It’s Time To Build An Economy That Works For Everyone

The economy is not performing in a way that works for everyone as politicians struggle to understand what’s happening. But there is a growing plea for answers to the day-to-day problems people face.

Current difficulties

The difficulties created by an economy that rewards a minority of people have been around for some years but are now particularly acute. There has always been a link between economic growth and increasing prosperity for the majority of people but it has been broken in recent years.

Growth in the economy is not leading to higher wages and as a result people are feeling worse, rather than better off. The frustration felt by so many people is feeding through to politicians as voting patterns reflect a demand for change.

Such change is often not well defined or articulated but there’s a restless irritation among voters, as they want relief from the pain caused by slow growth. The formal response is for a new type of fair and inclusive economy, so greater numbers of people feel more engaged and prosperous.

The challenge lies in how to turn what is a high-level idea into policies that prompt everyday practical solutions. Traditionally, the economy produced enough growth to ensure services such as health and education were affordable but a new model is needed to provide these services in the future.

Economic growth

The economy is currently growing at modest levels and likely to do so for the foreseeable future, which causes problems of affordability unlike any previously seen.

Recently, the UK Prime Minister Theresa May spoke of building an economy for everyone, which is not a new idea. But it is what is needed at this time. The proof, of course, will be in seeing what such an economy looks like and how, in practical terms, it will improve people’s lives.

In the past, there have been attempts to develop a more inclusive society, which, despite higher levels of economic growth, failed. Employment played its role in previous attempts as governments concentrated resources on creating as many jobs as possible to spread wealth as wide as possible.

In the current environment where many jobs come with low and stagnant wages the answer is not so simple. More people are working than ever before but greater numbers of those who are working live in poverty, which breaks the link between a growing economy and one in which the majority of people thrive.

At this stage it is reasonable to say the economy has shifted to a new model of operation and so government, if it is to make real its promise of an inclusive economy, must change too.

So, it is time to develop a new model of economic growth that benefits everyone and the starting point lies in accepting that the current model is broken.