NICVA Jilted Generation presentation

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Presentation at NICVA's 'Creating the Good Economy' event on 31st January 2014 http://www.nicva.org/news/creating-good-economy-generation-y

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NICVA Jilted Generation presentation

  1. 1. 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
  2. 2. “Yeah, but, no but, yeah but…”
  3. 3. Don’t view past generations through rose tinted spectacles!
  4. 4. Jobs JILTED
  5. 5. The current state of the jobs market
  6. 6. 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%
  7. 7. 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-07 7,050 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-98 14,145
  8. 8. 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 07 23,500 Good Friday Agreement signed April 1998 57,900
  9. 9. There are now new ways to earn a living for Generation Y
  10. 10. Inward Investment Infrastructure Interest Rates Information Internet JILTED
  11. 11. Slide 11 Not all decades have been lost! Look at Laganside! Laganside 1994 Source: Invest NI
  12. 12. Source: Invest NI
  13. 13. Source: Invest NI
  14. 14. 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
  15. 15. 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
  16. 16. Living Conditions Life Expectancy Legislation Lifestyle Leisure JILTED
  17. 17. Previous generations experienced a totally different  Northern Ireland…..‘they never had it so bad!’
  18. 18. 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
  19. 19. 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 90 100 110 120 130 140 Nos (k) % Left Hand Scale Nos (k) Right Hand Scale Source: ONS
  20. 20. 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 Prices Quarterly 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
  21. 21. Slide 23 Could we have tolerated what previous generations did?
  22. 22. National Minimum Wage Fair Employment Legislation Automatic retirement for females after marriage  Smoking Bans Sexuality Legislation we may now take for granted
  23. 23. 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?
  24. 24. Technology Transport Tourism Time JILTED
  25. 25. Technology has moved on…..
  26. 26. From Hi‐fi to Wifi the world is a much smaller place..
  27. 27. …and more accessible than ever before
  28. 28. Slide 30 Recession, inflation & incomes squeeze is deterring  more of our young people from taking to the roads NI & GB Driving Tests Annual Rolling Total Index 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
  29. 29. Entertainment Emigration Education JILTED
  30. 30. 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
  31. 31. 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.a 1951-1961 - 9,223 p.a.
  32. 32. 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: HESA Tuition Fees
  33. 33. Debt Demographics Debate JILTED
  34. 34. 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!
  35. 35. 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 1.4 Debt (£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*
  36. 36. 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
  37. 37. 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
  38. 38. 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 building 7. Lobby BBC to have a weekly business / economics equivalent of ‘The View’ 8. Greater public sector pay flexibility to protect jobs 9. 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
  39. 39. In ‘Ferris Bueller’s Day Off’ Ferris discovered  you can’t wind back the clock!
  40. 40. 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!
  41. 41. Slide 43 Disclaimer This document is intended for clients of Ulster Bank Limited and Ulster Bank Ireland Limited (together and separately, "Ulster Bank") and is not intended for any other person. It does not constitute an offer or invitation to purchase or sell any instrument or to provide any service in any jurisdiction where the required authorisation is not held. Ulster Bank and/or its associates and/or its employees may have a position or engage in transactions in any of the instruments mentioned. The information including any opinions expressed and the pricing given, is indicative, and constitute our judgement at time of publication and are subject to change without notice. The information contained herein should not be construed as advice, and is not intended to be construed as such. This publication provides only a brief review of the complex issues discussed and recipients should not rely on information contained here without seeking specific advice on matters that concern them. Ulster Bank make no representations or warranties with respect to the information and disclaim all liability for use the recipient or their advisors make of the information. Over-the-counter (OTC) derivatives can involve a number of significant and complex risks which are dependent on the terms of the particular transaction and your circumstances. In the event the market has moved against the transaction you have undertaken, you may incur substantial costs if you wish to close out your position. All trade marks, images and photographs are the property of their respective owners Calls may be recorded.

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