Lost generation will find no hope in Government's plans
Published 09/12/2012 | 05:00
Graduate unemployment is at nearly 40 per cent, but the young don't vote Fine Gael, so they are left out, writes Stephen Donnelly
I've a very bright young man working for me at the moment. He's 25, has a master's degree, a strong work ethic, and a desire to see his country get out of this mess. A few hours after the Budget was announced last Wednesday, I asked him for his reaction. He said: "I hope they're not going to tax Ryanair flights to London."
He saw nothing in the Budget for him, his friends or his generation. He saw higher taxes, higher education costs, and nothing meaningful in the area of most concern – jobs. Like many others his age, he saw his future moving away from Ireland.
He's not alone. Many young people in Ireland feel they've been abandoned by successive governments who will not, or cannot, understand the set of challenges they face. Their chances of finding work have been falling for years.
The Government is making great play of the latest unemployment figures, which show a fall of 0.2 per cent in the past year. With a straight face, this is heralded as a sign of economic recovery. But they're not explaining that fewer people are signing on for one simple reason: emigration. The reality is that there are 35,000 fewer people at work now in Ireland than there were last year. Compared to 2009, there are 325,000 fewer people at work.
This fall in available jobs is hitting Ireland's youth particularly hard. Demand from employers is shrinking as the number of school and college graduates is growing. The Croke Park deal is partly responsible for the demand-side problem. Existing workers are protected, and the embargo ensures this generation is denied entry into the country's biggest employer.
On the supply-side, the number of college graduates has increased by about 40 per cent since 2008. A tribute to our third-level system to be sure, but this mismatch in supply and demand has been catastrophic for school and college leavers. While the total unemployment rate is horribly high at nearly 15 per cent, for under 25s it is 25 per cent and, according to the Union of Students in Ireland, nearly 40 per cent for graduates.
As if that weren't enough, employers believe the value of Irish graduates is falling. They are aware of the recent OECD report, which showed that, for 15-year-olds, Ireland has had the biggest fall in educational standards in the developed world in a decade. Employers are also seeing our universities tumbling down the world rankings. The head of HR for a leading US multinational here told me that the standard of graduates in his sector was falling to the point where they were "becoming unemployable".
And if they end up unemployed, as so many of them now are, they are discriminated against. The weekly social welfare rate of €188 is actually €144 for those under 25, and €100 for those under 22. It's no wonder that the Ryanair exit strategy seems so appealing to Ireland's youth.
Budget 2013 was a great opportunity to address the needs of this generation. It was squandered. There was little in the way of jobs stimulus. €175m for a venture-capital fund sounds good, until you see it's €175m over 10 years. Or €170m in public sector 'increments', next year. In fact, due to the past four years' increments, Budget 2013 actually includes €700m in increased public sector wages. That's 40 times more than the venture capital fund. If you want to see where priorities lie, follow the money.
The Budget not only failed to help Ireland's youth, it has given them a kicking too. Those under 25 on vocational training schemes like Fas, will get less funding than those aged 25 and over. College fees will rise €250 each year for the next three years (they'll be €2,500 in September 2013), while the income threshold for the college maintenance grant has been lowered.
Other costs will rise – the new seven per cent PRSI charge on rental income (a stunning example of policy stupidity in its purest form) will force up rents, as will the Local Property Tax. Budget 2013 also cuts funding to higher education by a further €25m. That's in the context of a 50 per cent fall in State funding per student between 2008 and 2015.
The question begs to be asked: why have two successive Irish governments abandoned an entire generation? Research does show that the youth, and the 'recently young' are the first generations in the history of the Republic to break from tribal voting patterns. They tend to vote on issues and candidates rather than the political preferences of their parents and grandparents. So maybe the political parties know this, and their unspoken mantra is "the youth don't vote for us anyway, so to hell with them".
Or maybe the problem is that the Economic Management Council of the Taoiseach, Tanaiste and two Finance Ministers, with an average age of 61, is just too far removed. That would go some way to explaining previous bizarre comments about youth emigra-tion being a "lifestyle choice".
Whatever the reason, a generation is being abandoned by the State. They need help. And fast. A few months back, I met with a labour market expert at the IMF. He talked me through research findings which showed that when a generation graduates into a recession, it never recovers.
For the rest of their lives, unemployment in this group remains high, and their standard of living never catches up with the rest of the population. The people leaving school and college since 2008 did not cause this crisis, in any way. Yet they will end up paying more for it than anyone else.
Michael O'Leary was vocally opposed to the Gathering at the start of the week. With Budget 2013, the Government has made it up to him, by providing him with an entire generation to take off our hands.