Friday, 1 April 2016

Inequality and the Millennial Generation

Rory Hearne: A global debate is taking place about the plight of the Millennial Generation and the ‘intergenerational inequalities’ they face. This also starting to receive some attention here in Ireland. The Millennials have suffered a significant level of ‘generational inequality’ in regard to a disproportionate impact from the recession and austerity. This includes higher unemployment rates, higher increases in rates of suicide and self-harm and higher emigration rates.

The Millennial Generation, otherwise known as Generation Y, are those born between 1980 and 1994 –mostly in their 20s and 30s now. The Guardian newspaper recently ran a series of articles on ‘The Trials of Generation Y’ where it described how they face “a perfect storm of debt, housing and joblessness.”

It outlined how they face “high unemployment in Spain and Greece, debt and stagnant wages in the US” and in the UK they face “high house prices locking them out of home ownership and into extortionate, dismal rental arrangements”. They have also been referred to as the Jilted Generation - set to be the first generation to do worse than their parents. Studies have also shown this generation to suffer from higher levels of anxiety than previous generations.

The high profile satirical comedians from Limerick, the Rubberbandits, recently described the impact of this phenomenon in Ireland on Channel 4 News. They explained how the recession “has stolen their 20’s” from young people in Ireland and this has resulted in “huge amounts of suicide, jumping into rivers, and emigration”. They believe that for “a lot of young Irish people, they don’t see a future.”

In regard to suicide and self-harm, the International Journal of Epidemiology published a paper last year by UCC based researchers which concluded that “economic recession and austerity in Ireland have had a significant negative impact on rates of suicide in men and on self-harm in both sexes”. They found that this was caused by factors related to austerity, including reductions in public expenditure, cuts to welfare, substantial healthcare cuts, falling house prices and personal debt. They found that by the end of 2012, the male suicide rate was 57% higher than if the pre-recession trend had continued while male and female self-harm rates were 31% higher and 22% higher than the pre-recession levels respectively. This meant 476 more male and 85 more female suicide deaths, and 5029 more male and 3833 more female self-harm presentations to hospital, in the period between 2008 and 2012 than if pre-recession trends had continued. And the greatest impact in suicide and self-harm was observed in the younger generations (for men it was amongst 25–44 year-olds and for women it was amongst 15–24 year-olds).

Meanwhile Chart 1 shows that the youth  unemployment rate (for those aged 15-24) hit its highest point in the recent recession of 30% in 2012. This was double the highest rate hit by the general unemployment rate (for those aged 15-74). And while the general unemployment rate has fallen to 8.8% youth unemployment is still an extremely high 20.1%. This is significant when the social welfare reduction for those under 26 still remains in place (with those under 25 on €100 versus €144 for 25 year olds and €188 for those over 25).  
Chart 1 Seasonally Adjusted Unemployment Rate for 15-24 yr olds and 15-74 yr olds 

Source: CSO

Meanwhile in terms of emigration, we can see from Chart 2 that the numbers of Irish emigrating is still substantially above the pre-recession levels. In 2008 13,000 Irish emigrated but the impact of the recession saw that figure climb to 50,000 in 2013. Last year (2015) 35,000 emigrated which is almost three times the pre-recession level.

Chart 2 Numbers of Irish Emigrating 2006-2015 

Source: CSO

Chart 3 shows  that the greatest levels of emigration in this period was from the 15-24 age group category who experienced a net migration of minus 20,000 per year between 2011 and 2013 (i.e. a net loss to emigration). This is in contrast to a net migration of between minus 1,800 and 1,000 in those same years for those aged 45 to 64. Last year there was a net migration of minus 15,000 young people. This was five times the level of net migration for those aged 25-44 and 30 times the rate for those aged 45 to 64. Generation Y has clearly been hardest hit by emigration.

Chart 3 Net Migration from Ireland for various age groups 2008-2015

Source: CSO

There are a number of factors which are likely to have influenced these higher levels of unemployment and emigration amongst the younger generations. These include the impact of the public sector recruitment moratorium, lower pay rates for new public sector employees, a general trend toward the casualisation of new employment, an unprecedented housing crisis and exorbitant child care costs.

The public and civil service (e.g. guards, nurses, teachers, civil servants) have traditionally been a large source of employment for new college graduates and school leavers but it was effectively shut off to young people as a result of the public sector recruitment moratorium introduced in 2009. It was continued until last year when it was lifted.

The impact of the moratorium can be seen in the dramatic fall in numbers employed in the public sector from 369,000 in 2008 to 327,100 in 2015 (see Chart 4 below). The result is that generation Y has effectively been shut out of the public sector. We now have the situation where the average age of staff in the Civil Service is close to 50 and just 4 per cent are under 30.

Chart 4 Public Sector Employment Numbers 2008 to 2015 (excluding semi-state bodies)

Source: CSO

Another aspect of generational inequality is the situation whereby new entrants to the public sector since 2011 are on a 10% lower pay scale than those employed prior to 2011 (this is on top of the other pay reductions applied to all public sector employees).

This issue was raised at the teacher’s conferences this week where it was explained that the inequality and unfairness of this ‘two-tier’ pay scale is resulting in young teachers being able unable to afford rents, being forced to emigrate, having difficulty getting mortgages and cannot plan their lives.
Younger employees have also faced a growing problem of ‘casualisation’ or ‘precarious’ work situations. This is where workers are employed on short term and temporary basis – often for a few months, a year, or a limited number of hours per week. This has become a very serious issue in third level colleges where younger researchers and teaching staff increasingly have little job security with impacts on academic standards (including the issue of restricting academic freedom) and on their ability to give sufficient time and attention to students.

This problem of precarious and low paid work is extending out to affect younger workers across the economy. It is part of well identified ‘race to the bottom’ where some employers try to reduce wages, hours of employment, benefits, and job security in order to cut costs or maximise profits. The most extreme form of casualisation has been experienced by young workers forced into exploitative unpaid internships and activation schemes such as Job bridge where employers are effectively taking advantage of cheap labour. Documented cases of this include the hiring of restaurant staff and even teachers, community workers and psychologists.

There is a clear need for a greater examination of the extent to which these trends of casualization and lower pay that emerged in the recession are continuing in the recovery. There is also a need for a greater focus on the legacy impact of the austerity years on generational inequality (particularly youth unemployment, casualisation, low pay, and housing affordability) in Ireland and the policies that must be implemented if we are to seriously address it.

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