Ciarán Nugent: Young people have good reason to worry about the Irish economy

If the basic need of housing is unattainable for a growing number of workers, it is fair to say the Irish economy is failing young people

Mon, 01 May, 2023 - 13:19

Ciarán Nugent

More than six in 10 young adults are still living at home in Ireland, the largest proportion since we started counting, and the average age for leaving the nest has increased sharply to 28 years, based on statistics taken before the current inflation and rents crisis.

Young people are worrying about their futures, while at the same time radio discussions appear to deny the reality and focus instead on young people owning mobile phones, or supposedly buying exotic fruit.

It would appear that young people are toxic, and the explanation for such attitudes may have something to do with the labour market. The share of young people, or the under 40s, working in employment has fallen sharply to 45% from about 60% since before the financial crisis.

That means there are 250,000 fewer workers under 40 than there were in 2007. Young people may not have the representation in workplaces that they had 15 years ago, which may be reflected in the composition of newsrooms, college faculties, and even think tanks.

Psychologist Abraham Maslow identified housing as key in his hierarchy of needs for people to lead a full life, to obtain safety and to meet physiological and biological requirements for human survival.

If a basic need is unattainable for a growing number of workers, it is fair to say the Irish economy is failing young people.

One of the reasons some of the headline economics measuring living standards appear to contradict the experience of young people is because most indicators are taken from surveys at the high level of households, which fail to take account of significant changes in the last decade.

We measure all sorts of living conditions at the household level. For instance, young people's incomes are counted at the household level along with their parents' incomes, which lead to headlines such as "household incomes have never been so good".

And, recently, indicators suggesting Ireland's under 30s have a very low "risk-of-poverty rate" compared with the rest of the EU,
got a lot of coverage in both traditional and social media.

But the explanation for this mismatch is that four in five of the under 30s are stuck living at home, relying on the good grace of their parents: Household-level figures obscure the experience of many young adults in the Irish economy.

Indeed, the reality is that since 2006, the wages of young Irish workers have declined relative to older workers at a faster pace than in any other high-income country in the EU.

Across most occupational groups, including many with a third-level qualification, too many young people are failing to secure appropriate employment to their skills. Over a third of working graduates under 35 are working in jobs that do not require their qualifications and pay less. And inflation will only make matters worse.