. It is a generation who does not need an effort to keep the pace of technology, because they grew up with it. The boys and girls in this generation do not queue at the post office, because they get their number via an app while at the opposite side of the city.

This generation, who needs to cope with difficulties their parents lived only partly, has several aces to play: blurred horizons, a global citizenship, the entrepreneurial attitude, the willingness to innovate and the capacity to take up the challenge to achieve their personal success, as they defined with their own standards, serving others in the meantime.

As an example, today the Register of the Italian Chamber of Commerce counts 6,423 startups and innovative SMEs. In the same period of 2015 this figure was approximately half the current and this number is increasing daily.

The labour reforms, following on the heels of the Scandinavian model, are undoubtedly useful and figures are pretty clear on that. However, we should not forget that difficult circumstances make us more capable of seizing the opportunity, of leveraging the favourable occasions and to make the most out of what we have. They make us more jugaad.

This process should be eased with every means we have, learning to value entrepreneurship and to nurture the spirit of innovation since the school years, in kids and then in young adults. With an educational model that integrates and completes the professional path, that does not see work as separate from study and vice versa, it is possible to give this disadvantaged generation the best means to restore the dark economic condition McKinsey registers and to realise their dreams.

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