Social democrats face the task of reforming our welfare states, which, in great part, continue to mirror the risk structures that existed more than a generation ago. The bulk of redistribution is aimed at the elderly, while little is invested in children and young people. We must build a welfare system that assures equality and efficiency in response to ongoing changes in our societies.
The transition from youth to adult used to be fairly uniform and predictable, whereas now it is prolonged due to more education and obstacles in the housing and labour markets. Meanwhile, life expectancy has risen by 10 years while retirement age has declined.
Instability with informal partnerships and divorces is growing steadily. Very low birth rates bear witness to major welfare problems, in as much as citizens are not able to have the number of children they want.
The new economy also poses challenges. Industrial economy once ensured stable and well-paid employment for the standard male breadwinner. Now we must rely almost entirely on services for job growth. Though a low-wage economy like the US may provide affordable services to average families, low-wage jobs increase the risk of poverty. The only realistic alternative to enhance affordability is either public subsidy or service provision. At the same time, the knowledge economy is making citizens who lack adequate skills more vulnerable to high unemployment, low wages, instability. Since the 1970s, market inequalities have increased, and in some countries the bottom deciles are losing ground.
In this climate, the key objective is to create a social programme that invests in families and children.