Who would be a young adult in 2014?
Blighted by the recession and its aftermath, many 22 to 30-year-olds have seen their living standards eroded over the past two years, while the majority of households in the UK have at least stabilised.
A new report from the Institute for Fiscal Studies (IFS) shows pay, employment and disposable income have fallen furthest for young adults in their 20s. On a range of measures, they have been hit harder than any other age group. In this context there was something unedifying about the recent Reform Scotland report on quangos and the number of public sector employees on high salaries.
The think tank, which numbers former company directors, merchant bankers and property fund managers among its guiding lights, thinks it alarming that the likes of heads of NHS boards, the Care Inspectorate and the Water Industry Commission earn so much. It is agitated that 43 such quango staff earn more than First Minister Alex Salmond.
While pay inflation at the top is an issue, this is surely missing the point. The corrosive effect of massive pay inequalities between the top and bottom in society is increasingly apparent and it is worsening.
Last week the Office for National Statistics (ONS) released figures that show disposable household income increased between 2011/12 and 2012/13 by £940 for the richest one-fifth of households. The figure for all other groups fell by around £250, but the poorest households saw their disposable income cut by £381. The net result of austerity has not been that we are "all in it together". Rich households grew richer last year, while everyone else was poorer and it is beginning to look like a pattern. The IFS figures show employment, pay and income rates have all fallen furthest for those aged 22 to 30. This group saw a 13 per cent decline in household income. That is assuming they have a household. Many young people have been forced to see out the recession by living at home, with more than one quarter of 22 to 30s still doing so.
Will such deprivation at the outset of their working life damage young people's longer term prospects, the IFS queries? It may do, and tighter lending rules are making it harder than ever to get on the housing ladder. Home ownership for young adults has halved in 20 years. Yet this is a group of workers who are being expected to pay the pensions of their predecessors.
Increasingly poverty is a problem of low pay, not no pay. The rise of zero-hours contracts contributes to trapping people in working poverty, while the limited take up of the living wage by employers is another factor.
Excessive salaries at the top are a problem, whether in the public or private sector, especially where there is no apparent link to performance. But undermining the prospects of younger people could be a bigger issue in the long term, as many struggle to establish satisfactory standards of living and the stability to start a home and family. As our economy recovers, it is important any gains in terms of wealth and prosperity reach all age groups. Young people take longest to see the benefits, but need them the most.
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