COVID-19 has exposed the crisis facing young people

As the UK slowly recovers from COVID-19, there is a risk that the struggles of “Generation Covid” will be blamed solely – and wrongly – on the pandemic. The Intergenerational Foundation’s 10-year anniversary report explains why the pandemic added to already existing intergenerational inequalities and calls for a number of important policy shifts in order to avoid a legacy of long-term economic scarring for many young people

While the intergenerational contract held up firmly from young to old during the pandemic, IF fears that the contract will not be reciprocated from old to young as the country recovers from the pandemic. This is because, as our 10-year anniversary report, Left Behind: A decade of intergenerational unfairness makes plain, the young have already suffered socio-economically disproportionately to other generations for the past decade and the government has already targeted the young with higher taxation.

The intergenerational contract

We need to thank the young for all they have sacrificed during COVID-19.  From the start of the pandemic, and throughout the last 18 months, younger generations have sacrificed their jobs, their incomes, their educations, their homes and even their mental health and personal liberties, in order to protect older people from a virus that affects their generation the least.

They have stocked the shelves, manned the tills, delivered our food, volunteered in hospitals, in the community, and stayed at home. But, instead of thanking young people, policy-makers already appear intent on asking the younger generation to disproportionately carry the £400 billion cost of pandemic spending through higher general taxation and higher student debt repayments – hardly a fair intergenerational contract?

COVID-19 and young people

And this is during a pandemic in which: three in every five job losses were from people under the age of 25; the highest number of Universal Credit claimants were among the 25–34s; and the latter group also comprised the highest numbers of people on furlough throughout the pandemic.

The 2020 Stamp Duty Holiday – which was intended to avoid a housing market recession and keep the building industry alive – merely overheated an already hot housing market and caused a huge surge in house prices, removing the dream of homeownership even further away from the young. Meanwhile, younger renters, who were furloughed or lost their jobs struggled to pay their rent. In the private sector, one in seven renters aged 18–24, and one in 10 aged 25–34, had gone into rent arrears by the end of 2020.

Unsurprisingly, the pandemic has also had an adverse impact on young people’s mental health, with adults aged 16–29 being the age group most likely to report higher levels of anxiety and feelings of loneliness, as well as lower levels of happiness and life satisfaction.

Add a decade of neglect

It is too simplistic to blame “Generation Covid” solely on the pandemic. The global financial crisis of 2008, followed by a decade of austerity, low interest rates, stagnating wages, low productivity and low GDP, have all conspired to reduce the prospects of younger generations at a time when our population is ageing rapidly and putting increasing pressure on the old-age dependency ratio. 

Our research has found that many government policy decisions over the past 10 years have directly contributed to these growing intergenerational inequalities. In recent years, government spending increased for older people in many policy areas, while stagnating or declining for younger adults and children.

Older generations also continue to benefit from many universal protections and concessions, while for younger adults, universal benefits which previously existed, such as child benefit or housing benefit, have either become means-tested, taxed, or are now simply not available.

So what should be done?

IF has long called for intergenerational impact assessments to be implemented on future policy. We therefore support, the “Wellbeing of Future Generations (2) Bill” and particularly the recommendation that future generations’ impact assessments should sit alongside already existing Equality Act assessments.

This would require all policies to be assessed for their impacts for at least 25 years into the future, in order to mitigate any potential adverse impacts that they could have on future generations. This would build on the Welsh Act, which has already led to successes for intergenerational fairness, such as rejecting the M4 relief road due to its negative environmental impact.

Intergenerationally fairer methods of taxation and public expenditure, which focus more on need, rather than age, and tax unearned wealth rather than incomes, are urgently required. Here are a few policy reforms that would help to reduce intergenerational unfairness:

COVID-19 recovery for younger people

Young people should be at the heart of the UK’s COVID-19 recovery. That means tackling youth unemployment, investing more in the prevention of mental ill health in children and young people, investing more in education, apprenticeships and training.  

The young are the future economic engines of the country, and their taxes will help to support us as we age. They should not be expected to carry the enormous debts accrued during the pandemic alone. Intergenerational solidarity needs to go down the generations as much as up the generations. It would be a grave intergenerational injustice for young people, who have sacrificed so much, to also have to shoulder the burden of repaying previous generations’ pension, government spending and now COVID-19 debts, throughout their working lives. 

COVID-19 has demonstrated that the government is capable of taking drastic policy actions in a time of crisis. It is now time to turn our attention to the crisis facing younger people and act to ensure that an entire generation’s prospects are not damaged irreversibly by COVID-19.

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Photo by Liz Emerson