Saturday, 11 February 2012
Families are a thing of the past
It doesn't matter what statistic one cares to look at, the story is the same; over the last four decades, the traditional family as an institution has imploded in spectacular fashion. Take, for example, the snapshot illustrated in the chart above. In 2011, single-parent families now account for one in four households with dependent children. The structure of UK households has changed in other radical ways. Female fertility has declined sharply since the early 1970s. Family size has fallen. Many adults have foregone the joys and tribulations of procreation. Increasingly, people are living alone. The family is no longer the cornerstone upon which modern Britain is built.
Nevertheless, modern Britain seems remarkably relaxed about the destruction of an institution that existed since our forebears jumped from the trees and started the long journey out of the African Savannah. These days, people prefer to avoid making any firm connection between family breakdown and a plethora of other indicators of social disintegration. For example, it would be a brave politician that linked the four decades of rising crime rates with family breakdown.
Modern Britain is also reluctant to acknowledge a more obvious cost of family breakdown; the one that appears in our wage packets and can be found in the government accounts. The vast majority of single-parent families depend on welfare payments. Likewise, a huge proportion of pensioners depend upon the state pensions rather than their families or past savings.
To put it more bluntly, as the family as an institution was being flushed down the toilet of history, the government became mummy and daddy, dutiful son and devoted daughter to an increasing number of people. Welfare payments, as any tax payer knows, are a claim on resources created by people who work and pay taxes. In the past, the young and the old would have depended upon family-based social safety nets. The cost of rearing children and taking care of the old would have been internalised within families.
Let us put some cold hard numbers to the cost of family breakdown. Social Security payments are currently running at about 12 percent of GDP. Total government revenues are about 36 percent of GDP. So, one in every three pounds paid in tax goes to welfare payments.
Absent any significant welfare reform, this number can only increase as the population rapidly ages. We might save a little on lower education expenditures. Fewer kids mean less teachers. However, pensioners are more expensive than kids. Apart from the occasional sniffle and cracked head, children tend to be quite healthy. Pensioners are exceptionally expensive. Furthermore, child-rearing has not yet been fully nationalized. Some kids are still found in two parent working families, defraying at least part of the cost of producing the next generation of tax payers.
For some time, Britain has been trying to wriggle out of paying for ever increasing welfare payments. Rather than demand higher taxes, the government has borrowed to cover the rising cost of welfare. For virtually every year since the early 1970s, government expenditure has been higher than tax revenues received. There is now a large unpaid debt stock sitting in the UK treasury. The message from this generation to the next is a cheeky one. We expect the declining cohort of future tax payers to cover the tab for our liberal experimentation.
The really frightening thing is the future. The children of today may wonder why they should provide taxes for people they do not know, for whom care nothing, and who left them with a debt to GDP ratio of at least 100 percent. They might think that the time for fundamental welfare reform is long overdue. When that happens, who knows; Britain might need to invent a social institution where fathers and mothers live together and earn money to provide for their children and when those children grow up, they take care of their parents.