NICVA  Centre for Economic Empowerment 

Economic Conference

Have our youth been jilted or do they just  need to be jolted?

31st

January 2014  

Richard Ramsey

Chief Economist Northern Ireland

richard.ramsey@ulsterbankcm.com

Twitter @UB_Economics

“Yeah, but, no but, yeah but…”

Don’t view past generations through rose tinted spectacles!

Jobs

JILTED

The current state of the jobs market

Slide 6

Northern Ireland’s youth unemployment problems are  small relative to elsewhere

57.7%

36.8%

24.8%59.2%

41.6%

20.1%

7.5%

22.5%

Slide 7

The number of under 25s claiming the dole has been higher

NI Youth Claimant Count Levels<25 years of age

Aug-96

Nov-077,050

14,782

0

5,000

10,000

15,000

20,000

25,000

30,000

Dec-95 Dec-97 Dec-99 Dec-01 Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Dec-13

Source: DFP

19,551 highest level since October 1996

GFA-9814,145

Slide 8

Youth unemployment in 1980s was probably even higher

NI Unemployment Claimant Count Levels

123,100

59,500

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Dec-71 Dec-77 Dec-83 Dec-89 Dec-95 Dec-01 Dec-07 Dec-13

Source: DFP

Jan 2013 64,900

Record Low Aug 0723,500

Good Friday Agreement signed

April 199857,900

There are now new ways to earn a living for Generation Y

Inward Investment Infrastructure Interest Rates Information

Internet

JILTED

Slide 11

Not all decades have been lost! Look at Laganside!

Laganside

1994

Source: Invest NI

Source: Invest NI

Source: Invest NI

Slide 14

3The Bank Rate 1700‐2013

The Bank of England will not keep its bank rate at a  record low forever…implications for young & old

Slide 15

Pensioners have been the Jilted Generation as far as  savings rates & pensions (annuity purchase) are concerned

Yield (Interest Rate) on UK 20-Year GILTs

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Jan-01 Mar-03 May-05 Jul-07 Sep-09 Nov-11 Jan-14

Yield %

Source: Bloomberg

Quantitative Easing (QE)

£375bn

Living Conditions Life Expectancy

Legislation Lifestyle Leisure

JILTED

Previous generations experienced a totally different  Northern Ireland…..‘they never had it so bad!’

Slide 18

And life expectancy is continuing to rise…

Northern Ireland Life Expectancy

78.3

82.4

65

70

75

80

85

90

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

Males Females

Source: ONS

Slide 21

% of young adults living with their parents now (36%)  is not markedly different to the late 1990s (33%)

NI adults aged 20-34 years living with parents

20

22

24

26

28

30

32

34

36

38

40

1996-1998 1999-2001 2002-2004 2005-2007 2008-2010 2011-2013

%

80

90

100

110

120

130

140Nos (k)

% Left Hand Scale Nos (k) Right Hand Scale

Source: ONS

Slide 22

First‐Time buyers  panicked to get on the property  ladder in 2006/07.  Those that didn’t were the lucky ones!

NI Residential Property PricesQuarterly

80% rise in 2 years

54% below peak

50

75

100

125

150

175

200

2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013 Q3

Index Q1 2005 = 100

Source: DFP Residential Property Price Index

Slide 23

Could we have tolerated what previous generations did?

National Minimum Wage

Fair Employment Legislation

Automatic retirement for females after marriage 

Smoking Bans

Sexuality

Legislation we may now take for granted

Section 75 & Schedule 9 to the Northern Ireland Act 1998 placed a statutory obligation on public authorities in carrying out their various functions relating to Northern Ireland, to have due regard to the need to promote equality of opportunity between –

• persons of different religious belief, political opinion, racial group, age, marital status or sexual orientation; • men and women generally; • persons with a disability and persons without; and • between persons with dependants and persons without

Slide 25

Are ‘Jilted Generation’ intergenerational concerns being adequately addressed under Section 75?

Technology Transport Tourism

Time

JILTED

Technology has moved on…..

From Hi‐fi to Wifi

the world is a much smaller place..

…and more accessible than ever before

Slide 30

Recession, inflation & incomes squeeze is deterring  more of our young people from taking to the roads

NI & GB Driving Tests Annual Rolling TotalIndex Q3 2008 = 100

-36%

-22%

50

60

70

80

90

100

110

2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3

Index

NI GB

Entertainment Emigration Education

JILTED

Slide 32

Emigration has picked up for the younger generation…

Northern Ireland Net Migration Flows for 18-34 Age-Group

-4,500

-3,000

-1,500

0

1,500

3,000

4,500

6,000

7,500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

International GB

Source: NISRA Increasing Net Outflows

Increasing Net Inflows

Slide 33

…but was much greater in earlier generations

Northern Ireland Migration Flows

-30,000

-25,000

-20,000

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

1966/67 1975/76 1984/85 1993/94 2002/03 2011/12

Source: NISRA

Increasing Outflows or Emigration

Increasing Inflows1871-1881 - 15,872 p.a.1911-1926 - 7,172 p.a1951-1961 - 9,223 p.a.

Slide 34

Education, Education, Education requires  more Money, Money, Money

Northern Ireland Domiciled Students Enrolled at UK Higher Education Institutions

20

30

40

50

60

70

1993/94 1996/97 1999/00 2002/03 2005/06 2008/09 2011/12

000s

Full-Time Part-Time

Source: HESATuition Fees

Debt Demographics

Debate

JILTED

Slide 36

UK Public Sector Net Debt

0

250

500

750

1000

1250

1500

1750

2000

2001-02 2003-04 2005-06 2007-08 2009-10 2011-12 2013-14 2015-16 2017-18

£Bn

Source: ONS, OBR March 2013

One Trillion Pounds of Debt

1.5 Trillion Pounds of Debt

But given where the public finances are heading  changing behaviours are unavoidable…

VOTE!

Student debt an issue for Generation Y.  Older generations  have debt issues too (e.g. endowment mortgage shortfalls)

Income Contingent Repayments for NI Domiciled Students Studying in Higher Education in UK & EU

0

20

40

60

80

100

120

1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12

Borrowers (000s)

0

0.2

0.4

0.6

0.8

1

1.2

1.4Debt (£bn)

No.of Borrowers with Outstanding Debt (000s) Amount of Outstanding Debt (£bn)

Source: The Student Loans Company 2013

Average debt for NI domiciled students leaving HE in 2012 was £15,690. *Not all of these students will remain in or return to Northern Ireland*

An ageing population has some advantages. The  Jilted Generation’s

revenge on downsizers!

Northern Ireland Population Projections

350

375

400

425

450

475

500

525

550

2012 2016 2020 2024 2028 2032 2036

000s

Population aged in their 30s & 40s Population aged in their 50s & 60s

Source: NISRA

Over 65 yrs to increase by 200k (+68%) over the next 24  years.  Business opportunities for the younger generations

Northern Ireland's Population & Projections

0

100

200

300

400

500

600

1971 1977 1983 1989 1995 2001 2007 2013 2019 2025 2031 2037

000s

Aged <16 years of age Aged 65+ years of age

Source: NISRA

1.

Commitment to sustainable public finance decisions (incl. pensions)2.

Transparency of costs & benefits of PE across intergenerational lines

3.

Introduce intergenerational impact into decision making & planning•

E.g. an equitable water charge that doesn’t defer costs to next generation

4.

Raise the free public transport for >60s to >65 years & add restrictions 5.

Promote career downsizing options in public sector for the benefit of youth

6.

Credible long‐term funding plans for capital investment & house building7.

Lobby BBC to have a weekly business / economics equivalent of ‘The View’

8.

Greater public sector pay flexibility to protect jobs9.

Target persistent public sector underperformance (employees)•

Blocks opportunities for the younger generation 

10.

Reduce incentives / vary taxes for BTL (Buy‐to‐Let)

& KTL (Keep‐to‐Let)

Club 18‐34 Jilted Generation Election Pledge Card    Things can only get better

In ‘Ferris Bueller’s

Day Off’

Ferris discovered  you can’t wind back the clock!

Remember don’t take life too seriously &  heed Ferris’s advice!

“Life moves pretty fast. If you don’t stop and look around every once in a while, you could miss it”.

DON’T YOU MISS IT!

Slide 43

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