What Brexit Means for Millennials


While the economic and political aftermath of Brexit is still sending shockwaves around the globe, one of the interesting data threads we’ve seen is the massive disparity in voting trends broken out by age group.

Younger people overwhelmingly preferred to remain in the EU, and it’s no surprise why. Limited trade barriers mean new investment can flow both into and out of the UK from the Continent without much effort. It allowed London to be a global financial center. And access to EU labor markets made it easier for working-age Britons to find jobs and relocate.

Interestingly, the older the age group, the more likely the voter was in the Leave camp.

Post-war Britain has seen its economic strength shift from industry and manufacturing to services largely as a result of globalization. This means many (now older) people who worked in factories or mines have seen their communities get poorer as businesses closed, and young have moved to cities to find jobs. While the country in sum grew wealthier as a result, the wealth was disproportionately weighted to the cities and away from countryside.

To the rural communities most impacted by this economic shift, the trend line seems to imply the country is moving towards decline even though the cities were proof the country is still quite wealthy, full of jobs and opportunities. Those cities are full of young people.

EU regulatory hurdles and central bank policies felt onerous to some, but the broader economic impact of being an EU member, even post Brexit vote, is still widely regarded to be a net benefit for citizens of member countries by experts.

Quantifying the full economic ramifications of the Brexit is next to impossible. Some experts say an exit will severely hurt British economic growth, while others say the long term effects will be minimal, given the UK’s long-standing friendly relationship with Continental member countries.

One thing of interest is that the referendum wasn’t legally binding, just advisory. Technically, the British government doesn’t have to do anything, though it’s under enormous pressure to start the exit. This has since been exacerbated by the resignation of PM David Cameron. But there is a possibility that a pro-“Remain” government could just wait this out until the 2020 election. But even if those in favor of remaining somehow stall the UK from formally requesting to leave the EU, today’s market reaction proves the damage may have already been done.

What does that mean for the young people who preferred to remain in the EU? Any recessionary effects will slow down job and wage growth. The financial services industry, a backbone of the London economy in both jobs and wages, may decline as well. So those younger voters in favor of remaining will be the most impacted over the course of their working age. This exit will be ugly no matter how it plays out.

As Intercept journalist Murtaza Hussain noted, the age breakdown showed the “Older generation voted for a future the younger don’t want.”

Age distribution of Brexit vote

 

Source: Huffington Post

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