Monday Blog: An insecure age

Being ‘young’ today is the same and not the same as it used to be 50 years ago. It is the same because it tends to be associated with growth, development, opportunity, challenge, rupture …. It is not the same because the world as we know it has changed dramatically in the space of two generations. The evidence is clear that standards and levels of education, housing, health and income are a lot better today for the vast majority of people living in this part of the world than they were in 1965.  At the same time, it is an open question if people are any happier or economically secure.  Happiness is hard to measure over time and across different cultures and situations. An educated guess is that people are at least as happy if not more if only because there is more honesty now than was the case 50 years ago (but this may be contested!).

Economic security is another matter. One possible measure of security is the extent to which people can be confident that their income will hold up or increase in the future; or that they will have a decent roof over their head; or that they will have a job next year or a pension income of some magnitude when they retire; or that they will receive the necessary medical and family care when they are sick, or old or out of work and without regular income.  Life was always precarious for most people especially in the domain of income, health and care. However, there seems to be an increase in precariousness among large sections of the population especially those born in the 1980s or 1990s who were the biggest losers in The Great Recession of 2008-2009.  The unthinkable happened in the Republic of Ireland – again – for a third time in 60 years. Emigration was back. Add to this something that had not happened since the 1930s – incomes dropped for most people to a significant extent. The biggest losers were those who lost jobs, businesses or homes (or all three).  Though better off on average in terms of health, education, life expectancy and state backup compared to the very hungry 50’s or 30’s, The Great Recession took its toll on many people.

The case of those born in the 1980s or 1990s is instructive. This was the generation promised a lot by way of opportunity, education, travel, social advancement and a more tolerant and open Ireland, North and South. A lot has changed and changed for the better. Yet, there is a huge level of uncertainty among this generation about:

  • The security of their jobs, incomes and pensions from no matter what source (and the latter should be on their radar even if it is not).
  • Their chances of buying (or renting) a place to live.
  • The cost of feeding, housing, minding, educating and supporting the next generation.
  • The challenge of environmental degradation and climate change.

Other insecurities arise from what is happening in the world from terrorism, ‘wars on terror’ and environmental degradation. For now, these insecurities have been exchanged for insecurities that were prevalent 50 years about a nuclear holocaust. 

The great paradox of modern living is that under the promise of freedom, choice and removal of many areas of market regulation people have been left less secure. Is insecurity the price of higher standards of living and personal opportunity? Does the model of growing and extreme inequality in the USA coupled with greater market choice and freedom provide the template for Western Europeans to emulate?  Let’s admit it – Europe is a lot more prosperous than it used to be but much of the social infrastructure assembled after world war two has been dismantled as the threat of ‘communism’ has disappeared and trade unions and associated political movements have lost a degree of political leverage in many parts of Europe.

One of the results of the vast social and economic changes of recent decades is that the generation born in the 1980s and 1990s are likely to:

  • find it much more difficult to buy/rent accommodation than earlier generations;
  • experience greater precarousness in job profile at the outset of their working lives; and
  • work longer than previous generations well into their 60s and derive much less benefit from an occupational pension if they have access to one.

The differentation of welfare payments by age for new entrants to the live register is a feature of the recent fiscal crisis in the Republic of Ireland.  No attempts are being made to address this difference inspite of modest restorations in some welfare payments.  The extent of unemployment and under-employment constitutes a major social crisis in many parts of Europe. Despite the very welcome improvement in economic conditions in very recent times, youth unemployment and exclusion from the labour market or training still impacts on a large number of young people. Data in the chart below (latest available data are from 2014) shows an unacceptable level of exclusion and waste of human potential in both parts of Ireland with devastating consequences if not corrrected.

The relative absence of concern about the extent of under-employment compared to previous recessions and recoveries is remarkable.

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Tom Healy

Tom Healy was the Director of the Nevin Economic Research Institute (NERI). Tom has previously worked in the Economic and Social Research Institute, the Northern Ireland Economic Research Centre, the Organisation for Economic Cooperation and Development, the National Economic and Social Forum and the Department of Education and Skills.