The group most hit by the financial crisis and then, a decade later by Covid, young people are the most certain to be hit by increases in the cost of living. More than any other section of the population, their wages have failed to keep pace with inflation (under 21s already experienced a 20% fall in income between 1999 and 2013, though, with more staying in full-time education in response to the pandemic, over a third of under 25-year-olds are not in the workforce anyway). The raising of the National Insurance threshold will at best only counteract the earlier increase in the NI rate.
According to recent research from the Intergeneration Foundation
the under 30s now spend 45% of the incomes on ‘basic necessities’ like housing, food and transport – up from 35% in 2000-2001. Most significant has been the effect of increased rents (According to IF, up by 35% in real terms for those under 30 during the last 10 years). Young people, that’s unless they own an SUV of course, are also the least likely to benefit from the cut in fuel duty.
There’s nothing in the Chancellor’s statement that even acknowledges young people’s situation. On the contrary, a month or so before, he announced plans to reduce the threshold for repayment of student loans. While youth unemployment has fallen since the pandemic, much of this has been the result of more students now taking up part-time work in sectors like hospitality, replacing the thousands of Eastern European workers who’ve gone.
NEET numbers (see post below) remain high. Government has promised more and better apprenticeship opportunities, but is not able to deliver them, while the Kickstart programme aimed at those young people who lost jobs during the pandemic has been wound down – it hardly got off the ground.
More significantly young people now entering the labour market face long term changes – as the number of ‘precariat’ jobs increases in proportion to permanent ‘core’ roles and more and more people are forced into ‘self-employment’. With a third (and probably the worst yet) recession on the cards, an alternative economic plan not a Spring Statement is needed.