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'Good reasons for concern': Young face worrying circumstances despite Budget's 'youthful tinge'

The pandemic has compounded long-standing issues around accommodation costs, low pay and job precarity.

Image: Shutterstock/Drazen Zigic

YOUNG ADULTS ARE in danger of falling through the cracks as the Irish economy continues to recover from the pandemic shock, experts and advocates have warned.

The crisis of the past 18 months has compounded long-standing issues — skyrocketing accommodation costs, low pay and precarious work — that have dogged the 15-34 age cohort in the years since the post-2008 recession.

In some respects, young workers had only begun to regain some of that lost ground when the pandemic hit.

But over the past 18 months, the burden of Covid-related job losses has fallen unevenly on sectors where young workers are heavily represented. Retail, arts and leisure and hospitality were most affected  — sectors which also tend to have a higher incidence of low pay and precarious work.

With this week’s Budget, the Government hoped to copper-fasten the economic rebound and safeguard incomes against the rising cost of living. 

But does it do enough for young working adults or is it charting a course for another recovery that will largely bypass this age cohort?

“The direction of travel is positive, except the scale of action is completely anaemic,” Ruairi Power, President of University College Dublin Student Union (SU), told The Journal this week.

Amid declining rates of homeownership — due to the affordability crisis in the housing market — workers in their 20s are now spending more on rent and earning less in real terms than their parents did. That’s according to a study by the Economic and Social Research Institute (ESRI) published earlier this year.  

While there are “some positives” in the Government’s ‘Housing for All’ strategy, there was a “threadbare focus on renters overall” in Budget 2022, Power believes.

“We were hoping to see a more targeted timeline for intervention set up this year,” he said.

That didn’t happen. Particularly when it comes to purpose-built student accommodation, it’s clearly not a priority for Government, even though it is probably the biggest challenge for students in trying to find accommodation — the lack of affordable supply, the lack of accommodation near to college campuses.

The decision to halve public transport fares for people under the age of 24 is “probably the biggest win” for students in Budget 2022, the SU president said.

Power also praised the 30c increase to the minimum wage.

But a €200 increase to the SUSI grant — the first in a decade — is a drop in the ocean, he believes, given that “the cost of living has exponentially increased in that period of time”.

‘Less rapid wage growth’

“There are good reasons to be concerned” about the bigger picture for young adults, said Barra Roantree, an ESRI economist who authored the report on intergenerational inequality earlier this year.

Aside from high accommodation costs, the other major issues likely to be compounded by the pandemic are anaemic wage growth and the persistence of unemployment among younger workers, Roantree said. 

His research has shown that before the pandemic, younger workers were still reeling from “the consequences of the Great Recession”.

The combined impact of two massive crises in the space of just over a decade is really something to worry about, particularly when you match that then with the developments in the housing market.
Younger workers, younger adults are really the people who are most exposed to rental sector, because of declining homeownership rate.

While employment had recovered for most age cohorts during the intervening years, that wasn’t the case for young adults as the public health crisis hit.

“For those between the ages of 20-24 the share of them who weren’t in employment or training was still quite a bit above where it was in 2007,” Roantree explained.

“Even for other younger age groups – those in their late 20s and early 30s – it only just really recovered on the eve of the pandemic back to kind of where it was before the Great Recession.”

Then came Covid-19 and with it business closures and ballooning jobless figures. In April this year, the Covid-adjusted jobless rate — which includes Pandemic Unemployment Payment recipients — topped 61% for 15-24-year-olds.

“That’s, in part, because of the sectors they work in,” Roantree said.

Retail, hospitality, arts and leisure — much more younger adults work in those sectors than used to be the case. 
For people born in 1990s or the late 80s, something like a third of them at age 25 work in those sectors, whereas for people born in 1970s, it was only about 20%.

These also tend to be the sectors of the economy with some of the highest incidence of low pay.

Because of this, younger workers before the pandemic “were essentially starting their careers relatively lower down the wage ladder in lower-wage occupations than previous generations,” Roantree explained.

“And they were also experiencing less rapid wage growth.” 

Those two issues are “particularly troublesome” for women, he added.

“If you’re starting lower down the wage ladder, progression becomes more important. And if you’re then getting less progression, then that’s not a good position to be in.”

Although there has been a rapid recovery in the unemployment picture this year, we’ll have to wait to assess the longer-term impacts, Roantree said.

Youth dividend

“I fundamentally believe that the intergenerational social contract is under threat,” said  Ian Power, Chief Executive of youth information service SpunOut.ie.

You’ve got stagnant wages, increased job insecurity, higher costs of living across the board, but particularly in housing. You’ve also got a situation whereby young workers today are funding a growing ageing population in terms of pensions and healthcare.

“Ultimately, that’s all going to come to a head at some point and the younger generation is going to question what it’s getting from the system.”

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Although there was certainly a welcome “youthful tinge” to Budget 2022, “the scope of ambition was just too narrow to make this a proper youth dividend budget”, Power believes.

Overall, it does little to address major intergenerational imbalances, he says.

But what about the more immediate issues like youth unemployment, training and development?

“I very much welcome the increase in the number of apprenticeship places over the last two budgets,” Power said.

In particular, he praised a new online CAO portal — announced by Higher Education Minister Simon Harris this week — that will allow students to view apprenticeship options alongside university and further education courses for the first time.

“That’s all really positive — but I do think what we’re most concerned about is young people who are long term unemployed and who were at least a year out of employment before the pandemic began,” Power said.

We didn’t see any sort of specific measures contained in this budget to help those young people get into training so that they can fundamentally get into jobs that are going to give them a good wage.

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