Recession is taking its toll on younger generation
Stock Image. Photo: SXC
Tuesday August 04 2009
IT is only a matter of time before people begin to realise that young people are bearing the brunt of the recession.
This creates the risk that there will be a wasted generation -- whose skills and contributions will not find a creative outlet.
The big problem is that unemployment among those under the age of 25 is twice that of other age groups, at 19pc.
For those between the ages of 15 and 19, 26pc are out of a job. More than one-in-five of those signing on the Live Register are under the age of 25.
The situation is grim for graduates, too. Some 56,000 people are set to graduate from third-level colleges this year, but as many as 30,000 of them are likely to end up queuing for social welfare payments.
Graduates normally have a much lower unemployment rate than those without third-level qualifications.
Before the recession, the earnings of those with third-level qualifications were 84pc higher than those with just second-level qualifications.
There is little in terms of social welfare benefits available for graduates. Most will not qualify for Jobseeker's Benefit.
They may get Jobseeker's Allowance, which is means-tested, and an applicant's means must be below a certain level to qualify. If the applicant is 24 years of age or under and living with a parent or a step-parent in the family home, some of their parents' income will also be taken into account in the means assessment for jobseeker's allowance.
Younger people who are lucky enough to have jobs are more vulnerable to wage cuts because of their relative lack of experience. The youngest workers also saw a much sharper fall in average earnings growth in 2008 than other age groups, according to PricewaterhouseCoopers research.
A recent National Youth Council of Ireland survey found that 20pc of young people could not afford to see a doctor, and 40pc were struggling to pay bills. Additionally, younger people trying to get a foot on the housing ladder will have been hardest hit by restrictions in the supply of credit over the past 18 months. And it is not as if the upcoming generation will fare any better. The Government is considering a new student loan scheme that could leave a graduate with between €20,000 and €30,000 of debts when they start working.
If the scheme is put in place, an additional tax of 9pc of earnings could be charged to graduates to pay down this debt.
