'I think the recession has already begun': Ireland's Gen Zs and millennials consider emigration

The cost-of-living crisis adds fresh woes to young workers already facing a bleak outlook when it comes to owning a home

Young people entering the Irish labour market in 2021 were earning less than those who entered the market in the 1990s and 2000s. Picture: iStock

The rising cost of living has affected everyone’s pockets, with prices in Ireland estimated to have risen by 9.6% since this time last year and inflation across the eurozone reaching a record 9.2% in August.

Many Irish households are struggling. While most in the millennial and Gen Z age group don’t need to worry about mortgages or dependents, the cost-of-living crisis has created a huge strain on those in their 20s. The war in Ukraine has sent energy bills into a spiral, with gas and electric utilities hiking prices by more than 30%.

Additionally, a growing number of young people are facing higher housing costs. Homeownership rates for young adults in Ireland have “collapsed”, according to a 2021 study by the Economic and Social Research Institute (ESRI).

More than 60% of those born in the 1960s owned a home by age 30, while the figure stood at just 20% for those born in the late 1980s.

This has led to the average young person spending more than 30% of their income on rent, and Ireland having the largest share of young people living at home with their parents in Europe in 2020 (47% of those aged between 25 and 29, according to Eurofound).

And although the Government has negotiated a pay rise for public sector employees, in general, wages are not matching inflation.

According to the ERSI, young people entering the Irish labour market in 2021 were earning less than those who entered the market in the 1990s and 2000s.

“We find early evidence consistent with (and suggestive of) such ‘scarring’ for those born in the 1990s, whose average weekly earnings adjusted for inflation were no higher than those born in the 1960s at age 20 to 22, and have by age 26 yet to surpass the average earnings of those born in the 1970s,” the report said.

Together, the forces may be enough to drive graduates out of the country altogether.

'There's nothing to keep people in Ireland'

“I’ve considered moving to Australia or America, I have a lot of friends who have moved to different parts of Europe as well,” says David Naughton, 25. 

“Their infrastructure is just so much better — a monthly public transport pass is around €9 compared to over €100 here — and everyone wants more job opportunities and better pay.

There’s nothing to keep people in Ireland anymore because it’s all gone so downhill.” 

Like most people, Mr Naughton, who lives in Galway and works for the HSE, has had to make cutbacks in the past few months. While the cost of oil and electricity has been on his mind, the price of food has hit him hardest.

“I was diagnosed with multiple sclerosis this year, so I have to eat a lot of oily fish and fresh vegetables,” he says. 

“But the price of those has skyrocketed. It’s hard because I still want to enjoy my life and do things but when you’re trying to buy certain foods for your health, especially when it’s recommended by a doctor, it’s a hard one to figure out.” 

As a renter, housing is also a worry. According to figures from the Residential Tenancies Board, new rents increased in Ireland by an average of 9.2% in the first quarter of this year, and the number of new tenancies dropped by almost a third.

“A lot of my friends have had to move back home with their parents. I’m lucky because my rent is quite cheap compared to others but my worry is that if I have to move out of my current house, I wouldn’t be able to afford another,” Mr Naughton says.

“I can only assume that a recession is coming. At the moment, I just don’t see an end in sight.” 

‘Buying a house is unattainable’ 

Cormac O’Connor, a supply chain analyst from Cobh, feels similarly. “I think buying a house is becoming out of reach for many single people, it’s just so unattainable,” he says.

The 26-year-old, who rents in Cork City, has become a lot more mindful of his spending this year. “I make more of a conscious effort to buy fewer drinks on nights out and very rarely eat out anymore,” he says. 

“I’ve bought less clothes, gone to fewer concerts, and I haven’t gone on many weekends away as I usually would. I also set a budget for myself for food and diesel each month.” 

Mr O'Connor also can’t picture costs coming down any time soon. “I don’t think it will go away. The world has never been more connected and we’re all picking from the same basket. Raw materials and demand are just gone sky high and companies can’t keep up,” he says. 

“We’re just going to have to ride the wave for the next few years.” 

'There's nothing left to put into savings'

Anna Vaughan, a 25-year-old law graduate living in Dublin, doesn’t feel any more hopeful. “I think the recession has already begun,” she says.

Ms Vaughan rents an apartment with her partner and although both of them have full-time jobs in the legal and finance industries, the rising cost of living has impacted their pockets “in every way possible”.

“Our grocery bills have ballooned. You mightn’t notice it when looking at things in isolation but the little increases have made a difference,” she says.

“Thankfully, I live in a rent pressure zone so my rent has only gone up by 2% this year but it’s still half of my income. We’re also worried about the price of gas come winter.” 

She has had to make small adjustments where she can. “I bring my lunch to work and only allow myself to buy one coffee per week and eat out once a month.” 

The cost of petrol has also taken its toll. “My family lives in Co Down so I drive a lot. I’ve seen the cost of each trip go up significantly and it’s actually stopped me from going home a good few times recently, which is unfortunate.” 

The topic of moving out of Ireland comes up frequently amongst her friends, who have been emigrating “more and more”.

“When I think of where I could potentially afford to settle down and buy a house in the future it’s in Northern Ireland. Don’t get me wrong, things are getting more expensive there too but owning a house isn’t a fantasy,” Ms Vaughan says.

“I don’t even allow myself to think about buying a house in Dublin because it’s just not within my reach. There is nothing left on the side to put into savings even when I’m super careful. It’s not becoming out of grasp, it is out of grasp.”