Holly Cairns’ opening salvo strikes an economic chord

Combined impact of housing crisis and stagnant wages highlighted by 2021 ESRI study

It might have the hallmarks of a trite, political soundbite but Holly Cairns’ comment in her first Dáil contribution as leader of the Social Democrats – “I’m a member of the first ever generation who will be worse off than my parents” – is more grounded in economic reality than some would like to admit.

It is, more or less, fair to say, as Irish Times columnist Finn McRedmond pointed out recently in her response to Cairns’ comments, that wealth and wellbeing “extends beyond immediate material factors”, even if they are necessarily and fundamentally conditioned by those factors. But while McRedmond concedes that “life isn’t particularly easy for Ireland’s young people”, citing soaring rents and house prices, she also points to social progress and the “technological advances” such as “smartphones” as among the many reasons to be cheerful.

The point about social progress is well taken. But it isn’t just, as she says, that young people face a “hostile and unforgiving” property market or that they’re “anxious about home ownership”. It’s that, as ESRI economists Barra Roantree, Bertrand Maître, Alyvia McTague and Ivan Privalko pointed out in a 2021 study on intergenerational inequality, a combination of economic issues – the increasing prevalence of low pay (and you might add precarious work) for young workers as well as the stagnation of earnings for this cohort since the last recession – mean that this generation really will be the first to be worse off than their parents and not just in a “narrow sense”, as McRedmond suggests. That’s even allowing for the boom-bust nature of Irish economic reality over recent decades. Remarkably, the study shows that adjusted for inflation, “average weekly earnings for workers born in the 1990s were no higher than for those born in the 1960s at ages 20 to 22, and had by age 26 yet to surpass that of either the 1970s or 1980s cohort”.

Economic facts such as these comprise the bedrock of social and political life and pointing them out isn’t a question of pessimism or optimism. It’s more so a question of diagnosis and treatment. Trends, after all, can be arrested and often reversed by well-directed policy. As Roantree and company pointed out nearly two years ago, policies that tackle the “root causes” of high rents and the provision of “high-quality active labour market programmes” would be particularly helpful in that regard.