A new ESRI report says the effects of the pandemic on young workers’ finances should be ‘cause for serious concern’.
The pandemic has affected younger workers in Ireland more than any other cohort, according to a new report from the Economic and Social Research Institute (ESRI).
Comparing the final quarters of 2019 and 2020, it said that Q4 2020 had 112,000 fewer 15 to 34-year-olds in paid work. In the same period, there were 93,000 fewer workers aged 35 and above than in Q4 2019.
Employment also dropped 14pc below pre-Covid levels for those aged 15 to 34, and dropped by 6pc for those 35 and over.
These findings are part of a full report set to be published later this week. Ahead of its release, ESRI says these job losses for younger people “could compound the still-lingering effects” of the 2008 financial crisis, when the number of unemployed 20 to 24-year-olds grew by almost one-third from 2007.
Combined with the fact that earnings have stalled for young people entering the workforce in the past few years, which has left employees in their early 20s earning less in the 2010s than in the 1990s or 2000s, ESRI economist Barra Roantree said the findings “should be a cause for serious concern”.
“While the most serious medical impacts of Covid have been on older people, it is clear that the greatest impact in the labour market is being felt by younger workers,” he said.
“To minimise the potential scarring effect on young adults, policymakers should ramp up capacity on high-quality training programmes in the months ahead. Policies that act to tackle the root causes of high rents will also disproportionately benefit younger adults who risk otherwise being left behind.”
ESRI’s research was funded by The Community Foundation. Its CEO, Denise Charlton, said the findings should provide important information for policymakers as the country begins to emerge from the Covid-19 pandemic.
“They provide evidence on which decisions can be made to ensure that we plan for a recovery which will be both equitable and fair,” she added.
The impact of the pandemic has also affected young workers in terms of tax, according to Taxback.com’s Marian Ryan, as many faced a tax bill after receiving the Pandemic Unemployment Payment (PUP) or the Temporary Wage Subsidy Scheme (TWSS).
“This report is certainly concerning and it brings to mind another issue we are finding amongst the young adult age group at the moment, which is that thousands of them were put on either the TWSS or the PUP last year and while they may have an outstanding tax liability as a result, anecdotal evidence would suggest to us that a very significant proportion of these young people are not aware of this,” said Ryan, a consumer tax manager at the company.
“Any tax bill is going to come as a big and perhaps worrying shock to these taxpayers who, as the report states, have already been significantly adversely impact by the pandemic when it comes to their financial affairs.”
ESRI’s report, called Poverty, Income Inequality and Living Standards in Ireland, will be launched at an online event featuring Roantree, Charlton, Senator Lynn Ruane and One Family’s Karen Kiernan on Friday 14 May.