The Ten Percent Proposal

Problem: Governments Raiding the Birth Fund

Fix: Constitutional ring-fencing + Norway model. Make the fund constitutionally protected — tampering requires a supermajority and public referendum. Model it on Norway's Government Pension Fund Global: independently managed, publicly transparent, politically insulated. Invest passively in diversified global index funds. Publish every transaction publicly in real time.

Problem: Recession Vulnerability

Fix: Floor contributions + counter-cyclical rules. Set a minimum floor contribution per newborn regardless of tax revenue in a given year. In boom years, over-contribute to build a buffer reserve. Treat it like an insurance mandate — the contribution is non-negotiable, the amount scales but never hits zero.

Problem: 18-Year-Olds Blowing the Lump Sum

Fix: Structured payout with opt-in flexibility. Default payout is an annuity — spread over 5–10 years. Option to convert to lump sum after completing a certified financial literacy program. Partial early release allowed for education, first home deposit, or starting a business. Unclaimed funds continue compounding.

Problem: Net Profit Manipulation

Fix: Change the base metric. Replace "net profit" with gross revenue above a threshold or EBITDA — far harder to massage. Alternatively: tax-authority-reported profit, not company-reported profit. Mandate independent third-party audits for profit-sharing calculations. Whistleblower bounties for employees who expose manipulation.

Problem: Small Business Destruction

Fix: Tiered thresholds. Exempt businesses below a revenue or headcount threshold entirely (e.g., under 20 employees or under $1M revenue). Scale the rate: 2% at small scale, rising to 10% only at large enterprise level. Allow profit sharing to substitute for or offset payroll tax obligations.

Problem: Capital Flight and Relocation

Fix: Coordinated treaty adoption + border adjustment. Push adoption through existing international frameworks (G20, OECD) — same approach used for the global minimum corporate tax (already partially implemented). Apply border adjustment levies on goods from non-participating jurisdictions. Phase in over 10 years with announced milestones.

Problem: Political Capture Over Time

Fix: Automatic rules, not discretionary ones. The less human judgment involved, the less there is to corrupt. Embed the contribution rates in law with automatic adjustment formulas tied to published economic indices. Oversight boards with fixed terms, staggered appointments, and no reappointment eligibility.

Birth Fund / Baby Bond Equivalents

United Kingdom — Child Trust Fund (2002–2010)

Every child born received a government voucher (£250, more for low-income families) into a tax-free investment account. Accessible at 18 with no restrictions on use. Scrapped in 2010 as an austerity measure. ~6 million accounts opened, average balance ~£1,500 at maturity — too small to be transformative, but the mechanics worked cleanly. Lesson: Politically fragile and underfunded, but the model is sound.

United States — Baby Bonds Proposal (ongoing)

Senator Cory Booker's proposal: $1,000 at birth, up to $2,000/year for low-income families, accessible at 18. Never passed federally; Connecticut and Washington D.C. implemented limited versions. Lesson: Politically viable at small scale, stalls when the numbers get meaningful.

Alaska Permanent Fund (1976–present)

10% of Alaska's oil revenues deposited into a sovereign fund; annual dividend paid to every resident (~$1,000–$2,000/year). Constitutionally protected, independently managed, wildly popular across party lines. Has never been seriously threatened politically — because every voter receives it. Lesson: Universal distribution creates its own political protection. When everyone benefits, no one wants to kill it.

Singapore — Central Provident Fund + Baby Bonus

Government deposits cash into accounts for every newborn (up to SGD ~$10,000 depending on birth order). Combined with a mandatory savings system covering housing, healthcare, and retirement. Singapore has among the highest rates of home ownership and retirement savings globally. Lesson: Government-managed individual accounts work when institutions are trustworthy and corruption is low.

Profit Sharing Equivalents

France — Participation Obligatoire (1967–present)

French law mandates profit sharing for all companies with 50+ employees. Formula is set by law, based on company profit, wages, and capital. Held in blocked accounts for 5 years then paid out. Has survived 60 years across left and right governments. Lesson: Mandatory profit sharing is politically survivable and economically stable when the formula is standardised and legally embedded.

Mondragon Corporation — Spain (1956–present)

Worker cooperative with ~80,000 employees; profits distributed among worker-owners by democratic vote. Weathered the 2008 financial crisis better than most Spanish companies. Workers took pay cuts voluntarily to avoid layoffs — shared ownership changed behaviour fundamentally. Lesson: When workers are genuine stakeholders, resilience and loyalty increase dramatically.

John Lewis Partnership — UK (1929–present)

All employees are "Partners" and share in annual profits. Bonus has ranged from 2% to 24% of salary in a single year. Consistently ranks among the UK's most trusted retailers. Lesson: Profit sharing at scale, even in retail, produces durable competitive advantage.

Employee Stock Ownership Plans (ESOPs) — USA

~6,500 companies in the US are majority employee-owned via ESOPs. Studies consistently show higher productivity, lower turnover, better crisis survival rates. Lesson: Ownership stake changes worker psychology — the Ten Percent model captures some of this without requiring full restructuring.

Sovereign Wealth Fund Models

Norway Government Pension Fund Global (~$1.7 trillion)

Funded by oil revenue; owns ~1.5% of all listed global equities. Strict ethical guidelines, full public transparency, politically independent management. Returns via a 3% annual withdrawal rule — never touches the principal. Lesson: The gold standard for what a government-managed long-term fund can look like when done right.

Who Gets the Birth Fund?

The stateless child

Born to undocumented parents, no citizenship registered. Option A (citizenship-gated) excludes the most vulnerable children. Option B (birth-location-gated) — every child born on soil gets a fund, regardless of parentage — is more consistent with the stated goal. Citizenship can be dealt with at payout age.

The child who dies young

Least bad answer: family directs the fund, with a portion returning to the general pool.

The child who emigrates

The fund follows the person — it's theirs, not the country's. Requires international payout infrastructure; dual-citizenship complications need legal resolution.

The child of the ultra-wealthy

A billionaire's child gets the same fund as a poverty-line child. Counterargument: universality is what creates political protection (see: Alaska). Means-testing would save money but create bureaucracy and erode the coalition of support.

Who Gets Profit Sharing?

The gig worker

Uber driver, freelancer, contractor — technically not an employee. Fix: extend to all workers paid by the company above a minimum hours/income threshold. Platforms like Uber would owe a share of profit to their driver pool.

The part-time worker

France uses a formula weighted by salary and time worked — a reasonable middle ground between equal and proportional distribution.

The worker at a loss-making company

Startups burning cash, no profit — workers get nothing from profit sharing. Partial fix: once the company reaches profitability, back-dated or enhanced distributions for early employees. No clean solution here — profit sharing only works when there's profit.

The executive who is also an employee

Fix: cap the multiple — no individual receives more than X times the lowest distribution in the same pool. Or exclude employees above a certain compensation level entirely.

Systemic Edge Cases

Countries with no income tax

Gulf states (UAE, Saudi Arabia) have near-zero personal income tax. Fix: apply to all government revenue — oil royalties, VAT, corporate tax, sovereign income.

Hyperinflation scenarios

Zimbabwe 2008, Venezuela 2016 — a fund denominated in local currency becomes worthless. Fix: denominate funds in a basket of stable currencies or global index units.

Automation and the end of profit sharing

If automation eliminates most human workers, profit sharing distributions approach zero. The birth fund becomes MORE important in this scenario — it's the backstop when labour income collapses. The two mechanisms are actually complementary in an automated economy.

Who Would Support It?

The Left

Strongly pro: reduces inequality, funds public education, redistributes corporate profit downward. Concern: doesn't go far enough — why 10%? Why not more? Risk: the left fragments between those who want universal programs and those who want means-tested ones.

The Right

Partially pro: the lump sum is individual, not state-directed — aligns with ownership society rhetoric. The Alaska Permanent Fund is beloved by Alaskan Republicans — universal dividend has cross-party DNA. Strongly against: mandatory profit sharing reads as socialism. Risk: framed as wealth redistribution, it dies. Framed as universal ownership and earned stakes, it has a chance.

The general public

"Every child gets a fund" polls extraordinarily well across demographics. "Companies must share 10% of profit" polls well among workers, poorly among business owners. The combination polls better than either alone — it feels balanced: government gives, business gives.

Where Could It Start?

Most likely: a Nordic country

Already have the institutional trust, low corruption, and sovereign fund experience. Norway is the obvious candidate — it already has the fund architecture, just needs the birth-account layer.

Viable second candidate: a Canadian province or Australian state

Subnational implementation avoids the global coordination problem. Alberta (oil fund heritage) or British Columbia could pilot the birth fund component.

Dark horse: an emerging economy

A country with a young population, high inequality, and a reformist government. Rwanda, Estonia, or an oil-rich Gulf state transitioning away from petrodollars. Less institutional inertia, more political will to experiment.

How Would You Actually Get It Passed?

• Step 1: Start with the birth fund only. Less politically toxic. Frame it as "every child deserves a start" — impossible to argue against publicly. Keep the rate low (1–2%), prove the model, build the constituency.
• Step 2: Let the first generation reach adulthood. When 18-year-olds start receiving their funds, they become a powerful political constituency. The fund becomes politically untouchable — like Social Security.
• Step 3: Introduce profit sharing as the funding mechanism. Frame it as: "your company's 10% funds the next generation of your employees and customers." It's not redistribution — it's investment in the talent pipeline.
• Step 4: Use the Alaska model for protection. Make every citizen a visible, named beneficiary. Make cutting it feel like theft — because it would be.

Two compound interest models throughout. Model A — Annual Contribution: government contributes annually from birth to 18, divided equally among all children under 18. Model B — Lump Sum at Birth: 10% of that year's tax revenue deposited once at birth. Both assume 7% annual return (MSCI World historical average).

Source Data

Model A — Birth Fund Value at Age 18 (10% of Tax Revenue)

Realistic Pilot Scale — 1% of Tax Revenue

Profit Sharing — Per Worker Per Year

Combined Lifetime Wealth Picture — Full 10% Implementation

For context: the median American household net worth is ~$192,000. This system would give the average American worker roughly 1.7× the current median household net worth as additional lifetime wealth — on top of whatever they would have otherwise accumulated.

The Problem

A generation of 18-year-olds with £228K doesn't create £228K worth of new housing. It creates £228K worth of new demand competing for existing housing stock. Landlords, developers, and existing homeowners reprice accordingly. Within a decade of full implementation, house prices would likely absorb a significant portion of the birth fund's value simply through asset inflation.

This is not hypothetical — it's exactly what happened with Help to Buy in the UK, First Home Owner Grants in Australia, and student loan expansion in the US. Every time you put more money in the hands of buyers without increasing supply, sellers capture the surplus.

What Happens to Equities

If birth fund recipients invest in index funds (as the annuity default would encourage), you get a massive sustained inflow into global equity markets. This bids up stock prices — which benefits existing shareholders most, since they own the largest positions. The birth fund, invested passively, enriches existing asset owners proportionally to what they already own.

What Happens to Education

If the fund can be used for university fees, universities will raise fees to meet available capital — exactly as they did when student loans were expanded. The fund intended to make education affordable ends up funding university price inflation.

The Fixes

• Housing supply mandate: Tie birth fund implementation to mandatory housing supply targets. Fund social housing construction directly from a portion of the birth fund pool.
• Education fee caps: Birth fund disbursements earmarked for education must be matched by fee freezes or caps at accredited institutions.
• Equity investment design: Route a portion of birth fund holdings into new productive investment (infrastructure bonds, green energy, small business lending) rather than purely secondary market equities.
• Graduated release: Rather than all recipients accessing funds at 18, stagger by quarter or region to reduce simultaneous demand shocks.

Every wealth transfer mechanism in history has faced the same problem: capital flows toward existing asset owners unless supply is deliberately expanded in parallel. This is the core argument for Mechanism 3.

1. The Labour Market Power Shift

The birth fund changes something fundamental about the employment relationship: it removes desperation from the equation. An 18-year-old with £228K can say no to a bad job. They can wait a month. They can walk out of a job that mistreats them without immediately losing their home.

This isn't just good for individuals — it's transformative for the labour market as a whole. Wages at the bottom rise not just from the fund itself, but because employers competing for those workers can no longer rely on desperation. The fund functions as a permanent, universal strike fund that workers never have to vote to activate. Businesses that can only survive by paying poverty wages stop being viable. This is economic selection — the market stops subsidising exploitation.

2. The Generational Compounding Problem

Generation 1 (born into the system): every child starts with the fund, regardless of parental wealth. The gap between rich and poor children narrows dramatically at the starting line. Generation 2 (children of Generation 1): wealthy parents add to their children's funds. By Generation 2, the gap begins reopening.

The proposal raises the floor permanently. It doesn't flatten the ceiling. This means the proposal is a generational intervention, not a permanent solution. Each generation needs its own version, recalibrated to the wealth landscape it inherits.

3. The Accidental Birth Rate Fix

Every wealthy country has the same demographic crisis: birth rates below replacement. People aren't having children because children are financially terrifying. The birth fund changes that calculus — it directly reduces the financial cost of having a child, and signals something about how society values children.

A fully-funded birth fund at meaningful scale could partially reverse demographic decline — not by coercing people to have children, but by removing the financial punishment for doing so. The irony: a policy designed around giving children capital might save the pension systems that politicians have been failing to fix for decades.

4. The Welfare Replacement Argument

The UK currently operates over 40 separate means-tested benefit programmes for working-age adults. If every person arrives at adulthood with meaningful capital, a significant portion becomes unnecessary for young adults. Housing benefit for 18–22 year olds, job seeker's allowance in early career years — all become redundant or dramatically reducible for a generation that started with a fund.

The danger: the right uses this as an excuse to cut welfare before the fund is large enough to replace it. Implement the fund, prove it works, then streamline overlapping welfare. Not the reverse.

Universal Basic Income (UBI)

The most prominent alternative. UBI gives everyone a recurring cash payment, unconditionally.

What the evidence shows

• Finland (2017–18): 2,000 unemployed recipients received €560/month. Employment increased by 6 days — significant but small. Life satisfaction improved more meaningfully.
• Stockton SEED (2019–21): $500/month to 125 recipients. Full-time employment rose 12pp versus 5pp in the control group — largest effect of any pilot. But the sample was tiny.
• OpenResearch/Altman (2020–23): $1,000/month to 1,000 US recipients for 3 years. Recipients worked 1.3–1.4 fewer hours/week but were 14% more likely to have pursued education or training in year 3.
• Kenya GiveDirectly (2018–ongoing): Long-term UBI recipients showed substantially more enterprise creation. The $1,000 transfer generated ~$2,500 in total economic impact (fiscal multiplier of ~2.5).
• Cost: $1,000/month UBI for all US adults costs ~$2.8 trillion gross annually. Penn Wharton net cost: ~$539 billion after tax clawback.

Key distinction: UBI is a flow — it provides income but builds no capital base. The birth fund is a stock — it compounds, can be invested, and persists. They address different problems and are complementary, not competitive.

Land Value Tax (LVT)

Tax the unimproved value of land annually, regardless of what's built on it.

What the evidence shows

• Harrisburg, Pennsylvania (1975–present): After adopting a split-rate tax, vacant structures fell from 4,200 to 500 — an 85% reduction. Businesses increased from 1,908 to 8,800+. Total new investment 1982–2009: $4.8 billion.
• UK revenue potential: Estimates place maximum LVT revenue from UK residential land alone at up to £200 billion/year — roughly double current UK income tax receipts from property.
• OECD consensus: Recurrent taxes on immovable property are consistently identified as the least distortive tax instrument for economic growth.

LVT is a strong candidate to be the funding mechanism for a birth fund rather than a standalone alternative to it.

Wealth Tax

Tax net assets above a threshold annually.

What the evidence shows

• France ISF (1982–2017): Raised €4.2B in its last full year — but an estimated 60,000 millionaires emigrated, with capital flight of ~€200 billion over 1988–2007. Abolished by Macron in 2018.
• Norway (current): 1.0–1.1% on net wealth. Revenue rising — but ~300 ultra-wealthy individuals with combined assets of ~$54B have emigrated to Switzerland since the 2022 rate increase.
• Warren proposal (modelled): 2% above $50M, 6% above $1B. Penn Wharton estimate: $2.3–2.7 trillion over 10 years.

Key distinction from profit sharing: A wealth tax levies existing accumulated wealth. Profit sharing levies new wealth creation — making the avoidance dynamic fundamentally different. You cannot relocate "profit" as easily as you can relocate a portfolio.

Universal Basic Services (UBS)

Rather than giving people money, give everyone access to essential services: housing, food, transport, digital connectivity, healthcare, education.

• UCL IGP (2017 UK proposal): Total cost £42B/year (~2.3% of UK GDP). Households in the lowest income decile would save the equivalent of £126/week.
• The NHS and state education are the existing exemplars — universal, unconditional, broadly non-stigmatising.

UBS is optimal for genuinely collective needs. The birth fund is optimal for genuinely individual needs. UBS does not build personal wealth — a person who benefits from UBS their whole life is still asset-poor. The ideal combination: strong UBS for healthcare and connectivity + a birth fund for personal capital accumulation.

Where Governments Actually Stand — 2024

Global public debt exceeded $100 trillion (93% of global GDP) in 2024 and is projected to approach 100% by 2030. US net interest payments in FY2024 reached $949 billion — up 34% year-on-year, consuming ~20% of all federal tax revenue.

The Internal Funding Loop — The Key Fiscal Insight

Mechanism 2 (profit sharing) generates revenue flows that could fund Mechanism 1 (birth fund) — not through government taxation, but through a direct corporate-to-fund transfer:

At full 10% scale, profit sharing covers 80–82% of the birth fund cost. But at a 1% pilot scale, the maths become straightforwardly manageable:

At pilot scale, profit sharing alone could fund the birth fund with substantial revenue to spare. This is the key fiscal insight: the proposal is self-financing if implemented at the right scale and in the right sequence.

Most Fiscally Credible Countries

Australia (net debt ~32% of GDP) is the most fiscally unconstrained major economy in this analysis. Its combination of low debt, high per-child tax revenue, and developed sovereign fund infrastructure (Future Fund, ~A$230B) makes it the closest real-world candidate for a full pilot.

Germany (gross debt ~62.2%) is the strongest European candidate despite a higher structural gap.

The USA and UK both face the same structural problem: interest payments are already consuming a large and growing share of revenue.

What the Displacement Data Says

• IMF (January 2024): 40% of global employment exposed to AI. In advanced economies: 60%.
• Goldman Sachs (2023): 300 million full-time jobs globally exposed. 18% of all work could be automated.
• McKinsey (2023): 30% of US work hours could be automated by 2030.
• OECD (2023): 27% of OECD jobs at high automation risk. Employment growth in high-risk occupations has been only 6% versus 18% for low-risk jobs — the divergence is already observable.
• US labour share of income: Fell from 67.8% in 1987 to 58.4% in 2019. Automation accounts for approximately half this decline. Three-quarters of the entire post-1947 decline occurred between 2000 and 2016.

On the other side: WEF (2025): 170 million new roles created by 2030, 92 million displaced — a net gain of 78 million. Acemoglu (2024 Nobel laureate): AI will increase GDP by only 1.1–1.6% over 10 years; only ~5% of tasks will be profitably automated in the near term. Expert disagreement is genuine. Design for both scenarios.

How the Two Mechanisms Respond to AI

Mechanism 2 (Profit Sharing) in an AI economy

The Klarna case: in February 2024, Klarna's AI performed work equivalent to 700 human customer service agents. Under mandatory profit sharing, those 700 absent workers receive nothing; Klarna's remaining employees receive a share of higher profits per head. The distribution becomes more concentrated, not more equal. In an extreme scenario — Apple-scale profits with minimal human labour — profit sharing benefits the remaining few employees very well, while offering nothing to the displaced majority.

Mechanism 1 (Birth Fund) in an AI economy

The birth fund becomes more important as labour income declines, not less. It is the mechanism independent of employment status. A 25-year-old in 2045 who has never held a stable job still received their birth fund. Moreover: if AI-driven productivity raises corporate profits and asset prices, the birth fund invested in global index funds captures those gains directly. In this sense, the proposal has a built-in hedge: if automation enriches capital holders, birth fund holders benefit alongside existing shareholders.

Two Scenarios for 2045

Scenario A — "Augmented Labour" (WEF/Goldman optimist): AI raises productivity, creates new categories of work, labour and capital income grow together. Both mechanisms reinforce each other. The proposal delivers on its promise and then some.

Scenario B — "Displaced Labour" (Acemoglu/structuralist): AI concentrates productivity gains among capital holders. Profit sharing reaches fewer workers. The birth fund becomes the primary vehicle for universal participation in AI-generated prosperity — essentially a form of universal capital ownership in an economy where traditional employment is no longer the main income source.

In Scenario B, the cleanest adaptation: rename and reimagine profit sharing as a capital gains sharing mandate — distributing not only profit from employment-generating businesses but profit from automated production. Tax the machine's output the same way you tax the worker's output.

The Evidence

Agarwal, Driscoll, Gabaix, and Laibson (2009)

Analysing ten categories of credit market financial mistakes, financial decision quality follows a parabolic arc across the lifespan. Mistakes are highest for the youngest and oldest adults. The minimum — peak financial judgment — occurs at approximately age 53. Fluid cognitive ability peaks in the 20s; crystallised intelligence (accumulated experience) rises through middle age. At 53, the two combine optimally.

Fagereng, Holm, and Natvik (2021) — Norwegian lottery data

For low-liquidity winners of small prizes (~$1,500), the estimated marginal propensity to consume is approximately 100% — they spend essentially the entire prize within the year. A typical 18-year-old with no prior savings matches the low-liquidity profile almost exactly.

Hankins, Hoekstra, and Skiba (2011) — 35,000 Florida lottery winners

Winning a mid-sized prize ($50,000–$150,000) reduced bankruptcy probability in the first two years — but produced a statistically significant increase in bankruptcy rates 3–5 years later. Large prizes postpone financial distress rather than prevent it.

Nekoei and Seim (2023) — Swedish administrative data

The average heir depletes their inheritance within a decade. Wealthy heirs largely preserve it. The difference is not primarily in spending — it is in the rate of return they earn. Wealthy heirs invest in higher-return vehicles and face no credit constraints. This is the most sobering finding: the people the birth fund most aims to help are precisely those most likely to dissipate it.

Lindqvist, Ostling, and Cesarini (2020) — Long-run Swedish lottery study

Large-prize winners show sustained increases in overall life satisfaction with no evidence of dissipation over a decade or more. Wellbeing effects were concentrated in autonomy and freedom. Even if the capital is spent, the period of genuine financial freedom it provides has lasting value that pure MPC calculations miss.

The UK Child Trust Fund — The Most Direct Evidence

First accounts matured September 2020. By April 2021 — seven months later:

• Total CTF market value: £10.5 billion (~£1,911 average per account)
• Of the first ~320,000 matured accounts: 175,000 (55%) claimed; 145,000 (45%) unclaimed
• £394 million sat in matured, unclaimed accounts
• By August 2022, after a government advertising campaign, unclaimed accounts fell to ~27%

The 45% non-claim rate suggests the urgency problem is overstated — young people often don't engage immediately, which actually supports the annuity model.

Optimal Payout Design — Based on the Evidence

• Default: Quarterly payments from age 18–25 (8-year annuity)
• Early release options: First home deposit (capped), registered business startup, accredited further education
• Lump sum conversion: Available at age 25 or after completion of a certified financial planning course, whichever comes first
• No-touch premium: Fund continues compounding until claimed; unclaimed funds grow, not lapse

The Racial Wealth Gap — Current Scale (Federal Reserve SCF 2022)

The Black-White gap at the median is approximately $240,000 — a ratio of 6:1. At the mean, the gap exceeded $1 million for the first time in 2022. Each additional dollar of average income over 25 years generated $5.19 in new wealth for White households but only $0.69 for Black households — a 7.5:1 wealth-generation ratio for the same dollar of income.

The Birth Fund: Mostly Good for Equity

A means-tested or wealth-indexed birth fund (more for lower-wealth families) could close the median Black-White wealth gap by 23% and the median Latino-White gap by 28% (Zewde, 2020). A flat universal grant produces a smaller gap-closing effect because the compounding advantage reasserts itself over 18 years — wealthier families earn higher rates of return on their capital.

Connecticut's 2021 baby bonds law specifically targets Medicaid-enrolled children (disproportionately Black and Hispanic) with $3,200 at birth — an explicitly progressive design. The evidence supports this for equity impact, at the cost of the universality that builds political coalitions.

The Profit Sharing Problem: Replication of Structural Inequality

Black workers are overrepresented in nursing assistance (38%), security (36%), transit driving (33%) — all low-margin sectors. At technology companies, Black workers hold only 3.7% of roles. Profit sharing at the firm level, without cross-sector redistribution, would deliver Apple-level benefits (~$58,750) to a predominantly White and Asian male workforce, and Walmart-level benefits (~$938) to a workforce that is disproportionately Black, Hispanic, and female.

Women hold approximately $0.48 per dollar of men's retirement savings. The sectors where women are most represented (education and health employ 70% female workers) are the sectors with the lowest profit margins.

Design Responses

Option A: Cross-sector profit pooling. A portion of the national profit sharing levy is pooled nationally before distribution, with all workers receiving a base share from the pool plus their firm-specific share.

Option B: Higher rates for lower-margin sector firms. Exempt low-margin firms from profit sharing but redirect the administrative saving into a supplementary fund for workers in those sectors.

The birth fund helps children not yet born. It does nothing for anyone already older than 18 when the scheme launches. In a country of 67 million people, that is 50+ million individuals who pay for a system they will never benefit from. This is the political time bomb embedded in any birth fund proposal.

The Scale of the Generational Divide

United Kingdom

• Britons in their 60s had median wealth more than nine times higher than those in their 30s in 2018–20 — up from a four-times gap in 2006–08.
• UK house prices: roughly 8× average earnings in 2024, versus 3.6× in 1984 and 2.4× through the 1970s–80s.
• Under-35 homeownership fell from 59% in 2000 to 39% in 2022–23 — a collapse of 20 percentage points in 22 years.

United States

• Baby Boomers hold approximately 51.4% of total US household wealth. Gen Z holds less than 1%.
• Under-35 homeownership in Q4 2024: 36.3% — near a multi-decade low.
• Total student loan debt: $1.77 trillion, held by 43–45 million Americans.
• Only 19% of young Americans identify as "capitalist" (Harvard IOP Youth Poll, Fall 2025) — down from 29% in 2020.

What History Teaches — Transition Generations Must Receive Something

Social Security, USA, 1935 — the success case

The first Social Security check was issued to Ida May Fuller. She had paid a total of $24.75 in Social Security taxes. Over her 35-year retirement, she received $22,888.92 — approximately 923 times her total contribution. The system was explicitly designed to heavily subsidise the first cohort, using younger workers' contributions to fund predecessors' retirement. The strategy worked: Social Security became politically untouchable because the first generation received far more than they put in.

Sweden NDC Pension Reform, 1994 — the transition design

Sweden replaced its defined-benefit pension with a notional defined contribution model, passing with approximately 85% of parliament. Those born in 1938 received 20% under new rules and 80% under old; each subsequent birth year moved 5 percentage points further. Sweden also recalculated contribution histories back to 1960 to give everyone a retroactive starting balance. No generation was simply excluded.

France, 2023 — the cautionary precedent

When France raised the pension age from 62 to 64, it offered the transition cohort almost nothing. The result: 14 days of mass protests, up to 1.28 million people on the largest day, and a government forced to use a constitutional bypass to pass the bill without a parliamentary vote. The most politically motivated opposition came from the identifiable transition cohort who lost most.

The lesson is consistent: transition generations who receive nothing identifiable become the primary political constituency for dismantling the new system.

Design Solutions for the Transition Generation

Option 1: The Adult Opportunity Bond

On the day the scheme launches, every person aged 18–40 receives a government-issued "transition bond" equal to a fraction of what they would have received as a birth fund — declining with age. Matures at age 50 and can be used for retirement savings, housing, or business investment. Modelled on Chile's "Recognition Bonds" from the 1981 pension privatisation.

Option 2: The Adult Training and Skills Fund

A portion of profit sharing revenue — separate from the birth fund — directed into an adult skills and retraining fund accessible to all workers regardless of age. Every worker above 18 at the scheme's launch has an account they can draw on for accredited education, vocational training, or starting a small business. Creates a constituency of adult beneficiaries who have a stake in the scheme's survival.

Option 3: Enhanced Retirement Contributions

For those aged 35–60 at launch, mandatory employer profit sharing is partially directed into enhanced pension contributions rather than current cash distributions. Mirrors the New Zealand TRB approach: you don't get the birth fund, but you get something meaningful and visible.

Option 4: Sequenced Universalism

Begin at low scale (1% of tax revenue), let 18 years pass, and allow the first adult recipients to become visible advocates. The transition generation pays into the system but sees the first recipients emerge from it — and over two decades, their own children benefit. This is the Social Security model: build political support by letting the system demonstrate its value before demanding sacrifice from everyone else.