ESRI study suggests that because of stagnant wages and expensive housing young people in Ireland face lower living standards than previous generations
The Economic and Social Research Institute (ESRI) has released its latest study in which it makes a number of findings and concludes that because of stagnant wages and expensive housing, young people living in Ireland face lower living standards than previous generations. These findings form part of a wider report entitled Poverty, Income Inequality and Living Standards in Ireland.
The ESRI found that earnings have flat-lined for young people entering the Irish labor market and that workers in their 20s are earning less than they did in the 1990s and 2000s. The ESRI links this to the lingering effects of the great financial crisis as well as the economic fallout from the COVID-19 pandemic. It noted that 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 ages 35 and older.
The lower earnings growth and the disproportionate impact of the pandemic on young workers reflect the fact that they are more likely to work in retail, hospitality, arts, or leisure sectors, which have relatively lower wages and have been most adversely impacted by the current restrictions. The ESRI warned that it could take 10-15 years for the current trend of stagnant wages and unemployment to fade.
With significantly low wages, younger workers in Ireland are further compounded by the current housing market. The ESRI outline that homeownership rates for young people have collapsed which leaves only the option to rent and unfortunately, renting costs are on the rise. In fact, most end up paying more than 30% of their disposable income on rent.
The ESRI found that while more than 60% of those born in the 1960s lived in a home that they owned, or their partner-owned, by the age of 30, this had fallen to 32% for those born in the 1980s.
ESRI economist Barra Roantree commented that in order to minimise the effect of these findings, “policymakers should ramp up capacity on high-quality training programmes in the months ahead.”
Click here to download the full report.