University Or Not, Young People Have It Stacked Against Them
Despite a long overdue glimmer of hope in today’s employment statistics, it’s commonly known that the past decade has been unprecedentedly miserable for wage growth. Recent estimates suggest that it will not be another four years before wages return to their pre-crisis peak for the average worker. Yet, look beyond the headlines and certain demographics are doing better than others. One of those having a particularly rough go of it is the young.
Said intergenerational inequality is perhaps the buzzword of wonk circles at the moment. Mention it to your mate with postgraduate degree from a Russell Group University who now works in marketing and lives with his parents, he’ll tell you that you’re spot on. Mention it to your Nan one family Sunday, she’ll tell you to get a grip and stop spending money on your smart phone.
Put the potentially polarising politics to one-side and there are genuine reasons to be concerned about the living standards of the UK’s young population. From 2008 to 2017, the real-terms hourly pay for all UK employees decreased by 2.1%. For those aged 22 to 29, the decrease was more than double. Research CLASS conducted at the beginning of this year found that around 40% of 18 to 24 year olds felt they did not earn enough to keep up with the basic cost of living.
Whilst a solid indictment of the UK labour market, that statistic should not be particularly surprising. Those aged 18 to 34 account for half of those on zero hours contracts or in agency work. They are more likely to be engaged in part-time work or in low-paying sectors than previous generations. As a consequence, there is a predictable crisis of confidence for young people in the UK labour market.
University can, and still often is, a route to a better paying job. Unsurprisingly, graduates have higher levels of employment and earnings than non-graduates. Yet, data from 2016 shows that almost half of UK graduates were working in non-graduate roles, while a 2017 survey of graduates found that over 70% felt underemployed or under-utilised in a graduate level role. If your parents had low-skill jobs when you were going up, it’s about 40% more likely that you’ll be in a non-graduate job after university.
My cousin is contemplating applying to university at this very moment. Her parents are what you would consider low-skill workers; she is less likely to get a high paying job as a result of her background. While the experience of university should not be reduced to the financial return you receive upon completion, it is justified to question whether it is worth accruing in excess of £50,000 worth of debt in the process.
Those who do not pursue a university education (which still represent the majority of young people) still face a UK economy scarred by low productivity and endemic low-pay. So what are the good options? It is clear that the kind of rising employment we have seen over the past couple of years is not a marker of good quality employment.
A rebalancing of power between employee and employer would be a good start. Young workers are more trusting of trade unions yet suffer from a lack of information about them. Repealing the Trade Union Act 2016 which would permit unions to speak to employees in their workplace would be a sensible place to start.
Transitioning away from a relationship based on one-sided flexibility that benefits employers and not workers should also be an imperative. This would involve abolishing zero hours contracts, as we have previously argued, or, at the very least, offering fixed hours contracts to those who want them. Yet, policy tweaks miss a fundamental point about the need to restructure the UK economy in an era of ‘routine-biased technological change.’ Without investment in good quality jobs (ideally green ones), young people will continue to be underemployed which puts downward pressures on wages.
The TUC’s Great Jobs Agenda speaks to many of these issues. A job, maybe in something related to your interests, that pays a decent wage, housing costs that don’t decimate your pay-check, the chance to at least match your parents’ standard of living. The demands of the UK’s young population are not obscene or the product of some kind of millennial entitlement, they’re the same as the generations that went before. Policy and the surrounding discussions need to start addressing this and offer quality options for young people whether they choose to pursue higher education or not. I mean, to make it even worse, it is not even us that’s eating avocado toast.