Unemployment is running three times higher among young people with one in three men under 25 unemployed. It is vital to design policies to prevent a brain drain and keep this talent at home.
The challenge for public policy is how we pre-empt the waste of so much talent that is lying idle and the long term risk that they will haemorrhage abroad. This is a profound test of our capacity to make sound economic decisions for our country.
Young people are the main victims of the economic catastrophe that has occurred in this country. They are worst hit by economic displacement, most scorched by the property bubble, and will be left to pick up the cost of trebling public debt.
The disproportionate impact of unemployment on young people is already evident. In the past two years, the unemployment rate among persons under 25 has increased by 17 points to 27%. In contrast, the increase in the unemployment rate for those over 25 is up by under 5 points to 9%.
In the past two years the number of people under 25 at work has fallen by 104,000 (over 60% of the total job losses). While 40,000 became unemployed, almost 30,000 chose to drop out of the labour force, no doubt extending their stay in education (a 5% fall in participation rates). Net migration was also significant.
In just two years 100,000 young people have been forced to put their plans on hold and now must wait anxiously to see whether the right choices are made to shorten the recession.
It’s young people too, who were forced to pay bloated prices for their homes. This represented a huge transfer of wealth from the younger to the older property owning generations. Those young people who bought at the very peak of the market are now particular victims as their homes are worth much less than the mortgage they took out to pay for them.
The Government is borrowing to fund one third of everything it spends, and plans more borrowing to buy impaired loans from the banks. This will treble the national debt within the next five years. If this money is not used to create an asset that will provide yields in the future, then it will fall to young people to carry the burden in the years ahead.
Designing policies to keep this talent in Ireland is not only a question of fairness, it is also vital to the long term interests of this country. In the short term, these young persons may have limited choices. They have to suspend their ambitions and take whatever they can get. However, in the long term, young people are the most mobile. They can easily move abroad, such a brain drain could damage our prospects for years to come.
It would not only rob us of the most talented but compromise the long term funding of pensions. Already we have been warned that by 2050, the number of pensioners to be supported by the working population will rise from one for every six workers now to one for every two workers.
We can either confront this challenge head-on or we can choose to make the easier choices, choices that tip-toe around vested interests but would do untold damage in the long term.”