It is often assumed that the millennial generation (broadly speaking those born in the 1980s and 1990s) spend all their money on holidays, avocado toast and iPhones, and are all cultivating "portfolio careers", disdainful of the notion of a job for life. Like most stereotypes there is perhaps some truth in this. People are travelling abroad more than they’ve ever done, many people are glued to their phones, and there has been a dramatic rise in self-employment since the financial crisis.
However, far from being footloose and fancy free, when it comes to work millennials are far less mobile than the previous generation. In fact young people – particularly young graduates – are moving jobs, and moving around the country, far less than they used to. Unlike any change in the sales of avocados, it’s vital that policy makers recognise this.
While the number of graduates has more than doubled since 2001, the share who move region and change jobs has fallen by 80 per cent. Although this may be partly driven by the welcome fact that there are more job opportunities across the country – reducing the need to head elsewhere in search of work – this decline has coincided with a large increase in the number of graduates in non-graduate jobs, implying a deterioration in the job-matching performance of the UK’s labour market.
Consider the North East. Roughly two-thirds of employed graduates in the area lived there before going to university and remained there after graduating. But two-in-five people with degrees in the region are in positions that they are overqualified for. Across the country as a whole, over a third of graduates are in non-graduate roles.
This matters for the efficiency and productivity of economy as a whole, but it matters in a much more visible way for the individual. By moving for work less frequently than in the past, today’s young graduates are missing out on significant pay rises. The typical annual pay rise for someone changing jobs but remaining in their existing region is over five times higher than that achieved by someone who remains with the same employer. Those who additionally move region receive even higher rewards.
So what can be done? Part of the solution is to remove any barriers that may prevent young people moving to where there are jobs that better suit their talents. A lack of quality affordable housing can stop people moving and makes it hard for firms to find the best staff. Similarly in many parts of the country poor infrastructure makes it incredibly difficult for people to commute long distances; investing in roads, railways and bus routes would help.
Of course, while boosting mobility is undoubtedly part of the solution it must be recognised that – even before the reductions of the last two decades – upping sticks for work was a minority pastime. Efforts to boost job-matching – and therefore productivity and pay – must also focus on increasing the numbers of well-paying and stimulating jobs that are available across the country.
Although differences in employment rates across the UK have fallen significantly since the mid-1990s, differences in productivity have increased. Successive governments have failed to craft an industrial strategy to tackle the economic divides that still define Britain.
Tackling the housing crisis, significantly boosting infrastructure spending and tackling regional inequalities will take time. The jettisoning of incorrect stereotypes can be done immediately. Policy makers need to recognise that today’s young people are - in many respects - similar to previous generations; they value job security and expect their earnings and living standards to improve as those of older cohorts have done. Where they are different is that, for many reasons, fewer are moving jobs, relocating and earning pay rises. It’s time that this was addressed.
Stephen Clarke, Research and Policy Analyst at the Resolution Foundation. You can read his full report here.
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