Words: Emily Mullen
An ESRI study shows that stagnant wages and costly housing have contributed to lower living standards for Millennials
A combination of stagnant wages and expensive housing has meant that Millennials in their 20s and 30s are financially worse off than their parents, a study conducted by the Economic and Social Research Institute (ESRI) has shown.
The research found that a “growing share” of young people are facing a high housing cost relative to their incomes. The rate at which young people are buying their own homes has “collapsed”, down from 61% at age 30 for those born in the 1960s to just 32% for those born in the 1980s. This drop-in homeownership is “exacerbated” by the rapidly rising rents in the private rental market.
Rising rents and a drop in homeownership has been compounded by stagnation of wages, the report found that young people entering the labour market since the 2010s are earning less than those in the 1990s or 2000s did.
The report that’s titled “Poverty, Income Inequality and Living Standards in Ireland” also looked at the impact the pandemic has had on youth unemployment and found that the job losses caused by it “could compound the still-lingering effects of the financial crisis”.
The study found that there were 112,000 fewer 15-34 year olds in paid work in the final quarter of 2020 than a year earlier, compared to 93,000 fewer workers aged 35+. Proportionally, employment was 14% below its pre-pandemic level for those age 15-34 compared to just 6% below for those age 35+.
Economist with the ESRI and author of the report Barra Roantree has called these findings a “cause of serious concern. While the most serious medical impacts of COVID have been on older people, it is clear that the greatest impact in the labour market is being felt by younger workers.”
“To minimise the potential ‘scarring’ effect on young adults, policymakers should ramp up capacity on high-quality training programmes in the months ahead. Policies that act to tackle the root causes of high rents will also disproportionately benefit younger adults who risk otherwise being left behind,” they added.
CEO of The Community Foundation for Ireland Denise Charlton said, “these findings coupled with those which will be published with the full report on Friday provide important information for policymakers as the country begins to emerge from the COVID-19 pandemic. They provide evidence on which decisions can be made to ensure that we plan for a recovery which will be both equitable and fair.”
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