Generational impact of jobs crisis is an age-old issue
Analysis: The best thing the Government could do for the young would be to end the public-sector hiring freeze
Cyprus’s president, Nicos Anastasiades, talks to Taoiseach Enda Kenny during the recent EU summit in Brussels, at which youth unemployment was top of the agenda. Photograph: François Lenoir/Reuters
The young – always and everywhere – suffer most when jobs markets turn down. Those out of work find it harder to get work owing to their limited experience, and because those in jobs are more tentatively ensconced than their older, more skilled and better-networked counterparts, they are more vulnerable to lay-off when companies need to downsize.
So it has been in Ireland. And because the slump here has been one of the deepest anywhere, the impact on the young has been proportionately greater than most other countries.
Perhaps the best reflection of the generational impact of the jobs crisis has been the changes in the numbers of under-35s at work over the past half-decade compared to those 35 and older.
Among the older group, a relatively small decline in numbers working after the crash has been reversed. As of the first quarter of 2013, there were 1.2 million older people working, just shy of the bubble-era peak. By contrast, fewer than 650,000 under-35s were in employment, down by a massive one-third from the one million at work in 2007.
Among the under-25s – the group upon which this series of articles focuses – the impact has been even greater. As the graphic illustrates, the number of that age group in employment at the end of last year was down by more than half compared to the beginning of 2007, when talk of recession was still distant. Over that period, only in Spain and Greece have the young been squeezed out of employment to a greater extent.
Worse still for Irish youth, the broader turnaround in the labour market since the middle of last year has not benefited them. While the total number of people of all age groups at work in the economy rose for three successive quarters up to the first three months of 2013, the number of under-25s in employment continued to fall.
What has this meant for youth unemployment? As the accompanying box explains, this is not as straightforward as it might seem. That said, out of an all-age group total of 292,000 people who are formally unemployed, just over one in five is under 25.
What of the Government’s response to the youth unemployment problem? The first thing to note in any such discussion is that scope for action is limited. Most jobs are created by private companies. If businesses are facing difficult trading conditions, they simply won’t hire. Trading conditions have been brutal for most businesses since 2008.
It is true that governments can spend money on incentivising private-sector job creation, but the evidence on such schemes is mixed at best. Besides, given that the Government is so cash-strapped, the scope for incentivising private-sector employers to take on more workers is limited in the extreme.
Having noted the constraints, the Government has not been sitting on its hands. The many measures in its Action Plan for Jobs have helped – to some extent at least – everyone’s job prospects, including those of the young.
Of the measures targeted at youth unemployment specifically, the National Internship Scheme – or JobBridge – has been the centrepiece of the Government response. It has been in existence for exactly two years, but its efficacy is uncertain.