A Lost Generation?
Read more about: Economy, Features, Fianna Fail, Irish Politics, Parties 
Budget 2010 has drawn outrage from most sides but perhaps a word should be devoted to the 20-24 year olds. For younger people it looks like you take any job your offered or face a cut in your jobseekers allowance. This is despite many going to college – as instructed and incetivised to do – and getting a qualification in hope of contributing to growth sectors of the economy.
Wednesday’s budget decided that young people hanging about on the dole need incentives to work. That incentive takes the form of a hammer. Take a look at the measures:
Now bear in mind that this is disproportionately focussing on the under 24s. Everyone is looking for work at the minute, for most young people there is next to nothing. Younger applicants face two major obstacles in seeking employment in a downturn:
1) experience – they are usually unlikely to have sufficient experience to place them at the forefront of candidates
2) competition – in the downturn which as seen engineers, architects and trainee legal-eagles laid off many are competing with highly qualified, older and experienced graduates for places.
There is a sop to FAS courses – more money for an organisation with a patchy track record of spending it but little by way of some sort of work placement scheme. People on welfare are prohibited from working for free – the state cannot subsidise employers – however for many young people their best bet of getting experience and work are internships and work experience programmes.
The current formula of words suggests if you refuse any job offer you are off the dole.
That is why we are making the following targeted changes:
- for new applicants, the rate of Job-seekers Allowance and Supplementary Welfare Allowance for persons aged 20 and 21 years of age who have no dependent children is being reduced to €100 per week and for those aged between 22 and 24 to €150 per week; and
- for all other cases, the rate will be reduced to €150 per week where job offers or activation measures have been refused.
Fair enough in principle but in an economy with a dearth of jobs it puts younger people in the invidious position of going for the first offer you get irrespective of what job it is. The FAS schemes are over-subscribed (anecdotally – many of my friends are in the position of trying to get on one) by a substantial margin. Even then, when you get one, what are you training for? The jobs aren’t there.
The idea of work experience is a very important one. A paper drawn up by Yale Univseristy(html – here is the PDF) suggests that youth unemployment (we have 83,362 people under 25 on the live register – 20% or so of the total) presents significant long term structural economic problems.
Primarily this is pronlonged wage depression for those at 22 who experience 26-week unemployment (a norm for many in the current climate) where low wages are accepted in lieu of ‘training on the job’ and lost experience. That can persist as a differential over a period as long as 10 years of effectively playing catch up. The training differential is significant and requires targetted state consideration – training for a purpose is vital over the unemployed period, alongside work experience programmes.
There is also an increased risk of prolonged unemployment for those who are returning to work. That might be explained by a last-in-first-out approach as well as experience and training gaps. Ultimately this budget did little to address this burgeoning problem. FAS is the only outlet for the 80,000 unemployed under 25s.
The signal for many young people was simple. Leave. Don’t look back, head away. Its understandable that the response is such – young people emigrating is a tap to vent pressure on government spending. It is also a guarantee that we lose another group of people to overseas.
This raises questions – already brought up in the Seanad – of the scale of state investment in education only to see it recouped overseas. Trainee nurses cost the state thousands of euro to educate – and rightly so. But at present we are exporting them. More will follow. Whatever about the dilemma of taking that coffee shop job, there aren’t 80,000 jobs out there for young people. And following this budget there won’t be for a while.
There’s shocking generational inequity in that budget.
The blind and the young are apparently so much less deserving than the old.
Note you the argument for large increases in the OAP in previous years (“but we built the Celtic Tiger, so we deserve a share in the spoils”) has now been neatly turned on its head (“well we had nothing to do with that bubble and its bursting so we must be shielded from the cuts”).
No the message is not leave and don’t look back. The message is that we need young people to do their patriotic duty and to do something that spoilt celtic tiger pups never thought they would have to do. Be in the “invidious position of going for the first offer”.
Sure it might not be the dream job but it is better for the economy for a young person to be getting minimum wage in a low skilled mundane job than sitting on the dole draining a limited tax pool. The difference between the old and the young is that 40 years ago the OAP did the cr@ppy job for sh1tty wages. The OAP has paid their dues and contributed far more to the tax pool than they have taken out.
There is an attitude among many young people that I did a degree I’m not flipping burgers. Well fine don’t flip them so but we paid for that degree so morally you now owe us something in our time of need. If you choose not to help after we invested tens of thousands in your education for the last 15 years then don’t be surprised if we reward that ingratitude by turning off the tap. In my opinion €100-€150 is too much for such an ungrateful pup.
Ask not what your country can do for you. Ask what you can do for your country. Get off the dole and flip burgers for two years. If you aren’t willing to do that then I’m quite happy to say the message is “Leave! And don’t let the door hit you on the arse on the way out”
@Colm
The difference between the old and the young is that 40 years ago the OAP did the cr@ppy job for sh1tty wages. The OAP has paid their dues and contributed far more to the tax pool than they have taken out.
Well maybe some did, but there are plenty who didn’t .. who had a lifetime on welfare, or were self-employed and paid very little tax. Or are pulling in more now on a public service pension than they ever earned during their careers. After maybe cashing in their property chips at just the right time.
But there’s one sure thing we can say about those ungrateful pups of whom you speak. They’re one of the few groups in this society who really had no culpability in the inflating or the bursting of the bubble. Unless you think the teenage Drummies’ spending in Abercrombie & Fitch was a major factor in the bubble economy?
If you aren’t willing to do that then I’m quite happy to say the message is “Leave! And don’t let the door hit you on the arse on the way out”
Ah, the sweet music of ladders being pulled up after one’s own ascent. The insider-outsider model is alive and well.
Which, Colm, is a recipe for employers taking advantage of young people: are we going to see architects and doctors forced to work professionally for minimum wage? Not to mention the problems of professional development, getting the experience you need to practice independently and so on.
“The OAP has paid their dues and contributed far more to the tax pool than they have taken out.”
That may or may not be true. Depends on the OAP. Maybe they spent their life dodging taxes. Or maybe, as so many did, they fucked off to the UK for a decade or two until the economy here picked up.
The rational decision for a young, highly trained person is to migrate to where they can get decently paid jobs. Watch them go.
The rational decision for a young, highly trained person is to migrate to where they can get decently paid jobs. Watch them go.
And watch the dependency ratio among those left behind inexorably rise.
Until eventually even the grey vote won’t save the OAPs from cuts, because there will be too few decently-earning young pups left behind to carry the cost.
This sort of reverse Logan’s Run strategy is not even in long-term interests of the pensioners themselves.
Proposition Joe:
Actually the number of OAPs who sat on the dole for 40 years or were self employed or paid no tax is tiny. The OAPs worked through an Irish economy that was far worse than anythign we are experiencing today. The miniscule number who sat on the dole or didn’t pay tax is tiny in comparison to the number to whom we owe a great debt. In fact the number will be so low I’m surprised you haven’t cited the number of young people who left school at 12 and thus didn’t cost the state too much. It’s a similar argument
Certainly you’ll find the number of young people who have not availed of a very expensive free education will be very small. Maybe they didn’t contribute to the bubble but had they paid for their college education like they do in most other countries then maybe the country would not be quite as broke as it is now.
Colman:
Whats wrong with architects and doctors forced to work professionally for minimum wage? If that’s the going rate then perhaps ordinary working people will be able to afford to avail of their services. There is an argument that after availing of the most expensive education in the state then Doctors should work for low wages in a public health system for a number of years to pay back that debt to society.
We need people willing to roll up their sleves and get stuck in to the hard work. If they don’t want to do that then they can follow their heros Jedward off to the UK in search of a quick buck.
@Colm
Maybe they didn’t contribute to the bubble but had they paid for their college education like they do in most other countries then maybe the country would not be quite as broke as it is now.
At most half a billion could be raised in college fees. Or just about twice what was given away to the publicans and drunks across the land in the last budget.
The knock-on effect off fees in the form of reduced consumption tax yields and declining third level participation rates would eat up most of that “gain”.
It’s worth distinguishing OAPs from public sector retirees. The bigger mystery is why the latter were protected given the earnings link to the pensions. Apparently the upwards only rent reviews of the Celtic Tiger have a parallel in upwards only public sector pensions.
The solution to youth unemployment (and the consequences of missing out on job experience) is simple: make it cheaper for employers to employ them. How do you do that? Firstly you get rid of the minimum wage (which is simply a tax on small businesses who might otherwise compete with large businesses and reduce their profits).
Secondly don’t pay social welfare to able bodied young men and women without dependants who have never contributed a cent in taxes in their lives. That way labour supply and labour demand will more likely mean less youth unemployment.
Assuming you’re really serious about tackling the problem rather than indulging in a student union debate style ‘bash the capitalists’ rant. Though that can be fun too …
BTW: I haven’t met a single private sector worker who was ‘outraged’ by the budget. Most were very happy with it. Or are we all indulging in confirmation bias?
@Gerard O’Neill I do rather like the idea of youth slums spreading around Dublin as the penniless young people seek shelter from your delightful little utopia, but I’m sort of concerned at things like crime rates, disease, that sort of thing. At least it would reduce the price of prostitutes, though that might screw up your “without dependents” proviso rather quickly.
And I’m a private sector worker – actually, small business owner – who’s outraged by the budget. But that’s because I indulge in silly student union things like “empathy”. Not to mention rather wondering how people are going to buy my clients’ stuff so they can pay us.
@Colm you can’t do the free-market thing on one hand and then expect people to act irrationally on the other. If I’ve trained as a doctor and some nice person in a distant land is willing to pay me a reasonable wage to do some doctoring then I’m out of here if the alternative is minimum wage here. Screw patriotism, especially when the state is making it perfectly clear it doesn’t give a crap about me.
Colm, those same OAPs in the main have now voted twice in their lifetimes for FF governments who have bankrupted the country. I think that they could bare to take at least some of the hit. They don’t have mortgages and according to Colman on another post they hardly eat at all.
Re: the minimum wage I think that there is some merit in the idea of looking at or debating the consequences of reducing the minimum wage but only for new employees. There again, we were shockingly bad at policing the existing employee protection legislation that was out there vis-a-vis GAMA and the like so while the idea in principle has merit it would also be very open to exploitation.
On the side of political organisational side of this, I wonder if we might see someone mobilise the under 25s in a positive way that would give them future leverage.
Eh ….what is the point in throwing money at unemployed 20-24 year olds when all they will do is drink themselves stupid with it ????
The reality is that there are people who need and appreciate the money much better than them !!