A two tier recession

Sand

I often see it stated that "This recession is nowhere near as bad as the 1980s" or "The 1980s were far worse". As recently as yesterday.

When I see it, it leads me to a couple of conclusions:

- The poster in question is ( I presume) old enough to have personal experience of the 1980s recession in the economic sense (i.e. was born in the sixties or seventies).
- The poster in question is doing a lot better in this recession than they did in the last one.
- The poster was probably in their twenties at most in the 1980s.
- The poster is probably no longer in their twenties currently.

I also see comments by some posters who rejoice in how Ireland is doing well because peoples savings and pensions were protected. Which also leads me to draw some conclusions - which end up in the same place: they are not in their twenties (neither am I btw). In its response to the crisis, Ireland has made a very deliberate decision to protect the insiders and to pull up the ladder behind them - at the cost of the outsiders

Along those lines, there was an interesting article by Dan O'Brien which highlighted the two tier nature of the recession by the fall in employment in various age groups.


The number of under 35 year olds in employment has dropped by almost a third since 2007

The number of under 25 year olds in employment has dropped by 57% (!) since 2007.

The number of over 35 year olds in employment has dropped by just 2-3 percent, and is actually on the rebound.

Its perhaps then not so amazing that people old enough to have experience of the 1980s recession think that this recession is not as bad as the 1980s. They are in a different recession entirely - a mild adjustment perhaps. Back in the 1980s they might have found that their elders probably though the 1950s were far worse. For similar reasons - in times of hardship, the Irish state devours its young.

This is something that appears to be embedded in the DNA of the state - the promissory note "deal" amounted to sticking our kids with the bill for our failure. This was celebrated as a great success - we had dodged fee, our kids would take the hit. At the time I was particularly struck by a picture of a teacher at a trade union meeting prior to the Croke Park II discussions, balancing her two year old on her knee.

All that considered, I draw another conclusion every time I see that "Oh, the 1980s were worse" claim:

- The only thing worse than facing economic hardship is facing economic hardship *and still* getting patronized by the "we were so poor" brigade.

road_high

The standard of living now is infinitely ahead of the 80s...even if you're on the dole now, it maybe a struggle but the 80s was definitely more hand to mouth.
People made do with hand me downs, even people with jobs just about got by.
Wages were very low and "stuff" very expensive in proportion to what people earned.

Of course persoanl debt is a huge problem this time round. The country is so much more well developed in every sense.

Rightwing

Sand wrote: »

I often see it stated that "This recession is nowhere near as bad as the 1980s" or "The 1980s were far worse". As recently as yesterday.

When I see it, it leads me to a couple of conclusions:

- The poster in question is ( I presume) old enough to have personal experience of the 1980s recession in the economic sense (i.e. was born in the sixties or seventies).
- The poster in question is doing a lot better in this recession than they did in the last one.
- The poster was probably in their twenties at most in the 1980s.
- The poster is probably no longer in their twenties currently.

I also see comments by some posters who rejoice in how Ireland is doing well because peoples savings and pensions were protected. Which also leads me to draw some conclusions - which end up in the same place: they are not in their twenties (neither am I btw). In its response to the crisis, Ireland has made a very deliberate decision to protect the insiders and to pull up the ladder behind them - at the cost of the outsiders

Along those lines, there was an interesting article by Dan O'Brien which highlighted the two tier nature of the recession by the fall in employment in various age groups.


The number of under 35 year olds in employment has dropped by almost a third since 2007

The number of under 25 year olds in employment has dropped by 57% (!) since 2007.

The number of over 35 year olds in employment has dropped by just 2-3 percent, and is actually on the rebound.

Its perhaps then not so amazing that people old enough to have experience of the 1980s recession think that this recession is not as bad as the 1980s. They are in a different recession entirely - a mild adjustment perhaps. Back in the 1980s they might have found that their elders probably though the 1950s were far worse. For similar reasons - in times of hardship, the Irish state devours its young.

This is something that appears to be embedded in the DNA of the state - the promissory note "deal" amounted to sticking our kids with the bill for our failure. This was celebrated as a great success - we had dodged fee, our kids would take the hit. At the time I was particularly struck by a picture of a teacher at a trade union meeting prior to the Croke Park II discussions, balancing her two year old on her knee.

All that considered, I draw another conclusion every time I see that "Oh, the 1980s were worse" claim:

- The only thing worse than facing economic hardship is facing economic hardship *and still* getting patronized by the "we were so poor" brigade.

The real 2 tier recession in Ireland is urban v rural. The real recession is in the rural areas.

People are better off now than in the 80's, but the country is worse off (debt).

washman3

The thing that i cannot really understand are some people saying we should rejoice in the fact that we are still better off than Romania,Somalia and Haiti.
Just cant see the relevance of these statements at all...

Rightwing

washman3 wrote: »

The thing that i cannot really understand are some people saying we should rejoice in the fact that we are still better off than Romania,Somalia and Haiti.
Just cant see the relevance of these statements at all...

Well I suppose we can rejoice in the fact that we are in the EU, or else we'd be almost as bad as those countries.

ardmacha

The State devours its unskilled young. For a lot of graduates the recession is irrelevant.

washman3

Rightwing wrote: »

Well I suppose we can rejoice in the fact that we are in the EU, or else we'd be almost as bad as those countries.

Probably correct, but this is a silly comparision from mostly the same people that 'rejoiced' just a few short years ago that we were supposedly world beaters and trumpeted the 'Roy Keane philosophy' that we should never settle for second best. why the big change now??

P.S. Iceland is not in the EU

peter barrins

This post has been deleted.

peter barrins

This post has been deleted.

dissed doc

washman3 wrote: »

The thing that i cannot really understand are some people saying we should rejoice in the fact that we are still better off than Romania,Somalia and Haiti.
Just cant see the relevance of these statements at all...

It's called a chronic lack of self-esteem.

nice_guy80

Lot of retired people living very comfortably

Same with people in well paid state and private jobs.

14% of household have a gross income above €100,000 per annum
2% of households have gross incomes above €200,000 per annum

http://www.thejournal.ie/readme/high-earner-ireland-755580-Jan2013/

johnnyskeleton

I don't think the division is due to age, although thereis no doubt that a greater percentage of younger people are unemployed.

If we take two examples, the person who left school at 16 to work on the sites was probably earning 30k or more when his contemporaries were still in college. Many of those people that I know looked down on college students and believed themselves not just lucky but actually much smarter than those in college. Meanwhile the people who got college degrees, stood a better chance of gaining long term employment. So the latter group at the age of 23/24 took entry level grad jobs at 20-25k pa, less than their tradesmen contemporaries. But those jobs have shown themselves to be more resiliant than the trades.

At the same time, the success of the trades meant factory jobs and other unskilled jobs became less attractive and Irish people wouldnt do them. The minimum wage, joint labour agreements and social welfare shot up to reflect the fact that an unemployed person could get a job on a site, usually starting at around €10-15 an hour.

There is now a significant disincentive to labour intensive jobs in Ireland as it is too expensive.

The government policy is to focus on high paid highly skilled jobs, but haven't quite works it out yet. But it is unlikely that all the unemployed bricklayers will be able to retrain as tech geniuses. Some might, but most won't.

If the government were to take steps to help the unemployed young people to get jobs, they need to readjust the market conditions. Schemes like jobbridge have many problems and while providing a temporary salve, do nothing to promote long term employment.

Brussels Sprout

Young people have been thrown under the bus in this country.

Scofflaw

This does boil largely down to the observation that recessions are harder on the young in terms of employment, which is hardly a surprising outcome, while the observation that the average material circumstances of everyone involved has improved in the intervening 30 years is equally inarguable.

The outcome stems from the fact that when recession hits, companies tend to stop hiring new people as opposed to firing their existing people and hiring cheaper younger replacements. Students emerging into the workforce are by definition going to be taken on as new hires, and clearly don't already have a place in a company. So a freeze on new hiring is going to impact them particularly.

The alternative, where companies affected by recession let existing workers go and replace them with the newly emerged ex-students doesn't happen for the simple reason that younger workers are not good replacements for existing experienced workers. They're not as valuable (indeed, often not worth their salary as compared to older workers), they're an unknown quantity, and they're more mobile than older workers as well, whereas what a company really needs in the uncertain and financially tight environment of a recession is certainty and value for money in its available resources, including its human resources. Those factors are against younger workers.

So sensible companies use recessions to snap up redundant experienced workers (possibly at lower prices than usual), not to haul in a thrashing set of fresh young trainees.

Dramatising this as "the State devours its young" is rather silly. The burden falls on those best able to bear it, for reasons that owe everything to the logic of the labour market rather than 'special malevolence'. On the contrary, special efforts would be required to bend the market in favour of young people, and it's an open question whether that's a particularly good use of resources.

cordially,
Scofflaw

Sand

Couple of points made in response.

- Couple more "The 1980s were worse" type posts, which essentially reaffirm my point. People who remember the 1980s are in an entirely different recession now. They were young and outside then, they are older and inside now. Of course they remember the 1980s as being tougher.

- A couple of points that the country is more developed or advanced than it was in the 1980s and that this a widespread benefit free to all regardless of their income or wealth. This a a value judgement that I broadly agree with, but I don't think Facebook and some motorways is a good trade for negative equity in the middle of Meath with a 2 hour commute to Dublin - if you're lucky to have a job at all.

@Rightwing

The real 2 tier recession in Ireland is urban v rural. The real recession is in the rural areas.

There's a certain (rural) mindset where everything is urban v rural.

- A couple of people noting that the division isn't *caused* by age. I never said it was: the cause is the deliberate policy of the state to always protect the positions, pensions, wealth and savings of those at the top of the pyramid at the great expense of younger people - those *least* able to bear it btw Scofflaw - whose interests are constantly sacrificed for no real justifiable purpose. The government doesn't simply accept some natural state of affairs - it deliberately intervenes via stupid bank bailouts, Croke Park deals, golden handshake deals for failure, upward only rent reviews, attempting to dictate "Long Term Economic Value" (remember that wheeze?) of property, "slow and steady" budget adjustments to keep funding pensions and wages on borrowed money. The aim is always to protect those with wealth and position in the here and now at the expense of everyone else and future generations.

- My key interest with this is noting the two tier nature of the recession, and that it is no mistake: its deliberate policy. There's probably a certain predisposition to it in politics: younger people are notorious for not voting so not a high priority for politicians compared to vested interest groups, and politicians always prefer to delay resolution of problems to the future when it might be someone elses problem.

Scofflaw

Young people are far better able to bear unemployment than older people - they have greater mobility, a less fixed skillset, cost less, have lower overheads and no-one to support. I don't buy the "won't anyone think of the young people" tragic line particularly.

cordially,
Scofflaw

KyussBishop

That doesn't do young people much good though, where some can't get a job for upwards of a decade or more due to the crisis, or earn too little to get a speedy start at their adult life, and end up with a decade+ long delayed start compared to other generations (especially where it comes to starting a family and affording a home); unemployment and what the crisis brings with it, go far beyond generalized economic harm.

Some of the other harmful effects (for young people, and in many cases old too): harms future prospects in general; causes erosion of skills due to unemployment; worsened mental health for some, through unemployment; greater financial dependency on family (not all are so mobile); on the other side, losing ties with family and social groups, through emigration; worsened educational prospects, due to funding cuts (and without the certainty of a job at the end of that); for some who are particularly disadvantaged, homelessness (with decimated social supports making it hard to get back up; sometimes comorbid with mental illness, which can assist in falling into drug abuse), greater debts (that were previously sustainable and now are not), suicide due to circumstances and lack of prospects (among other comorbid causes).

That's more young adults as well, not even getting to kids (which mirror some of the above): Greater incidence of poverty due to families financial circumstances (was a report released on this just recently, showing Ireland having one of worst such poverty rates in Europe now), family problems due to financial issues, homelessness for some, negative effects of educational cuts, among more which doesn't come to mind offhand, but which is probably detailed in reports like this (don't know if this is the recently released one though; assume it is):
http://ec.europa.eu/ireland/press_office/news_of_the_day/eurostat-children-at-risk-of-poverty_en.htm


A common argument heard about the public debt and in support of deficit-reduction/austerity, is that "we can't be placing this burden on our grandchildren" and such, but that is ignoring the effect those policies are having on this generations kids and young adults, causing them significant harm, well beyond what future generations will face due to the debt burden, once this crisis is over.

maninasia

Ireland has always suffered from cycles of emigration, there is a cultural acceptance to young people leaving, much more so than mainland Europe, at least historically. There's a lot of hand wringing but don't dare to cut pensions (even though pensioners are very well looked after in Ireland), don't dare to fire establised public workers, sure who cares about a hiring freeze we are in already and we'll hang on what we have got. We need to 'rescue' the property market by getting prices up again etc etc.

There is a similar old vs young dynamic in the US now, where by far the biggest liability is incurred by medicare and social security payments, there is no way in hell the current youth will be able to enjoy the level of payment the baby boomers are receiving.

Rightwing

maninasia wrote: »

Ireland has always suffered from cycles of emigration, there is a cultural acceptance to young people leaving, much more so than mainland Europe, at least historically. There's a lot of hand wringing but don't dare to cut pensions (even though pensioners are very well looked after in Ireland), don't dare to fire establised public workers, sure who cares about a hiring freeze we are in already and we'll hang on what we have got. We need to 'rescue' the property market by getting prices up again etc etc.

There is a similar old vs young dynamic in the US now, where by far the biggest liability is incurred by medicare and social security payments, there is no way in hell the current youth will be able to enjoy the level of payment the baby boomers are receiving.

It isn't just Ireland, there are structural problems in Europe, look at the youth unemployment rates in Greece/Italy/Portugal & Spain. Really frightening consequences when one thinks about it.

peter barrins

This post has been deleted.

View

Sand wrote: »

- My key interest with this is noting the two tier nature of the recession, and that it is no mistake: its deliberate policy.

All political decisions have "winners" and "losers", hence they are almost always "two tier". That was the case in the boom also when the "winners" were (mortgage free) property owners and the "losers" were property less people and/or people who ended up in negative equity.

That though isn't to say there is a "deliberate policy" to "shaft" a particular segment of the population, usually it is just a case of if a decision is made to favour one group of people, others invariably "lose" as a result. Politics involves making hard choices about finite resources usually in the face of near infinite demand. Invariably, the losers - often the politically disorganised - think such decisions are "unfair". That though presumes "fair" decisions are "efficient" decisions and/or "politically tenably" decisions.

sock puppet

Scofflaw wrote: »

The outcome stems from the fact that when recession hits, companies tend to stop hiring new people as opposed to firing their existing people and hiring cheaper younger replacements.

That depends on the company really.

Sand

@Scofflaw

Young people are far better able to bear unemployment than older people - they have greater mobility, a less fixed skillset, cost less, have lower overheads and no-one to support.

Nonsense - older people are far better able to bear unemployment: they have years of experience under their belts, contacts and proven skills often with a willingness to accept a lower wage than a few years ago. The young lack skills and experience. Government policy has been to limit and prevent companies from offering the low level entry positions for the young people to enter the work force so as to preserve the benefits of the entrenched, older workers.

You noted the disadvantages of younger generations yourself in the post just before:

They're not as valuable [EDIT - Younger People] (indeed, often not worth their salary as compared to older workers), they're an unknown quantity, and they're more mobile than older workers as well, whereas what a company really needs in the uncertain and financially tight environment of a recession is certainty and value for money in its available resources, including its human resources. Those factors are against younger workers.

So sensible companies use recessions to snap up redundant experienced workers (possibly at lower prices than usual), not to haul in a thrashing set of fresh young trainees.

This isn't even a matter of opinion - the bounce back that has occurred in employment is in the 35+ age group. Not only are the 35+ age group less impacted by the recession, they are the age group recovering the quickest.

EDIT - Also, I'm not stating that someone has to be sacked and its fairer that its the older workers. Whats being highlighted is that it was arbitrarily decided under the Croke Park deals to stop hiring new younger workers, and any of those who were hired were to be on far inferior contracts to their existing colleagues. This measure wasn't taken for any justifiable reason (preserving services etc). It was taken only to avoid actual strategic review of the public sector with appropriate redundancies or redeployment. Why is that a good idea for anyone other than the entrenched groups?

I don't buy the "won't anyone think of the young people" tragic line particularly.

Isn't that the point?

@View

All political decisions have "winners" and "losers", hence they are almost always "two tier". That was the case in the boom also when the "winners" were (mortgage free) property owners and the "losers" were property less people and/or people who ended up in negative equity.

Yep, but the government policy is almost invariably to ensure the "winners" keep winning. The example you cite is another example of the older generation benefiting at the cost of younger generations: older generations were the primary property owners in the lead up to the boom and benefited most from the boom prices. Younger generations are those most likely left in negative equity and with the majority of the cost of rescuing the banks where older generations saved their boom gains.

Again - to save confusion: I'm not claiming the government has a deliberate policy of favoring the old over the young. I'm point out that the governments deliberate policy to protect and maintain the position of the "winners" on the whole benefits older generations and penalizes "younger" generations - for no justifiable benefit.

One of the big difference between this rescission and the last one is that this one is changing society, we are acutely seeing things like legal services coming down in cost, in fact the whole magic suit of clothes that a lot of the professions are has been exposed in this recession.

The recession of the1980t largely left the structures of Irish society the same as they always were, but this recession has changed Irish society and there is no going back now. There are numerous example of this.

Scofflaw

Sand wrote: »

@Scofflaw
Nonsense - older people are far better able to bear unemployment: they have years of experience under their belts, contacts and proven skills often with a willingness to accept a lower wage than a few years ago. The young lack skills and experience. Government policy has been to limit and prevent companies from offering the low level entry positions for the young people to enter the work force so as to preserve the benefits of the entrenched, older workers.

You noted the disadvantages of younger generations yourself in the post just before:

This isn't even a matter of opinion - the bounce back that has occurred in employment is in the 35+ age group. Not only are the 35+ age group less impacted by the recession, they are the age group recovering the quickest.

EDIT - Also, I'm not stating that someone has to be sacked and its fairer that its the older workers. Whats being highlighted is that it was arbitrarily decided under the Croke Park deals to stop hiring new younger workers, and any of those who were hired were to be on far inferior contracts to their existing colleagues. This measure wasn't taken for any justifiable reason (preserving services etc). It was taken only to avoid actual strategic review of the public sector with appropriate redundancies or redeployment. Why is that a good idea for anyone other than the entrenched groups?

The reason both the private sector and the public sector tend to protect the older workers is that older workers have dependents, and, as I said, far less flexibility than younger workers.

What you've done is compare the older and the younger worker competing in the same market, but that misses the key capability of younger people - greater market mobility and flexibility. It's not an advantage to possible employers (on the contrary), but it's an advantage to the young worker him/herself.

When I was in my twenties, I moved country once because, more or less, a couple of visiting friends (themselves emigrants) got me drunk and persuaded me to come for the trip - I didn't come back for 6 years. A friend of a friend wound up in Liverpool as a result of a particularly good party, and stayed there for the following two years, starting out by working to make their ticket money back to Dublin, and winding up helping run a café. Other friends met interesting people while on trips, and wound up variously clerking for a mining company in Gabon, running a nightclub in Barcelona, or marrying an Egyptian special forces agent they met diving.

Could I do now what I did in my twenties - up sticks over a drunken weekend, move country, and come back briefly for my possessions 6 months later? No, I couldn't. I have a wife and a child, and she would have to be in school on Monday morning. Nor could I take the prolonged unemployment that resulted - in my twenties there were plenty of floors/sofas that I could sleep on, and I required very little money to get by.

Compared to me in my twenties, I have vastly greater skills and experience. I am many times over more employable, but I am also very very much less mobile, and very much less flexible. Changing countries once you're an "older worker" takes six months of planning if your company is moving your job, and much longer if you're going to be starting afresh.

That's why older workers are protected - not because they are a vested interest so much as because they have vested interests. Your point that they're less able to secure employment in the same labour market as older workers is true, but irrelevant - the young are literally better able to bear the unemployment.

cordially,
Scofflaw

KyussBishop

Yes but now there's nowhere for the young to go; the lack of jobs is not just a problem in Ireland, it is a worldwide problem, with an enormous shortage of jobs compared to the amount unemployed.

The young are certainly more flexible at being able to compete for the available jobs, but they are still shafted by the lack of jobs, and even moreso by bearing the brunt of the recession like Sand described.

It may still be true that the young in general are better suited to taking the hit, due to the reasons you point out, but doesn't mean they are all able to, as there is significant damage to come from that, like described in my above post; the economic/social hit, whether it's applied to young or old, is also itself inherently massively unjust and punitive (and not even necessary, when looking at the big picture).

maninasia

mariaalice wrote: »

One of the big difference between this rescission and the last one is that this one is changing society, we are acutely seeing things like legal services coming down in cost, in fact the whole magic suit of clothes that a lot of the professions are has been exposed in this recession.

The recession of the1980t largely left the structures of Irish society the same as they always were, but this recession has changed Irish society and there is no going back now. There are numerous example of this.

I'm interested, could you point out more examples please? Doctors fees have stayed high, although GPs are supposedly able to open competing clinics now.

Scofflaw

KyussBishop wrote: »

Yes but now there's nowhere for the young to go; the lack of jobs is not just a problem in Ireland, it is a worldwide problem, with an enormous shortage of jobs compared to the amount unemployed.

That was also true in the last recession - in particular, the UK unemployment rate is actually relatively lower than it was during the Irish recessions of the Eighties.

KyussBishop wrote: »

The young are certainly more flexible at being able to compete for the available jobs, but they are still shafted by the lack of jobs, and even moreso by bearing the brunt of the recession like Sand described.

It may still be true that the young in general are better suited to taking the hit, due to the reasons you point out, but doesn't mean they are all able to, as there is significant damage to come from that, like described in my above post; the economic/social hit, whether it's applied to young or old, is also itself inherently massively unjust and punitive (and not even necessary, when looking at the big picture).

I'm hardly claiming that it's fun to be young and unemployed. It wasn't last time, either, but it was and is better than being unemployed when you've lost mobility and gained dependents.

cordially,
Scofflaw

Rightwing

KyussBishop wrote: »

Yes but now there's nowhere for the young to go; the lack of jobs is not just a problem in Ireland, it is a worldwide problem, with an enormous shortage of jobs compared to the amount unemployed.

The young are certainly more flexible at being able to compete for the available jobs, but they are still shafted by the lack of jobs, and even moreso by bearing the brunt of the recession like Sand described.

It may still be true that the young in general are better suited to taking the hit, due to the reasons you point out, but doesn't mean they are all able to, as there is significant damage to come from that, like described in my above post; the economic/social hit, whether it's applied to young or old, is also itself inherently massively unjust and punitive (and not even necessary, when looking at the big picture).

This is an interesting debate. Many older people have been hit with unemployment too. The ones that are in work are proving themselves so why should an employer take on a younger person who may not be as good.

Also, as you point out, many younger people can't adapt, all we need do is look at the shocking number of suicides in the country. The saddest statistic of all.

KyussBishop

Scofflaw wrote: »

That was also true in the last recession - in particular, the UK unemployment rate is actually relatively lower than it was during the Irish recessions of the Eighties.

I'm hardly claiming that it's fun to be young and unemployed. It wasn't last time, either, but it was and is better than being unemployed when you've lost mobility and gained dependents.

I agree there; what I'm primarily taking issue with though, is the idea that the mobility in some way balances out the significant hit the young are taking, when (since it's only a token advantage, since many will not get a chance to make use of that advantage) it doesn't, thus where they may still be taking a disproportionate hit.

Anyway, not trying to nitpick or anything in case it comes across that way; just sticking on that issue a bit.

KyussBishop

Rightwing wrote: »

This is an interesting debate. Many older people have been hit with unemployment too. The ones that are in work are proving themselves so why should an employer take on a younger person who may not be as good.

Also, as you point out, many younger people can't adapt, all we need do is look at the shocking number of suicides in the country. The saddest statistic of all.

Indeed, there are rather a lot of such hidden costs of the crisis, which get lost in focusing purely on economic statistics; all of those problems, from unemployment, mental-health/suicide, erosion of skills, won't be solved by private industry (there simply isn't a way for private industry to solve those issues alone, or they'd have done it already), so the problems will just be left to linger for a decade or more (compounding the damage enormously), to slowly recover by themselves.

If there is going to be an actual solution to those issues (not just leaving them to sort themselves out), it's going to take getting past a lot of ideological roadblocks, and adding a human (rather than pure-numbers) point of view back into economics, to get past this; probably the biggest ideological roadblock is any actual solution, will necessarily involve state intervention/spending.

Rightwing

KyussBishop wrote: »

Indeed, there are rather a lot of such hidden costs of the crisis, which get lost in focusing purely on economic statistics; all of those problems, from unemployment, mental-health/suicide, erosion of skills, won't be solved by private industry (there simply isn't a way for private industry to solve those issues alone, or they'd have done it already), so the problems will just be left to linger for a decade or more (compounding the damage enormously), to slowly recover by themselves.

If there is going to be an actual solution to those issues (not just leaving them to sort themselves out), it's going to take getting past a lot of ideological roadblocks, and adding a human (rather than pure-numbers) point of view back into economics, to get past this; probably the biggest ideological roadblock is any actual solution, will necessarily involve state intervention/spending.

I fully agree.
The state would have to redirect some of it's resources to the areas needed. A massive amount of waste in this country at any rate on quangos and the like. I think the days where governments just threw money out are gone, it should be down to prioritising now.

maninasia

maninasia wrote: »

I'm interested, could you point out more examples please? Doctors fees have stayed high, although GPs are supposedly able to open competing clinics now.

Well its not finished yet, re the doctors a good example is a new system some doctors are introducing I got a flyer in the door about this, you pay the GP a monthly fee ( 10 for single people 30 for family's ) and that covers you for all GP services including blood tests ) my point is the system is changing other examples..pubs are no longer the gold mine they once were and because of this the price has come down for example the pub my daughter goes to has pitchers of beer for 10 euro that works out at 2.50 a pint. None of these things happened in the last recession.

ardmacha

The real "winners" at present are employable young people, who can now readily afford houses with their salaries.

maninasia

ardmacha wrote: »

The real "winners" at present are employable young people, who can now readily afford houses with their salaries.

Not so fast, there are many employable people who can't get a job in Ireland, for instance teachers, trainee guards, architects, engineers physios etc etc. There are also others like newly qualified nurses who have got their pay slashed at the same time.

What you mean to say I assume is young people who have succeeded in gaining employment or preferably already in employment.

ardmacha

What you mean to say I assume is young people who have succeeded in gaining employment or preferably already in employment.

Fair comment.

My point really was that some young people have no problem at all. The unequal impact of the recession is not just a question of age. The middle aged builder can be worse off than the young person that heads to Oz.

jonsnow

Any of my cohort of friends/acquaintances (late 20s) that joined the public sector are doing very well through a demographic quirk.They were too young to have bought any property but too old to have had severe problems getting permanent PS jobs or the reduced conditions of the new contracts.The people they work with that are a few years younger or older are in a much worse position.My cohort are all starting to buy affordable houses near where their parents live which is a settled area that they could never have afforded during the boom and they all seem to be able to afford holidays and generally have enough discretionary money to have a good time.there are definetly winners and losers in this recession even amongst people with almost identical skillsets and age profiles

mistermouse

In my memory of the eighties, we weren't spoilt children who had and expected everything unlike today. My parents did not expect a palatial home like many see as a right now.

Neither was social welfare fraud rampant like today. Seems very little effort to stamp it out

Another big difference was people went out and spent money, there was more of a social life without so many laws that now have changed the way people socialise

I think a big thing was that there probably was more of a black economy then.

At present the biggest black economy sector is crime, which the current govt are cutting back on solving and yet there is very little effort to de-incentify it. Criminals have more rights than victims in Ireland these days and it certainly looks like crime pays

So yes it there is a difference in the recessions and this one is worse

jimmycrackcorm

In the eighties people couldn't afford anything. But now with the boom time rises in social welfare that haven't receded to match the economic downturn, people on social welfare actually see the benefit of reduced prices. Even still in Lidl you can still buy a bottle of wine for €4. Who bought wine in the eighties?

Rightwing

jimmycrackcorm wrote: »

In the eighties people couldn't afford anything. But now with the boom time rises in social welfare that haven't receded to match the economic downturn, people on social welfare actually see the benefit of reduced prices. Even still in Lidl you can still buy a bottle of wine for €4. Who bought wine in the eighties?

Years of socialism have created a situation where we now have 'the working poor'. People struggling to pay bills and many on the welfare are getting new houses through regeneration etc.

Duggys Housemate

The OPs premise is invalid because the young have always suffered from Ireland's recessions - or slowly growth. People in school in the 80's expected to emigrate. Most did. Some came back.

Sand

@Duggys Housemate

The OPs premise is invalid because the young have always suffered from Ireland's recessions - or slowly growth. People in school in the 80's expected to emigrate. Most did. Some came back.

Can you explain to me what my premise was? I ask because I know what I said, I'm genuinely curious as to what you perceived, because my reaction to what you state as its invalidation is bemusement.

I did acknowledge that Ireland was a state that devoured it's young in times of hardship - you're apparently disagreeing with me by noting that the young have always suffered from Ireland's recessions. At least I think you're disagreeing with me?

I'll note that during the Celtic Tiger there was a debate over if Ireland was closer to Boston or Berlin. Given the persistent expectation of emigration as a natural pattern, economic failure, corruption and awful public services, the truer comparison is if Ireland is closer to Haiti or Helsinki.

Other than that, I did notice Draghi seems more bothered by the unfair weighting of the adjustment than some commentators on this thread are.

Question: Mr Draghi, you mentioned in your statement youth unemployment. Given that inflation is now well below your target, is there perhaps more room within your price stability mandate to pay more attention to macroeconomic factors, like unemployment and growth, as some other major central banks are doing?

Draghi: On another occasion, I remarked on the very high level of youth unemployment that we are seeing today – and, by the way, unemployment is a tragedy and youth unemployment is an even bigger tragedy. We should ask ourselves why unemployment is so high, and why is it high mostly among young people, and not uniformly high, as it should be in a situation of such weak demand? And the answer has to do with labour legislations in these countries which have basically put all the weight of flexibility upon the young people. And there is very little the ECB can do about that.

I believe Draghi has also stated that fairness ( a term much abused by the public sector trade unions and politicians in this country) starts *within* countries. I very much doubt we will see a fair adjustment in Ireland if Draghi is correct.

Duggys Housemate

1) First of all your OP is a question about whether the recession is worse than the 80's, and in particular in its effect on young people.

2) since it's not the supposed "in-group" were once an out group.

3) comparisons between Ireland's public services and Haiti are absurd hyperbole. Ireland is on par with the UK and ahead of the US.

4) any economy can provide full employment if wages collapse. Only extreme right wingers would hope for that, and of course people in employment will try to hold onto their jobs. If Draighi wants more employment print more money. This will transfer money from net wealth to labour.

Sponge Bob

Duggys Housemate wrote: »

People in school in the 80's expected to emigrate. Most did. Some came back.

Correct, the recession started in the early 1980s and the current event by anlogy brings us to about 1986.

By then again _by analogy_ everyone was off or waiting to finish in college and leave. People can only put up with so many low grade belt tightening speeches before they realise that our political class is as resolutely clueless as they were in the 1980s.

StillWaters

Remember also that if one person in a household lost their job in the 80s, the family was totally dependent on Social Welfare. Mothers did not feature in the wirkforce at all really.

Im not sure of the figures, but I would imagine there are a lot more families in this recession with at least one income coming in.

Aidan1

This is something that appears to be embedded in the DNA of the state - the promissory note "deal" amounted to sticking our kids with the bill for our failure

This statement only makes sense if you believe that the State has the ability to 'create' enough jobs to employ everyone coming into the labour force, either exiting education or due to structural changes in the labour market. If you are positing a socialist utopia where the State 'makes' jobs, fair enough, otherwise I'm afraid it really makes no sense.

We're a small peripheral country with an economic history characterised for long periods by very low job creation. We had a major boom, driven on to the rocks by pro-cyclical spending (at least partly to drive employment in marginal areas), and then a major bust. And now we're feeding on our young because we can't get a couple of hundred thousand people back to work? Bit sensationalist, no?

We've had/are having a two tier recession though, and a two tier recovery as well. The recession was worst where the boom came latest - outside of the immediate peri-urban regions, the midlands, the Northwest, where there is huge a surplus of housing, and the very outer reaches of the commuter belt, where lower waged people settled as the boom got boomier. Both types of region suffered immensely in terms of unemployment in that both were characterised by low and relatively unskilled labour, the worst hit (and men the worst of all). On the other hand, those employed by multinationals and, to a degree, the public service, avoided the worst of the downturn (and were better off to begin with). The recovery has a similar character. Dublin, Cork and Galway are adding jobs in a net sense, initially through FDI and now through indigenous industry, and the housing market is responding in those areas too. For skilled workers and graduates, this will mean more opportunities from now. But for around 200,000 people who lost their jobs in the construction industry, many of whom live outside the urban centres, there is no easy answer.

It's not that Ireland is "feeding on its young". It's that the labour market is a social market to at least the same extent as it is an economic market. People who have been around the employment scene for years tend to be more experienced and more "in" than younger people.

All the same, there is no doubt that Ireland is having a two-tier (or maybe multi-tier) recession. In the boom, we fantasised that the likes of Longford, Leitrim and Roscommon could be effectively in the same economic position as more central urban areas. That wasn't clever and wasn't sustainable.

RATM

Voting turnout from the U-25's, about 20%
Voting turnout from the over 70's, about 70%

That explains a lot about why we have a two tier recession, young people don't vote so there is no votes in politicians passing pro-youth policies. Note how as soon as the recession hit one of the first things they cut was dole for the u-25's, they slashed it from €188 to (I think) €100. That is around a 40% cut in their income in one clean blow. Yet no one kicked up a fuss about it, it barely made a blip in the media. If the govt cut public pay by 40% in one blow there'd be riots in the streets. But they can get away with doing it on the U-25's because they know they don't vote.

We're always being told how Ireland has one of the youngest populations in Europe, I think the average age here in 32. When you think about it if everyone under the age of 40 voted for a single party they could get them an overall majority in the Dail and thus vastly shift the balance of power of Irish politics away from the older generations.

But that is never going to happen. Theoretically possible though given the numbers.

Electric Sheep

peter barrins wrote: »

This post has been deleted.

We did that in the 80s too - many of us left even though we had jobs. We just didn't want to live in Ireland. Not forced, a choice that we never regretted.

RATM

ardmacha wrote: »

The real "winners" at present are employable young people, who can now readily afford houses with their salaries.

You'd think that and so did I (as a potential first time buyer) for a while. But AIB are on record as saying interest rates are heading for 5% by year end. There is a good chance that they'll be at 7% by 2015 at this rate. As soon as Germany & France come out of recession properly and need to cool down their economies then the historically low ECB base rates will be a thing of the past and they will rise. That aside Irish banks need to plug the hole in their balance sheets and increasing interest rates is the primary mechanism to achieve that. And If 7% is the rate at which bonds are considered to be junk status then it also follow that a mortgage at 7% is a piece of junk for the person who has to service it.

I'm lucky in that when I invested my savings I didn't do so in property or bank shares. If I carry on another few years I'll (hopefully) be able to buy a house for cash and be mortgage free by the time I'm 42/43ish. But conversely I've mates who are struggling to save up a deposit to buy a house. By the time they do interest rates will be so high they won't be able to service the mortgage so it'll be pointless buying one. So even though houses are cheap right now the cost of credit isn't so its a real catch 22 for people in their 30's who have decent salaries but don't want to be a slave to the banks either. Their joint salaries aren't big enough to save up to purchase for cash and neither are they big enough to service 7% interest rates, especially when the banks are adding on 2% to stress test them, so by 2015/6 it'll be a notional interest rate of 9% that their mortgage application will be stress tested for, meaning a lot of couples will no longer qualify for a mortgage. And the media say property is recovering which is codswhallop when you consider what is coming down the line. We are only really at the end of the beginning of this property crash, there are several more Christmas turkeys left in this yet.

Electric Sheep

Duggys Housemate wrote: »

The OPs premise is invalid because the young have always suffered from Ireland's recessions - or slowly growth. People in school in the 80's expected to emigrate. Most did. Some came back.

Only the fools came back. Ask any of them if in retrospect they think coming back was a good idea - as they watch their kids go.