Pandemic has hit younger workers hardest
Young adults have been disproportionately hit by the labour market impact of the COVID-19 pandemic, according to new research published today by the Economic and Social Research Institute (ESRI) that is funded by the Community Foundation for Ireland.
This shows 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 per cent below its pre-pandemic level for those age 15-34 compared to just 6 per cent below for those age 35+.
The research warns that these job losses could compound the still-lingering effects of the financial crisis, which left almost a third more 20-24-year-olds not in employment, education or training (NEET) than in 2007. Earnings have also stagnated for young adults entering the labour market in recent years, with workers in their early 20s earning less in the 2010s than they did in the 1990s or 2000s (adjusted for inflation).
The findings form part of a new report titled “Poverty, Income Inequality and Living Standards in Ireland” which will be published in full this coming Friday (14 May 2021).
The research also finds that a growing share of young adults are facing high housing costs relative to their incomes. This is in part because home ownership rates for young adults have collapsed, from 61 per cent at age 30 for those born in the 1960s to just 32 per cent for those born in the 1980s. As a result, increasing numbers of young adults are exposed to the private rental market where long-standing affordability issues have been exacerbated by rapidly rising rents.
Barra Roantree, an economist at the ESRI and an author of the report, said:
“These findings should be 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.”
Denise Charlton, CEO of The Community Foundation for Ireland added:
“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.”