The general election is less than 7 weeks away and we have an unexpected but brilliant chance to discuss what would make Britain a more egalitarian, open and prosperous place for its young folk. So the Young Money blog is determined to showcase viable ways to make the election more inclusive and fairer to generation Y, starting today with a discussion around the very foundations of financial wellbeing – proper wages
So Theresa May did some thinking over the Easter Weekend, huh?
The decision to hold an early general election presents a short but valuable window to air some of the huge financial pressures bearing down on young people – and hopefully bring this whole agenda to the attention of the people who can actually do something.
While Brexit is likely to be the main talking point, our main political parties needn’t forget that young people have been harbouring serious resentments about the way the economic picture has shaken out since the financial crash in 2008. The Occupy movement, dominated by young people, may be lying dormant but the anger at its core has not gone away.
One might even argue that Brexit and other major f*** you moments in recent times can be attributed to the feeling that the world economy is out of kilter, that a warped form of capitalism has been fostered on the back of an increasingly interconnected world economy, that this has all been done to favour certain rarefied interest groups, that it’s all been done at the expense of ordinary citizens…that it’s all wrong, wrong, wrong.
And those people aren’t half right. But they may not have the means of easily articulating it, let alone converting it into meaningful action, so they make their mark at the ballot box. They did so with Brexit last year…and they’ll do it with the upcoming General Election.
So those more in the know (I won’t use the dreaded words “media” or “experts”, urgh!) have to make sure that the information about what’s going on is presented to the public as clearly as possible. Sadly, much of the coverage and debate we see and hear just doesn’t focus on young people and what ails them.
And at the root of it – I’m sorry to say – is money. We pretend we aren’t ruled by it, but in many ways we are, at least when it comes to thinking about how we make our incomes cover our essential outgoings and ensure we have a contended life. Sounds like a reasonable aim – YEA?
Yet this translates into a colossal weekly struggle for many young people. So, as the Young Money Blog, let’s do our bit to expose this reality. We’ll begin with an area that underpins our prosperity; incomes. Here are just some of the problems we face;
Incomes have stalled for the younger generations
We are *officially* the first generation to see incomes stutter. It used to be the case that young people could reasonably expect to start their working lives with higher incomes than those born earlier due to a growing economy. But not since World War II have young people entered the jobs market with such a rum deal compared to the generation before, according to the Institute for Fiscal Studies.
People under 24 are not entitled to the National Living Wage
The National Living Wage was boosted this month to £7.50 but it’s only applicable to the over 24s. Under that age, workers are entitled to the National Minimum Wage, which has increased by 10p to £7.05 for those aged 21 to 24, by 5p to £5.60 for those aged 18 to 20 and by 5p to £4.05 for those aged 16 and 17. The TUC has said the minimum wage for 16 to 20-year-olds is worth less in real terms than it was in 2008. The minimum wage available for apprentices, meanwhile, has only gone up from £3.40 to £3.50 – hardly a cracking wage incentive for today’s school leavers, despite the government’s best efforts to bolster apprenticeships. And the income inequality between the generations is likely to be exacerbated over time, according to the Resolution Foundation, with pay for workers on the living wage rising nearly four times faster than for a typical worker over the course of this Parliament.
The number of graduates in high-skilled jobs is in “long-term” decline
The Institute for Public Policy Research has found that 61.3 per cent of graduates aged 21 to 30 were employed in high skill occupations in 2008. Today that figure is 55.8 per cent. The IPPR said: “Characteristics including socio-economic background, schooling and ethnicity are still strongly related to the jobs prospects of young people, with those who went to private school earning more even compared to other graduates in professional jobs.”
There is still no legal requirement to pay interns so long as they are not classed as “workers”
Internships can be a great entry point to the world of work – so long as they are paid. A special cross-party committee has called for a ban on unpaid internships lasting longer than four weeks and while the government has previously put the kibosh on this measure, it could make a comeback as part of Theresa May’s plan to help “Just About Managing” families (at least according to the MP Damian Hinds). In the meantime, unpaid internships remain an ugly, but inevitable, part of the job landscape for aspirational young people, with only the well-supported and wealthy being able to take on these placements for weeks or months.
Too many universities fail to equip young people with the skills they need in the modern jobs market
More than a quarter of graduates regret the time and money they spent on their degree, equivalent to 5.6 million people across the UK, according to recent research from Intern Tech. A similar number believe their education was outdated and 41 per cent have been forced to take an entry-level job well below graduate level once they left university, rising to more than half for grads aged under 34. One of the reasons is a poor understanding of our burgeoning tech industry, which currently has a skills shortage. Nearly half of graduates didn’t understand what some of the most sought after roles in the tech industry involved, from data scientist to app developer, let alone how to go after them.
Youth unemployment has not gone away
Youth unemployment has come down significantly in recent times, but it is still more than double the general employment rate, with ethnic minorities and poorer school leavers particularly vulnerable. The Work and Pensions Committee recently said that even temporary bouts of unemployment risk creating “a permanent scar on young people’s future careers”.
So what’s to be done? It’s worth stating that we have had a new broom sweeping through Downing Street since last year and that Theresa May has made some promising noises on some (if not all) these issues in a way that her predecessors did not. However, the proof will be in the pudding – or rather the manifesto. Over the next few weeks, scrutinise the main parties’ offerings to see if any or all of the following is being promised (bearing in mind that politicians very often break their promises, as the Lib Dems did on tuition fees!)
Extend the national living wage to the under 24s
Ban unpaid internships lasting more than four weeks
Allow employers to access the new apprenticeship levy to help with the costs of offering internships
Legally protect the term ‘internship’, in a similar way to the protection of the term ‘apprenticeship’, so that it only applies to placements that are paid and which offer a training opportunity
Use £1m of the £72m earmarked for “opportunity areas” to financially incentivise top employers to offer residential internship programmes for disadvantaged young people (suggested figure courtesy of the IPPR)
Use Britain’s Jobcentre Plus network more efficiently to link up with schools, colleges, employers and apprenticeship providers to ensure young people are developing the right skills and attributes needed for the job market, using social media and other channels to get to young folks more effectively