Two reports on similar aspects of the Irish economy have reached the same conclusion – the economic downturn has hit those in the younger age groups hardest of all. Those aged under 45, a research paper from the Economic and Social Research Institute has found, have been far more adversely affected by the property crash and the recession than those over 45. This finding confirms what, intuitively, many may have assumed, but could never clearly establish. The paper's author, Professor Petra Gerlack-Kristen, validates that intuition, by measuring and quantifying the differences in income and lifestyles during the boom and bust period.
By 2009/10, those under 45 spent a fifth less each week than five years earlier, while those over 45 spent almost a third more over the same time period. Those in the older age groups enjoyed a 41 per cent increase in real incomes, and those under 45 experienced a 14 per cent fall. The income divergence that has emerged between both groups reflects the very different impact that unemployment and the jobs crisis has had on each. Higher unemployment levels among the younger age group has been further compounded by higher rates of mortgage arrears and negative equity in comparison with those aged 45 and older.
The National Economic and Social Council (NESC), in a separate report, presents a similar and equally disturbing picture. It too points out the negative impact of recession on the young, who have been most deeply affected by the jobs crisis. National unemployment remains close to 15 per cent, youth unemployment is still above 30 per cent – albeit depressed by emigration - and with large regional variations.
In Limerick, the figure is 50 per cent, just above Donegal (49 per cent) and Wexford (47 per cent). What emerges clearly from both studies is the high price paid by those in the younger age groups for the financial crash, and for the necessary fiscal adjustment that has followed. The high rate of youth employment now risks the creation of a jobless generation, with worrying social consequences.
In the fiscal adjustment required to bring the public finances back into balance, those in the younger age groups have, as these studies have indicated, shouldered a disproportionate burden. All too often the interests of those in existing employment – whether in the public and private sectors – have been secured and protected, with less concern shown for those seeking employment. As the NESC report has stated, some people have experienced a “catastrophic change in their circumstances” due to the economic crisis. The Government, in planning the 2014 budget in the months ahead, now needs to strike a better and fairer balance between those young adults for whom the economic downturn has been a life-changing experience, and those in the older age groups who have been less severely impacted by recession.